19 Apr 2010
Polar Capital Holdings has announced its intention to launch the Polar Capital Global Healthcare Growth and Income Trust plc. It is intended that PCGH will seek admission to trading of its ordinary shares on the London Stock Exchange plc with a premium listing. PCGH is looking to raise over £100 million through a proposed placing and offer for subscription.
Highlights
- Objective – to generate dividend income and capital growth by investing in a global portfolio of healthcare stocks. No more than 15%. of the initial portfolio will be invested in companies with a premium UK listing.
- Market opportunity – the healthcare sector is at a thirty year low in terms of relative valuations, driven partly by concerns over US reform. With many institutions under-weight in the sector, PCGH is an investment-led idea designed to profit from a re-rating of the healthcare sector.
- Sustainable and growing dividend target – many established companies in the healthcare sector are generating levels of cash flow which provide comfortable cover to their dividends. PCGH will target a sustainable and growing dividend, commencing with a target of 3p in respect of the first financial period to 30 September 2011. Dividends are expected to be paid quarterly.
- Growth – it is intended that the investment portfolio will include some exposure to the higher growth sectors of healthcare and to opportunities in emerging markets. The investment trust structure will enable the Manager to take a longer-term view and benefit from some investment in illiquid stocks.
- Highly experienced portfolio management team – The Manager will be Polar Capital LLP where the healthcare team has over 40 years’ combined investment and healthcare experience.
- Fixed life – PCGH will have a fixed life to January 2018. Only at the end of this period will the Manager’s performance fee, if any, be paid.
- Fee based on market capitalisation – The Manager’s annual fee of 0.85%. per annum will be based on the market capitalisation of PCGH so as to align the Manager’s and shareholders’ interests.
- Targeted proceeds – at £100 million.
- Issue price – 100p per share; Opening NAV 98p per share.
- Bonus subscription share issue – 1 for 5 bonus subscription share issue to all initial investors, exercisable in January 2014 at a price of 100 pence.
Highlights
- Objective – to generate dividend income and capital growth by investing in a global portfolio of healthcare stocks. No more than 15%. of the initial portfolio will be invested in companies with a premium UK listing.
- Market opportunity – the healthcare sector is at a thirty year low in terms of relative valuations, driven partly by concerns over US reform. With many institutions under-weight in the sector, PCGH is an investment-led idea designed to profit from a re-rating of the healthcare sector.
- Sustainable and growing dividend target – many established companies in the healthcare sector are generating levels of cash flow which provide comfortable cover to their dividends. PCGH will target a sustainable and growing dividend, commencing with a target of 3p in respect of the first financial period to 30 September 2011. Dividends are expected to be paid quarterly.
- Growth – it is intended that the investment portfolio will include some exposure to the higher growth sectors of healthcare and to opportunities in emerging markets. The investment trust structure will enable the Manager to take a longer-term view and benefit from some investment in illiquid stocks.
- Highly experienced portfolio management team – The Manager will be Polar Capital LLP where the healthcare team has over 40 years’ combined investment and healthcare experience.
- Fixed life – PCGH will have a fixed life to January 2018. Only at the end of this period will the Manager’s performance fee, if any, be paid.
- Fee based on market capitalisation – The Manager’s annual fee of 0.85%. per annum will be based on the market capitalisation of PCGH so as to align the Manager’s and shareholders’ interests.
- Targeted proceeds – at £100 million.
- Issue price – 100p per share; Opening NAV 98p per share.
- Bonus subscription share issue – 1 for 5 bonus subscription share issue to all initial investors, exercisable in January 2014 at a price of 100 pence.
Daniel Mahony and Gareth Powell, Fund Managers of PCGH, said: “We believe that the healthcare sector now offers an excellent opportunity for investors. It is now significantly undervalued and under-owned by most generalist investors, with a shadow cast over the sector from the US healthcare reform debate. The Pharmaceutical sector has suffered a decade long P/E decline which we see reaching an inflection point in the next five years. Consequently, we intend to establish PCGH to take advantage of these opportunities now and to aim to provide a sustainable and growing dividend with exposure to the higher growth sectors of healthcare.”
John Regnier-Wilson, Head of Sales of Closed Ended Funds, Polar Capital, added: “This investment trust takes into account the needs of investors. There is no performance fee until the end of the fixed life to January 2018 and the Manager’s annual fee is based on market capitalisation, ensuring we align the interests of the Manager with our investors. We believe that this structure, combined with the sector opportunity will create a compelling investment proposition for investors.”
