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Outlook bleak for Lloyd's trust

Helen Kay
Monday 01 November 1993 00:02 GMT
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JOHNSON FRY is steeling itself for the collapse of plans to launch an investment trust offering investors an indirect participation in the Lloyd's of London market.

Only two weeks ago the company released an offer for subscription in an investment trust that would, in turn, invest in the investment trusts being created by other sponsors. However, last weekend Charles Fry confirmed that the company had experienced difficulty in raising the pounds 50m it aimed to secure from personal clients and small companies.

The trust is believed to have brought in less than 10 per cent of its target. 'We are not very close to reaching that figure,' Mr Fry said, 'although I don't know what will happen on Monday. We have had expressions of interest from a number of corporate clients, but we have not yet received their cheques.' It must raise the money by Tuesday morning or abandon its plans.

Kleinwort Benson and Sturge Underwriting have already cancelled plans for a jointly-backed corporate fund investing in Lloyd's. Others are expected to fall by the wayside as the battle for capacity heats up. With pounds 1.5bn or more of corporate capital chasing quality capacity, and a resurgence of interest on the part of 'names' eager to recoup some of their losses, it is improbable that corporate demand will be met in full.

Elsewhere, HCG Lloyd's Investment Trust, which is sponsored by JO Hambro, the US-based Conning & Co and Grimston Investments, has raised pounds 65m from investors. Dealings in the trust, which has now reserved pounds 125m of underwriting capacity, begin on 8 November.

The competition is likely to be intensified by the plans of several managing agents to launch their own limited liability companies.

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