Resource Trust seeks £70m

10/03/2010 Robert Tyerman

Specialist resources investor Baker Steel Capital Managers plans to float a trust to make pre-flotation investments in the sector.

London-based Baker Steel, where ex-Merrill Lynch luminary Trevor Steel (right) is chief investment officer, says its new Baker Steel Resources Trust is targeting £100 million of assets and annual returns of 25 to 30 per cent following its planned £70 million placing on the London Stock Exchange at a price yet to be decided. Baker Steel Resources Trust will start with more than a third of its assets in Ferrous Resources, a Brazilian iron ore producer planning a £2.5 billion London float and, claims Trevor Steel, 'offers a great opportunity for investors who want to access quality resources companies at an early stage’.

The new launch follows a restructuring of Baker Steel’s £40 million Cayman Islands-based Genus Capital Fund, which the company launched in 2008 with partners AWR Lloyd, an Asia-based investment group, and Red Rock Capital Partners. Baker Steel says the Genus Dynamic Gold Fund has achieved a compound annual return of 26 per cent since its launch in 2003, against 14 per cent shown by the FTSE Gold Index.

RIT Capital Partners in the J.Rothschild investment stable, Canada’s RBC Capital Markets and Baker Steel management partners together currently hold more than 60 per cent of the shares. If you agree with today’s improved sector sentiment, particularly over iron ore, Baker Steel could be a worthwhile route to take.