A European privatization investment trust managed by Kleinwort Benson Investment Management Ltd., London, has pulled in 320 million ($480 million) in the pre-placement period, well above expectations.
The Kleinwort European Privatisation Investment Trust initially was expected to raise between 40 million and 100 million.
"The pre-placement and the level of interest shown by the general public in the new trust demonstrates a real appetite for privatizations and has, frankly, taken us by surprise," said Charles Cavanagh, head of U.K. institutional investment at Kleinwort Benson.
The closed-end fund, which remains open to investment until Feb. 2, achieved a high level of participation from institutional investors, but a breakdown was not available, Mr. Cavanagh said.
The fund will invest up to 20% of its assets in U.K. privatized companies, and no more than 20% in former Soviet bloc country stocks. The remainder will be invested in Continental European stocks.
Mr. Cavanagh said returns are expected to exceed those on European markets in general, but investments would not be risky. Privatized companies will tend to perform well in the medium and long term as their cultures change, becoming more shareholder-oriented and shedding their civil-service mentalities, he explained.
European privatizations are expected to add about $150 billion to European stock markets in the next five years.