Mark Thomas explains why he welcomes AIC’s investment company sector overhaul

09 May 2019 / In the media News Download the report

The Association of Investment Companies' (AIC) has decided to introduce 13 new sectors and rename 15 others, with the expectation that this will enable investors to make more informed decision. Mark Thomas's recent article on debt investment companies, "Diving deep finds you the treasure" has been widely covered by the media as part of this revamp. The changes come into effect on 28th May following extensive consultation in the industry.

Mark asserts in the Citywire article “AIC revamps sectors to navigate investors through debt and property trusts”  that:

“…closed-end debt funds needed to be considered as lenders first and investment companies second to account for the varying economic risks they faced.

‘So in the case of loans, for a specialist lender in a niche, like BioPharma Credit (BPCR) which lends companies in biosciences, probably very little would happen to it in a recession,’ he explained. ‘So it has pretty much no sensitivity to the economic cycle.’

‘On other hand you have peer-to-peer trusts – if the economy worsened, credit losses would rise dramatically. And somewhere in the middle you have property lenders which also have some security.’

In the Investment Week article “AIC sector revamp welcomed as alternative flows double”, Thomas explains that he expects “this large and diverse sector to benefit from being split into more focused constituents”.