Allera expects to raise £250m for the portfolio with plans to have the trust trading on the stock exchange by April 2016.
It is understood that the trust will run for 4 years after which there will be a continuation vote and thereafter voting will be held every two years.
The newly formed trust will be a highly diverse, long term vehicle mainly invested in Chinese equities quoted on the two main exchanges in China the Shanghai and the Shenzhen and will ordinarily hold 25-35 stocks.
The aim of the trust will be to invest in Chinese companies that Allera’s analysts believe are undervalued they must have the following attributes: robust balance sheets, capable business franchises and agreeable attitudes to shareholder returns by being able to offer continuous and increasing dividends together with share buyback policies.
The trust’s initial objective will be to target a minimum dividend of 7 Cents per share at the end of its first financial year; this will be expected to rise in line with a defined set of targets over time. Allera’s trust managers will be looking to increase the yield farther with a gearing of 22% of the NAV.
Allera Looks past China's 'lifeless economy' headlines and sees profit
Allera believes the way the trust has been structured allows for its investors to be able to maximize their investment by the opportunities currently available in China. Allera’s senior analyst said “this trust is laid out to give our clients a unique investment opportunity that has been specifically structured to give investors looking for a solid dividend yield, together with the prospect of above average capital growth, through exposure to Chinese equities”.
He also said" We are looking to exploit the changes in attitude with regard to Chinese companies as they look towards offering their shareholders higher returns on their investments”.