Sidebottom: NAVs still trade outside normal discounts

Premier's Nigel Sidebottom believes investment company NAVs are still trading outside their normal discount range despite significant narrowing last year.

The £21m Enterprise fund manager says for the majority of the past 10 years, investment companies have traded at a discount of between 4% and 13%. However, the Lehman Brothers bankruptcy saw the average NAV discount spike at 24% before beginning to tighten. “Discounts went wide because of risk aversion. Although they have come in, they are still at the bottom end of their normal discount range,” he says. “Everybody is looking for alpha and investment trusts are an easy way to find that outperformance. “Investment trusts are a very imperfect market. They are less efficient than larg...