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Baker Steel Capital plans £70m IPO for new investment company Baker Steel Resources Trust

10th Mar 2010, 4:22 pm Baker Steel Capital plans £70m IPO for new investment company Baker Steel Resources Trust

Baker Steel Capital Managers announced its intention to float a new investment company, the Baker Steel Resources Trust (BSRT), focused on pre-IPO and specialist listed resource companies. The new group is targeting approximately £100 million in assets, following a £70m placing of new shares and a restructuring of Baker Steel's Genus Capital Fund (GCF).

"This trust is the first of its kind in the UK market, offering investors exposure to pre-IPO mining stocks and specialist listed resources opportunities”, BSRT lead manager Trevor Steel commented. “It is a stock-specific, bottom-up fund that provides a great opportunity for investors who want to access quality resources companies at an early stage”.

Baker Steel and its partners AWR Lloyd and Rock Capital Partners launched the GCF in July 2008. The fund is fully invested with US$61 million of assets.

The partner’s strategy is to leverage their respective expertise and global networks to identify, invest and manage highly prospective, attractively valued early stage mining companies and specialist listed opportunities. The fund aims to create value through investment in quality resources projects, which have a high likelihood of progressing to production. Baker Steel said it intends to exploit the value gap between pre-IPO and public equity valuations, and that it will invest in companies during the pre-IPO phase from the initial round to late-stage financing.

According to Baker Steel, the BRST is targeting returns between 25% and 35% per annum in the long term, with a target realisation range for the initial portfolio between US$116m and US$225m.

The principals of Baker Steel, the FSA-regulated asset management specialists, were the founding members of BlackRock mining team in 1992. Baker Steel has assets under management of around US$850m and it said it takes a fundamental value-oriented investment approach. The company will act as fund manager for BSRT, with additional expertise and regional coverage from its partners AWR Lloyd in Asia and Rock Capital in South America and Africa.

BSRT will apply for its shares to be admitted to trading on the London Stock Exchange's main market for listed securities in mid April 2010.

BSRT’s initial portfolio includes two coal companies with a 5.3% stake in Mongolia based Gobi Coal and a 4.2% stake in Canadian coal company First Coal, two Brazilian operating Iron Ore companies with a 7.3% stake in SAFM and a 0.8% holding in Ferrous Resources. In Africa the fund has a 2.8% shareholding in DRC operating copper-cobalt focused Copperbelt Minerals, and a 2.1% stake in IvanPlats, who also owns a copper projects in the DRC, as well as a PGM-Nickel project in South Africa.

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