Aircraft leases, student property, and medical centers are some of the assets of choice

Investment trusts have become the preferred vehicles in the UK for acquiring alternative assets that were once the preserve of bank funding. These alternative assets have also been dubbed as ‘bond proxies,’ as investors seek to replace fast-fading bond yields with substitutes.

Assets at listed investment trusts at a record high

Data out August 12 from the Association of Investment Companies (AIC) showed UK listed investment trusts now have assets of £209 billion.

This value has climbed two-fold in the six years since 2013.

Assets in sectors such as student property, medical centers, and aircraft leasing have more than doubled from £34.7bn to £80.3bn in the same period.

Alternative assets are seen as illiquid

According to Ian Sayers, chief executive of the AIC, investment trusts are the “natural home” of alternative assets, given that they are often somewhat illiquid and harder to sell, such as property and infrastructure.