A NEW #50m investment trust, which will be managed from offices in St

Vincent Street, Glasgow, by two breakaway Scottish Amicable fund

managers, will specialise in the UK smaller companies sector and is

primarly directed at financial institutions.

Saracen Value Trust, whose pathfinder prospectus was published

yesterday, is to come to the stock market through a placing and offer

for subscription of 50 million Ordinary shares at 100p with attaching

warrants in the proportion of one to five.

The issue, which has been underwritten by Charterhouse Tilney, is

expected to be placed by the end of this month. Subsequently private

investors will have two weeks to apply for the shares, which will be

fully PEPable, and first dealings should take place before the end of

February.

The funds raised will be invested in smaller companies selected from

the constituents of the FTSE SmallCap Index. The initial yield is

expected to be in line with the average for smaller companies, currently

around 3%. But the trust's directors expect dividends to increase more

rapidly than the market average as smaller companies benefit from the

recovery of the UK economy.

The investment company, Saracen Fund Managers, is jointly owned by its

managing director, Jim Fisher, and IAF Group. Mr Fisher has 17 years'

experience in fund management, the last seven of which were with

Scottish Amicable until he left last September to set up Saracen. He has

been joined in the new venture by his colleague David Campbell.

Mr Fisher had responsibility at Scottish Amicable for more than #1000m

of funds, mainly invested in UK quoted smaller companies.

Mr Anthony Dick, the former GT man, who is non-executive chairman of

the new trust, said: ''The directors believe that economic indicators

and market confidence show that the time is right to launch an

investment trust specialising in UK smaller companies. The team at

Saracen Fund Managers has a wealth of experiencxe in this sector.''

The Saracen board believes that smaller companies tend to outperform

their larger brethern when the domestic economy is moving out of

recession and that low and relatively stable UK interest rates and

inflation should help to facilitate growth in smaller companies.