Ecofin Water and Power Opportunities, the specialist investment trust, yesterday proposed raising capital to take advantage of the “attractive investment opportunities” in the utilities sector.

The £250m investment company, which invests in global utilities, announced the proposals as part of its capital restructuring process as it came to the end of its original term on March 31.

EW&PO, which is managed by Ecofin, offered three classes of shares to investors when it launched in 2002 but is this month rolling these into one class of ordinary shares.

Capital and income shareholders can convert to ordinary shares or take a cash tender offer.

In a new move, the company said that ordinary shareholders could participate in a bonus issue of subscription shares to allow them to benefit from gearing.

EW&PO is considering raising the capital via an emotionally-charged route for investment companies: through zero dividend preference shares.

Zeros were at the heart of the split cap scandal that hit the investment trust industry after the last market crash of 2001 and led to over 25,000 investors receiving compensation. These investments do not pay income and instead pay, in theory, a fixed amount when the trust winds up.

But analysts are increasingly of the view that zeros could make a comeback, particularly as income tax is now often more punitive than tax on capital gains.

“The market for zeros is relatively small these days and it will be interesting to see what kind of appetite there will be for issuance by an existing company with an established track record,” said Simon Elliott at Wins Investment Trusts.

But it is by no means certain EW&PO will be able to raise capital. Investment companies are finding it very difficult to raise money in the current environment. Jupiter Asset Management was forced in March to withdraw the launch of a specialist investment company as it could not raise the £50m it needed.