Trust news: trust to become ETF, Assura counter-bid, fee cuts

Important information -  the value of investments and the income from them can go down as well as up, so you may get back less than you invest. 

This latest investment trust roundup covers Saba’s most recent target, bids in the news, fee cuts, management changes and more.

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Saba targets

Middlefield Canadian Income, which was the subject of an attempt by Saba, the American activist investor, to turn itself into an ‘open-ended’ fund, is to do just that, admittedly by becoming an exchange-traded fund or ETF rather than a conventional ‘Oeic’ or open-ended investment company. ETFs are open-ended because shares can be created or cancelled in response to supply and demand, but they differ from Oeics because they are quoted on the stock market. The ETF would, like the trust, be actively managed and the same manager would remain. Investors who did not want to have their holdings switched to the ETF would be able to participate in an uncapped cash exit at close to the trust’s net asset value (NAV).

Saba has exited its holding in European Smaller Companies via a ‘tender offer’ from the trust. While Saba had not confirmed its exit via a stock exchange announcement at the time of writing, the number of shares tendered via the ‘in specie’ option (by which the shareholder in the trust receives shares in its holdings rather than cash, a method that is thought to suit an investor in Saba’s position) closely matched its declared holding in the trust.

Bids

The fight to take over Assura, which owns healthcare-related properties such as GPs’ surgeries, has come back to life after a new bid from Primary Health Properties, a similar fund. Previously Assura’s board had recommended acceptance of an offer from a group of American investors.

The takeover battle for the Harmony Energy Income Trust between Drax and Foresight Group is over after Drax dropped out and Harmony’s board recommended Foresight’s 92.4p-a-share offer.)

Fee cuts

The annual fee paid by the Schroder Income Growth Fund to its management group, Schroders, is to fall from 0.45% of NAV to 0.4% of market value. Matt Bennison has been promoted to co-manager alongside Sue Noffke and the trust will aim to maintain its discount in single digits through share buybacks.

JPMorgan Indian Investment Trust will also pay less to its manager, JPMorgan. With effect from 1 October the annual fee will be 0.65% on the first £300m of the lower of market value or net assets and 0.55% thereafter, instead of 0.75% on the first £300m and 0.6% thereafter. After a strategic review the fund will stick with its existing manager and strategy, target a single-digit discount through buybacks and pay a dividend of 4% of NAV, supported by distributions of capital if necessary.

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Another trust to disappear

Riverstone Energy has proposed a managed wind-down and a return of cash to shareholders. The annual management fee will fall from 1.5% to 1% of NAV.

Management changes

Ecofin US Renewables Infrastructure, which is being wound up, is to become self-managed.

Management of India Capital Growth is to move from Ocean Dial Asset Management to SVM Asset Management. Both are part of a bigger group, River Global.

Amati AIM VCT has switched management company from Amati Global Investors to Maven Capital Partners and been renamed Maven Renovar VCT.

Other news

European Opportunities Trust, managed by the veteran investor Alexander Darwall, is to launch a tender offer in June for 25% of its shares at a 2% discount to NAV. The current discount is 7.3%.

Gabelli Merger Plus has changed its name to Gabelli Merchant Partners.

The board and managers of HydrogenOne Capital Growth are ‘considering a wide range of options to deliver shareholder value, with confidential discussions underway with third parties’.

Social Housing REIT has announced a 3% increase in its dividend target for the current financial year to 5.622p a share, the first increase since 2022.

Caledonia Investments has proposed a 10-for-1 share split to make its shares more affordable. It has also increased its dividend for the 58th year.