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Henderson Global takes the HINT and gives up

Henderson Global Trust, a small, poorly performing fund, bows to pressure and agrees to merge with Henderson International Income Trust. 

Henderson Global takes the HINT and gives up

Shareholder pressure for rationalisation in the investment trust sector has forced Henderson Global Trust (HGL ) to seek a merger with stable mate Henderson International Income Trust (HINT ).

Shares in HGL jumped nearly 5% after its board said the £128 million global fund’s position was not sustainable and that investors would be better served winding up the trust and merging with HINT to create a bigger and more viable fund.

Although HGL enjoyed a hey-day in its previous guise as Gartmore Global, in recent years performance had been dull under its former long-standing manager Brian O’Neill. His successor, Wouter Volckaert, failed to revive its fortunes in the past two years with the share price trading at an average of 10.7% below net asset value.

A share buy-back programme had also proved insufficient to reduce the discount and risked making the fund too small for wealth managers and institutional investors to consider, said chairman Richard Hills.

The trust’s largest shareholders are wealth managers Brewin Dolphin and Speirs & Jeffrey with respective stakes of 14% and 13%.

‘The board is aware that there are significant challenges for a company that does not have sufficient scale to remain relevant to investors in the global sector and that opportunities to grow are currently limited,’ said Hills in the statement. 

Henderson International Income had been chosen because its performance under manager Ben Lofthouse was better and its shares had traded at a premium above NAV in the past year.

The outline of a merger has been agreed with Henderson International Income, which is chaired by Christopher Jonas, but will require shareholder approval.

Under the transaction, Henderson Global would go into voluntary liquidation and its shares would be rolled over into Henderson International Income. This will more than double the size of the global equity income fund, which launched nearly five years ago, and put it on the buy lists of more investors.

Henderson Global shareholders who want to retain a growth investment style will also be offered the option of rolling into Bankers (BNKR ), a larger, better performing global trust also managed by Henderson.

Over the past three years Henderson Global delivered a total return to shareholders of just 2.4% well below the FTSE All Share return of 11.4%, according to data from Numis Securities. By contrast Bankers, managed by Alex Crooke, delivered 24% and Henderson International Income 16%.

Henderson Global shares jumped 17p or 5% to 363p. Henderson International Income and Bankers traded virtually unchanged at 116p and 578.5p respectively.

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5 comments so far. Why not have your say?

Keith Cobby

Feb 01, 2016 at 11:37

Sensible move by HGL. I also would like to see more consolidation in the sector.

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Keith Cobby

Feb 01, 2016 at 11:39

Sensible move by HGL. I also would like to see more consolidation in the sector.

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Keith Cobby

Feb 01, 2016 at 11:41

Other mergers should be between Perpetual Income/Edinburgh/Invesco income trusts. Also Aberdeen should look at merging their poorly performing asian trusts.

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Feb 01, 2016 at 18:32

Also Henderson Alternataive Strategies Trust (22% discount and a dire performer long and short term) might consider rolling over into Bankers?

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mark sp

Feb 07, 2016 at 08:59

There is a difference between merging trusts in a sector where one or more is poorly performing against similar trusts and, merging trusts where the sector performance has been pants.

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