View the article online at http://citywire.co.uk/money/article/a877241
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.
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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In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the investment trusts
- Henderson Global Trust (Ordinary Share)
- Henderson International Income (Ordinary Share)
- Bankers (Ordinary Share)
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