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Williams' Diverse Income trust targets £50m to control premium

by Robert St George on Mar 31, 2014 at 14:35

Williams' Diverse Income trust targets £50m to control premium

The Diverse Income Trust managed by Gervais Williams hopes to raise another £50 million in order to cut its premium and costs.

Diverse Income currently trades on a premium of 5.2% compared with an average discount of 0.9% for its UK Equity Income peer group.

‘Taking into account the company’s performance since IPO, the current rating of its shares, and the manager’s outlook for potential investee companies and the company’s underlying portfolio, the board is considering increasing the company’s capital base through a pre-emptive offer of C shares to raise up to approximately £50 million of gross proceeds in June 2014,’ Diverse Income stated.

‘Any such fundraising would be expected to reduce the company’s ongoing cost ratio as well as broaden the company’s investor base to improve market liquidity for existing shareholders.’

Diverse Income’s present ongoing charge is 1.84%, according to the AIC, higher than the sector average of 1.18% including performance fees.

Over the past year Diverse Income has returned 36.1%, compared with an average of 15.8% for the sector and 8.9% from the FTSE All Share index.

Diverse Income added that it was now taking legal, tax and financial advice on the fundraising.

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