The £149m Henderson’s Global Investment Trust (HGL) is to wind up after a board review found it no longer has “sufficient scale” to remain relevant to investors.
In a statement to investors and after discussions with its largest shareholder, the board said it had agreed for the £96m Henderson International Income Trust to be the roll over vehicle.
It had also arranged for the £686m Bankers Trust to be an alternative roll over option for investors wishing to retain a global growth focus.
There will be no cash exit option.
The HGL board said the combination of the HGL and Henderson International Income Trust would provide shareholders with an investment “in a trust with a stronger rating and would create an enlarged entity with sufficient scale to be attractive to a wider pool of investors”.
HGL has been trading at a discount of 10.7 per cent in the last year, even though the board used 4.2 per cent of share capital for buybacks to mitigate the discount.
However, this severely reduced available investment capital.
The HGL board said: “The company’s current approach is not sustainable over the longer term.
“The board concluded certain shareholders would prefer access to a global income strategy in the current market environment while others may wish to retain exposure to a global growth strategy.
“In the light of that, it has examined a number of options which can secure this objective.”
The roll over could more than double the net assets of Henderson International Income Trust.
Chairman of the trust Christopher Jonas said the board welcomed the opportunity to “take the company to the next level” via the roll over agreement.
Charles Cade, head of investment company research at Numis, said that the move is a positive one for shareholders, calling the Global trust a “sub-scale vehicle” following its difficulty in attracting new shareholders in recent years and its persistent discount trading.
However, he criticised the lack of cash exit option.
He said: “It is encouraging to see that the board and Henderson have taken proactive steps to find a more attractive option for shareholders.
“One potential criticism is that there appears to be no cash exit as part of the scheme.”
