Henderson trust justifies wind-up decision

Speaking to FTAdviser during a roundtable event, Alex Crooke said the investment house is currently “working away behind the scenes” to deliver three prospectuses next month.

On Monday, news emerged that the HGL fund would be wound up after a board review indicated it no longer had “sufficient scale” to be relevant to investors.

Shareholders of the £149m HGL fund will have the choice to either move to the Henderson International Income trust (HINT) or the Bankers trust.

Mr Crooke said: “I mean obviously Henderson Global Investment trust’s discount narrowed quite seriously, as it should do.

“Much will depend on what the discounts and premiums are for both HINT and Bankers nearer the time, because that will define whether money will go one way of the other.

“But we are keen to be involved because Bankers is issued at a premium, and so this we will be beneficial for existing Banker shareholders, and so we are not going to disadvantage our current investors.

“Hopefully an element of Global will come to us and join investment with Bankers going forward.”

He said he expects the core investors of the HGL fund to be in favour of global growth.

Mr Crooke said: “Hopefully, for shareholders of Global it is a good move, with the opportunity to switch to two attractive trusts which are both international, one with a bit more income bias.

“With the balance between income and growth you would hope it would close that discount and produce some value for those investors so they will stick with us.”

With the balance between income and growth you would hope it would close that discount and produce some value for those investors so they will stick with us. Alex Crooke

Mr Crooke said offering HINT and Bankers to the HGL investors was an “obvious choice” because they are the two global trusts Henderson has on offer.

“I’m not sure you’d want to offer three or four trusts because you’ve got to be careful not to disadvantage the existing clients,” he added.

Patrick Connolly, financial planner at Chase de Vere, said the change makes “absolute sense” for Henderson and for investors in the Global Investment Trust, while not being detrimental to those invested in International Income or Bankers

He said: “The Global Trust has been treading water for a bit and this move will allow investors to move to a more viable trust with better prospects.”

He said it is understandable Henderson would want investors to move into HINT in order to increase its size, adding however that there will be “a strong argument” for some investors to select the Bankers Trust instead.

“Any decision should be made on the basis of the best investment fit, and not because of short-term predictions about what might happen to discounts and premiums.”

Darius McDermott, managing director of Chelsea Financial Services, said the closing down of a sub-scale investment trust is to be applauded, adding it was “the right thing to do”.

He said: “Henderson has given investors two strong roll-over options, which both have long-term track records and have good discount premium history.”

katherine.denham@ft.com