Analysts suggest BH Global to mimic Macro buyback

Analysts suggest BH Global to mimic Macro buyback

A tender offer announced by the £866m BH Macro investment trust could lead to its sister portfolio implementing a similar strategy, according to analysts.

The board of BH Macro, a fund of hedge funds run by Brevan Howard, has proposed to buy back up to a quarter of its share capital in light of the trust trading on a discount to net asset value (NAV) of 5 per cent.

If successful, the tender may put pressure on BH Global to offer investors a similar opportunity to exit, according to Numis Securities.

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BH Global, currently trading at a 7.8 per cent discount, has already pursued a share buyback policy in an attempt to control the discount.

Ewan Lovett-Turner, director of investment company research at Numis, said: “BH Global is facing most of the similar issues as BH Macro, namely dull performance and a persistent discount, despite significant buybacks.

Mr Lovett-Turner noted that the £336m BH Global vehicle was more constrained by size than BH Macro. Although its sterling class is a reasonable £298m, he suggested the board might be wary of shrinking the trust to a sub-scale level.

The board has already bought back £113m of BH Macro’s sterling share class over the past year, amounting to 24 per cent of the fund’s share capital.

In addition, £5.6m of the US dollar share class and £15.2m of the euro share class have also been repurchased.

If the offer is fully subscribed, it will reduce the trust to a market cap of around £660m. The sterling share class currently accounts for £623m of assets.


Marvin Evans, principal at Old Bank Wealth Management, said: “The knowledge that a trust board is willing to buy back the shares if the discount widens helps instill confidence among investors, who may be less happy to buy shares that may see a significant future widening in their discount.

“This action helps disaffected shareholders exit, while remaining investors will benefit from an uplift to NAV from the shares tendered at a discount.

“The board also has to bear in mind buybacks have to be funded somehow, and if there is insufficient spare cash this may mean selling portfolio investments, often at inopportune times.”