Investment Trusts  

M&G to wind up £1.2bn trust

M&G to wind up £1.2bn trust

Asset manager M&G is set to reconstruct its £1.2bn high income investment company when it winds up the trust next year.

The High Income Investment Trust has put forward proposals for a reconstruction of the company to coincide with the 17 March liquidation date.

The board is offering shareholders a number of choices to give investors a tax-efficient rollover into new shares if they want to continue with their investment.

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According to an update published today (10 November), the trust took advice from its financial adviser, Winterflood Securities, to offer both open-ended and closed-ended investment vehicles as rollover options.

The default option will be the M&G Extra Income fund, which is said to have a high degree of overlap between the investment objectives, the underlying holdings, and is managed by the same portfolio manager, Richard Hughes.

Alternative open-ended options include the M&G Strategic Corporate Bond fund and the M&G Dividend fund.

In a statement, the Board said it was “conscious” that some shareholders might want to keep their investment in a closed-ended structure.

It has therefore set up an arrangement with JP Morgan to have the Elect trust as a closed-ended rollover option.

The trust expects to incur costs amounting to £350,000 by being placed into liquidation.  

It has been agreed that M&G and JP Morgan funds will meet the substantial additional costs to be incurred by the trust, above those of a simple liquidation, as a result of including the tax efficient rollover options. 

M&G is set to release specific details of the proposals early next year.

According to FE, the trust had assets amounting to nearly £1.2bn on the 9 November.