Timeline set for liquidation of ex-Barnett trust

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Timeline set for liquidation of ex-Barnett trust

The Perpetual Income and Growth investment trust, previously run by Mark Barnett, will be liquidated by mid-November as its merger with the Murray Income Trust completes.

A stock exchange update, published today (October 30), said the assets in the portfolios had been “aligned” and that the merger, and subsequent liquidation of the Perpetual Income and Growth, would complete on November 17.

The board of the Perpetual Income and Growth trust announced in July that it had decided it was in the best interest of its shareholders to combine the assets of the company and merge with the Murray trust, managed by Aberdeen Standard Investments.

It had been on the hunt for a new manager since it sacked Mr Barnett, formerly Invesco’s embattled head of equities, in April after a prolonged period of poor performance.

At the time, the board said it would pay a pre-liquidation dividend to shareholders — to represent the fact investors would see a reduction in their overall share price yield post-merger — and offered a “cash option” to remove their assets from the trust if they wish to do so.

Today’s announcement showed some 26 per cent of the trust’s assets now consisted of cash or cash equivalents in order to fund the dividend, cash payments to shareholders exiting the trust and the company’s transaction costs.

The new entity will charge fees of 0.5 per cent per year, compared with Perpetual's previous 0.73 per cent.

Mergers and acquisitions in the investment trust space are rare, with only a handful to occur in the past decade.

The Murray Income Trust has a similar investment objective to Perpetual Income and Growth — aiming to provide a high and growing income combined with capital growth through investing primarily in UK equities.

Managed by Charles Luke, the £550m Murray trust has outperformed its peers in the AIC UK Equity Income sector over a one year-, three year-, five year- and 10 year-period, returning 31 per cent over the past five years compared with the average 1.5 per cent loss from its peers.

By comparison, the similar sized Perpetual Income and Growth mandate has underperformed the sector across all time periods, losing 34 per cent over the past five years.


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