Investment Trusts  

Odyssean trust proposes merger with Strategic Equity Capital

Odyssean trust proposes merger with Strategic Equity Capital

Odyssean Investment Trust has proposed a merger with Strategic Equity Capital, after receiving shareholder backing.

In a statement to the stock exchange this morning (December 23), the board of the trust said it had proposed a combination of the two funds to be managed by Odyssean Capital under the OIT’s investment strategy.

OIT’s board said the trust had received letters of intent supporting the transaction from shareholders representing 32.9 per cent of the issued share capital of SEC.

In the statement, the board of OIT said it believes the combination of the two trusts represents a “unique opportunity” to create an investment trust differentiated from the wider UK small cap sector. 

It said: “The combined entity would have a long-term supportive shareholder base, strong shareholder liquidity and discount control mechanisms, a premium rating and greater scale, and this would be of long-term benefit for both sets of shareholders.”

The transactions are at an early stage and there is no certainty that the terms of the deal can be agreed.

In March, shareholders in the Strategic Equity Capital trust voted to keep the trust going, despite calls for it to be shut down over its long-term track record and large discount.

The trust traded at a discount of 15 per cent at the time. It had returned 33.6 per cent over the past five years while its sector, the AIC UK Smaller Companies, returned 75 per cent.

As of December 23, the trust is still trading at a 15 per cent discount.

sally.hickey@ft.com