Join our community of smart investors

Can private investors (or Bill Gates) save investment trusts?

Private investors call the shots among some shareholder bases
Can private investors (or Bill Gates) save investment trusts?Published on November 1, 2024

Times are still tough for many investment trusts. Although performance is improving, interest rates are on the way down, and cost disclosure rules are being reformed to their benefit, many structural challenges remain. Shares' persistent discounts to net asset value are in part explained by a lack of liquidity, which has contributed to an increase in consolidation.

We’ve previously highlighted some of the trusts that could fall by the wayside. It’s worth considering that private investors have a role to play here, too. Their increased presence on shareholder registers over recent years means that, in some cases, they could be the deciding factor in whether a trust survives or seeks a wind-down or merger.

Size isn’t the only reason why trusts are merging (see this week's news that the £600mn Asia Dragon (DGN) is to combine with Invesco Asia (IAT)). But reaching a viable scale is seen as increasingly important given big professional buyers don’t tend to look at portfolios under the £250mn mark.

This is subscriber only content
Start your trial to keep reading
PRINT AND DIGITAL trial

Get 12 weeks for £12
  • Essential access to the website and app
  • Magazine delivered every week
  • Investment ideas, tools and analysis
Already a subscriber? Sign in