JPMorgan Income and Capital finds a MATE – On 17 October 2017, JPMorgan Income & Capital Trust announced, in its interim results, that it was considering offering shareholders a rollover option into a new multi-asset investment trust as an alternative to liquidating their shares for cash to coincide with the end of the company’s fixed life on 28 February 2018. Following consultation with shareholders, the Board has announced that it is putting forward proposals to offer shareholders the choice of: (i) a tax and cost efficient rollover into JPMorgan Multi-Asset Trust plc (“MATE”); and/or (ii) cash.
MATE has a long term objective to deliver a total return of 6% p.a., including a 4% p.a. initial target distribution (paid quarterly) and will seek to maintain lower levels of volatility than a traditional equity portfolio. MATE will provide investors with access to the JPMorgan Multi-Asset platform, including alternative funds which were previously inaccessible to retail investors. MATE published a prospectus on 24 January 2018 in connection with the issuance of shares pursuant to the rollover, together with an initial placing, offer for subscription and intermediaries offer for a target issue of £150 million.
The Proposals
The Proposals envisage a reconstruction of the company by means of a members’ voluntary liquidation pursuant to a scheme of reconstruction under section 110 of the Insolvency Act. Under the Scheme, ZDP shareholders may elect to receive their final capital entitlement payment of 192.132627 pence per ZDP Share in:
- New MATE Shares; and/or
- Cash
Ordinary shareholders may elect to receive their entitlements on a winding up in:
- New MATE Shares; and/or
- Cash
The directors consider that the proposals should have the following benefits for those who choose to rollover their investment into New MATE Shares.
- The opportunity to invest in an investment trust with a primary focus of providing regular dividend income, combined with the potential for long term capital growth.
- Access to a diversified multi-asset portfolio managed by a leading global multi-asset manager.
- A target annual yield of 4.0 per cent. in respect of the first financial period on the initial issue price with a progressive distribution policy.
- They will enable shareholders to retain market exposure through another investment trust whose portfolio is also managed by JPMorgan and to continue to receive investment returns without triggering an immediate liability to capital gains tax.
- They will enable shareholders to avoid dealing and other costs, including stamp duty, associated with a share purchase in the secondary market.
Dividends
The company has declared a fourth interim dividend of 2.0p per ordinary share which will be paid on 23 February 2018 prior to the Wind up Date.
In light of the timing of the fourth interim dividend payment, relative to the expected scheme timetable, no dividend reinvestment will be made available to shareholders.
The proposals are conditional on the approval of shareholders.
JPI / JPIU / MATE : JPMorgan Income and Capital finds a MATE