JPMorgan Multi-Asset Growth & Income (MATE) and JPMorgan Global Growth & Income (JGGI) have announced that the two companies have agreed heads of terms in respect of a proposed rollover of assets from MATE to JGGI. MATE shareholders will receive new shares in JGGI which will provide them with exposure to a diversified portfolio of global equities managed by JPMorgan Funds Limited and a company with a strong performance record and a well-established dividend policy.
The board of MATE recognises that the size of the company limits its appeal to investors. As a consequence, the board intends to unanimously recommend the transaction to its shareholders, as it believes that the transaction provides the most attractive option for MATE’s shareholders, in particular taking into account the strong performance, improved share rating, significantly greater economies of scale and secondary market liquidity that will result from a shareholding in JGGI.
The board of JGGI believes that the proposals will provide additional scale to JGGI allowing shareholders to benefit from further cost efficiencies, in particular, as a result of the company’s tiered management fee structure. On the basis of valuations as at 22 January 2024, following implementation of the proposals the weighted average management fee payable on NAV is expected to be 0.42 per cent. per annum and the ongoing charges ratio is expected to be below 0.50 per cent.
JPMorgan Funds Limited has agreed to make a cost contribution, to take effect as a waiver of its management fee, equal to the aggregate of the transaction costs incurred by each of JGGI and MATE in connection with the proposals. Any costs of the realignment/realisation of the MATE portfolio will be borne by MATE. Any costs associated with the transfer of the MATE portfolio to JGGI and any admission fees in connection with the issue of new JGGI shares shall be borne by the enlarged JGGI.
The Proposals will be subject to the approval by the shareholders of both JGGI and MATE in addition to regulatory and tax approvals. It is expected that the scheme and proposals will be completed by the end of March 2024.
[QD comment – James Carthew: I am a bit perplexed by this. In July 2023, 75% of MATE’s shareholders voted for the trust to continue for a further five years, the trust is and has been trading close to asset value for some time – suggesting that there are grounds for hope of an expansion, and the marketing message has been one of focusing on the long-term. MATE is also the second-best performing flexible investment trust over the past year (behind the oddity which is Hansa).]
MATE : Proposed merger of JPMorgan Multi-Asset Growth & Income and Global Growth & Income funds