Asia Dragon Trust announces strategic review

The Asia Dragon Trust (DGN) announced a strategic review. This follows the recent proposal to combine with Ashoka WhiteOak Emerging Markets (AWEM) which was announced on 7 May 2024.

Background to the strategic review

In July 2023, the company announced a proposed combination with abrdn New Dawn Investment Trust to create an enlarged company with greater secondary market liquidity, lower management fees and lower ongoing charges. The company amended its investment policy to allow for investment into Australasia to provide greater geographic flexibility. The combination completed in November 2023.

The board stated in the company’s prospectus relating to the combination that it would continue to monitor performance, in particular in order to understand the drivers behind relative performance of the company and actions being taken by the company’s investment manager, abrdn Fund Managers Limited, in the light of such performance. That included monitoring the discount at which the shares of the company trade to its net asset value. In connection with this exercise, and further to the company’s announcement on 7 May 2024, the board believes it is now appropriate to undertake a full strategic review of the future of the company, including the ongoing investment management arrangements.

The board has appointed Stanhope Consulting to assist in its strategic review. The board will be interested to consider proposals from established fund management groups with experience of managing equity strategies similar to that currently pursued by the company. Any such proposals will be considered alongside the current management arrangements. Interested parties are invited to contact Stanhope Consulting on the contact details below.

There is no certainty that any changes will result from the strategic review. The board will make further announcements in due course.

Ashoka response

Ashoka WhiteOak Emerging Markets says “The board is pleased to see proposals will be considered from established fund management groups with experience of managing equity strategies similar to that currently pursued by Asia Dragon. Accordingly, AWEM confirms the company’s intention to participate in the process given the previously announced attractive proposed transaction with support in principle from 56 per cent. of Asia Dragon shareholders.”

[QD comment: It makes sense that the Asia Dragon board wants to maximise the opportunity for shareholders by canvassing approaches from other parties. It is hard to see how anyone is going to compete with a 50% exit opportunity, however.]

DGN : Asia Dragon Trust announces strategic review

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