Keystone Positive Change (KPC) is proposing that it be wound up with shareholders offered a cash exit in full but, reflecting the board’s confidence in the long-term prospects for Baillie Gifford’s “Positive Change” strategy adopted by the company in early 2021, shareholders will also be offered the option to rollover into Baillie Gifford Positive Change Fund, an FCA authorised open-ended investment company with assets of c.£1.8bn. For shareholders opting for the cash exit, KPC says that this will be “at a modest discount to the formula asset value” calculated for the purposes of the scheme. It is expected that the transaction will take effect during the first quarter of 2025 and further announcements will be made in due course.

KPC’s board has previously said any transaction would need to take into account the illiquidity of the company’s five private company investments, which comprised c.4.3% of the portfolio as at 31 August 2024. The board says that these investments are unlikely to be realisable within the timeframe of the proposed scheme of reconstruction and that, if this proves correct, their value would not be incorporated in the FAV with the unrealised investments instead being carried forward into the winding-up and with any net proceeds received from the realisation of these investments being distributed to all shareholders at a later date.

The board has also said that, given KPC’s circumstances, it has been agreed that Ranjan Ramparia will not be appointed as a non-executive director, as has been previously announced.

Comments from Karen Brade, chair of Keystone Positive Change

“The Board retains a high degree of conviction in the Positive Change strategy and believes it is well suited to the investment trust structure which enables the Managers to access the significant impact opportunities available from committing primary capital to private companies and investing in less liquid public companies. However, we recognise that the Company has not received sufficient support from Shareholders to allow the strategy the time needed to play out over the period to the February 2027 continuation vote that we recently introduced. The Board has therefore reluctantly agreed to propose the Scheme, which will provide Shareholders with an opportunity to continue their investment through the rollover option.”