European Opportunities Trust (EOT) and JPMorgan European Growth & Income (JEGI) have published circulars for the proposed liquidation of EOT and the option for shareholders to roll their investments into JEGI. As announced on 29 May, shareholders can also choose a cash exit or a new Liontrust fund being launched for EOT fund manager Alexander Darwall. The proposals require the approval of EOT shareholders at meetings on 28 July and 7 August. JEGI shareholders will be asked to approve the issuance of new shares to EOT investors on 28 July.
James Carthew, head of investment company research at QuotedData, said: “My preference amongst the options presented to EOT shareholders would be to roll into JEGI. You get to preserve your exposure to Europe, but through the best-performing trust in the sector, with lower fees, a higher income and less stock specific risk.”
Workspace (WKP), the £637m flexible office space provider, has published a presentation containing its full response and rejection of the letter and presentation by activist hedge fund Saba Capital on 17 June. Saba, which holds a 24.7% position in Workspace, is seeking to replace its board at the annual general meeting on 23 July. Workspace strongly advises shareholders to re-elect the board and vote against Saba’s six nominees saying it had confidence “in the strength of the company’s repositioning strategy” announced in the full-year results on 10 June and the current board’s ability to “deliver that strategy and maximise long-term sustainable value for all shareholders”.
QuotedData’s James Carthew said: “Workspace has been a pretty dreadful investment and there is no guarantee that the new management team can turn that around. However, I haven’t yet found anyone that believes the Saba option is a better idea or is convinced that it understands the complexities of Workspace’s business. I would vote with the board’s recommendations.”
BlackRock American Income (BRAI) has notched up a successful first year for its new quantitative investment policy. The £165m investment trust generated a 31.7% total investment return in the year to 30 April from its data-crunching search for value stocks which it adopted on 17 April last year. This beat the 26.7% return from its benchmark, the Russell 1000 Value index, and came in half-year results showing a 12.3% underlying return in the six months from 31 October that also beat the benchmark’s 10.2%. Shareholders did even better in the half-year period with an 18.7% return, including dividends, as the shares moved from a 5% discount to a 0.3% premium over net asset value. The re-rating enabled BRAI to re-issue £1.4m or 570,000 shares from treasury, helping to lift net assets from £129.5m to £142.6m. Since the half-year-end further share issuance and a 10.4% price has rise boosted the portfolio to £162.7m. Top performing stocks included Micron Technology, Devon Energy and Bristol Myers Squibb partly offset by smaller declines in Copart, Conocophillips and Ciena. Portfolio managers Travis Cooke and Muzo Kayacan said turbulent news and market moves presented their computer models with a broad range of opportunities to assess. “So although, as is almost always the case, there are reasons to be worried about so many things – market bubbles, inflation, war, politics, mass redundancies thanks to artificial intelligence – holding a broad portfolio of attractively valued stocks across multiple sectors seems like a sensible approach in the current climate.”
James Carthew said: “It is great to see another period of outperformance from BlackRock American Income and the reissuance of nearly 4m shares. BRAI may have a way to go to match North American Income’s roughly £500m market cap, but I am increasingly optimistic that it will get there.”
Schroders Capital Global Innovation (INOV) is to almost double its £1.2m investment in Memo Therapeutics after the Swiss biotechnology company agreed to the €200m sale of its lead research programme into potravitug, a treatment of a complication for renal transplant patients. INOV, the former Woodford Patient Capital Trust that is winding down, first invested in Memo in October 2023. It will initially receive £2.1m or 1.8 times its original investment, adding 2.1% to net asset value at 31 March, with the proceeds forming part of the £23.5m of capital being returned to shareholders through a tender offer closing on 23 September. Further performance-related payments could take INOV’s pay-out to £6.7m. This is INOV’s fifth exit from an investment since Schroders replaced Woodford Investment Management in 2019.
Supermarket Income REIT (SUPR) has completed a £445m debt refinancing, with Lloyds and ABN Amro joining a bank syndicate of Barclays, HSBC, ING and RBS. The average margin across the new facilities is 1.18% above SONIA and will save £300,000 a year. The company’s weighted average cost of debt is 4.4% and is 98% fixed or hedged until June 2028.
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