BlackRock Income and Growth (BRIG) has launched a strategic review and invited proposals for the future of the company, as its board looks to address the trust’s small size, limited liquidity and operating costs.
The board said that, following consultation with manager BlackRock, it is seeking a “more sustainable and competitive future strategy” that will maximise value for shareholders over the long term.
Significantly, the review is not restricted to preserving BRIG in its current form. The board has invited proposals for the future strategy of the company, including potential corporate solutions, and said that these do not need to retain BRIG’s existing UK-only investment mandate.
BlackRock will continue to manage the portfolio as normal while the review takes place.
Size increasingly an issue
The review comes as the investment trust sector continues to consolidate, with smaller funds finding it increasingly difficult to attract investors and absorb their fixed costs.
With a market capitalisation of just £43m, BRIG is one of the smaller trusts in the UK Equity Income sector. The shares trade on a 13.0% discount to net asset value (NAV). Its ongoing charges were 1.15%, although BlackRock agreed earlier this year to cap these at 1.08% of average net assets.
The discount has been a persistent problem. In trying to control this, and to provide liquidity, share buybacks have been used but have inevitably reduced the trust’s size further.
Performance has also been challenging. In the six months to 30 April 2026, BRIG delivered an NAV total return of 4.0%, half the 8.0% return from its FTSE All-Share benchmark.
QuotedData’s view
QuotedData’s Richard Williams said: “The announcement is short, but the wording suggests BRIG’s board is prepared to consider fundamental change rather than simply tweaking the existing mandate. At around £43m, BRIG is operating at a scale that makes it increasingly difficult to compete with larger trusts. Fixed costs weigh more heavily, liquidity in the shares is limited and, despite buybacks, the discount has remained stubbornly wide. Buybacks themselves create something of a vicious circle for a trust of this size: they can be accretive to NAV and provide an exit for sellers, but they make an already small fund smaller. Opening the review to proposals beyond UK equities gives the board considerable flexibility. Potential outcomes could include a combination with another investment company, a change of mandate or manager, or some form of reconstruction or return of capital. At this stage, however, the board has given no indication of which, if any, of these it prefers.”
