Keystone Positive Change’s board has identified a need for some kind of corporate action that addresses the size of the company, the low liquidity in its shares and the discount. It also wants to enable shareholders to retain exposure to a global impact strategy.

The board will consult more widely with shareholders and to explore the company’s options which include a rollover into the Baillie Gifford Positive Change Fund, an FCA authorised open-ended investment company with assets of about £1.8bn, substantially all of which is invested in the same portfolio of listed equities as the company.

That idea would necessitate dealing with the five illiquid private company investments, which comprised c.4.3% of the portfolio as at 31 August 2024.

The board intends that any proposal would include a cash exit option at a modest discount to NAV, factoring in the private company investments noted above.

A further announcement will be made in due course.

[We would observe that shareholders did not demand that Keystone Positive Change adopted a global impact strategy. The trust was being run as a UK equity income trust when the board adopted Stanhope Consulting’s idea to shift to this mandate and appoint Baillie Gifford. Nevertheless, the initial reaction was positive, which implies that some shareholders may favour this proposal. However, the largest shareholder (clients of Saba Capital, with 22% of the trust at 4 September) likely desires an exit at a price close to NAV. Unitisation – which would allow investors to cash in their stake fairly easily – coupled with a run-off vehicle for the private assets, may be the best option.]

KPC : Keystone Positive Change proposes unitisation