AVI Japan Opportunity is proposing to merge (via a s110 scheme) with Fidelity Japan to create a more liquid, larger fund, targeting highly attractive investment opportunities in the Japanese equities space. The idea is supported by Fidelity Japan’s largest shareholder, City of London Investment Management, which holds approximately 23% of FJV’s issued share capital.
Fidelity Japan trades on a much wider discount, and so its shareholders should see a material uplift in the market value of their shareholding. They’ll also get to be invested in a much better performing vehicle.
AVI Japan Opportunity offers an annual uncapped redemption every October, but in advance of that, Fidelity Japan shareholders are also being offered a cash exit of up to 25% in connection with the deal.
Norman Crighton, chair of AJOT commented: “The AJOT board has closely followed Fidelity Japan Trust, its public disclosures, performance and its interactions with shareholders and the market over the last few years. We have sought to engage with the FJV board on numerous occasions to discuss the combination of the two companies to create a market leading Japanese investment trust. We were disappointed to read in FJV’s final results statements that the FJV board recommends a continuation of the status quo, with no liquidity offered until 2028, instead of engaging in constructive dialogue regarding our proposal, which we believe is in the best interests of all shareholders.”
Michael Sugrue, City of London Investment Management commented: “City of London Investment Management supports consolidation in the UK Investment Trust sector. We believe trusts that deliver outperformance whilst protecting shareholder value through active discount management should be the beneficiaries. The manager of AJOT has delivered strong investment performance since inception and the ongoing discount control mechanisms implemented by the Board have protected shareholder value in an environment where many other listed closed end funds have seen their discounts significantly widen.“
To progress the idea, the AJOT board has made efforts to explore discussions with the FJV board, beginning with a written proposal to merge the two trusts in August 2024. Since then, prompted by FJV shareholders who had not been consulted on AJOT’s proposal, the AJOT board met with two of the directors of the FJV board in March 2025 to discuss the proposals further. No further response had been received from the FJV board since this meeting.
AJOT is making this proposal public ahead of FJV’s continuation vote in May, such that FJV shareholders can independently assess FJV’s performance and consider the alternative solution presented to their board.
[I know we had already suggested that JPMorgan Japan would be a good fit for Fidelity Japan, but this makes equal sense. AVI Japan Opportunity’s track record and prospects mean that it deserves to be much bigger than it is.]
AJOT : AVI Japan Opportunity wants to merge with Fidelity Japan, largest shareholder onside
