Polar Capital Global Financials Trust (PCFT) has shared further details around the future of the company, including the structure of its upcoming 2025 tender offer, proposed changes to fees and dividend policy, and the conditions for its continuation as a listed vehicle.
At the company’s AGM held yesterday, chair Simon Cordery confirmed that PCFT will proceed with the scheduled 100% tender offer by 30 June 2025, in line with its articles of association. Shareholders will be able to tender their shares at NAV less costs, which are expected to be no more than 1% of NAV in total. Further 100% tenders will be offered every five years thereafter, beginning in 2030.
The trust will retain its current investment strategy, continuing to focus on listed global financials, with Polar Capital LLP remaining as manager and the structure unchanged as a closed-ended investment trust. Key proposals also include:
- Management fees: A new tiered base fee structure will apply from 1 July 2025, with 0.70% on the first £500m of assets and 0.65% above that. The fee base will be split equally between NAV and the lower of market cap or NAV, replacing the current NAV-only basis. The performance fee will be scrapped altogether.
- Dividend policy: Subject to approval at the AGM, an “enhanced dividend” policy will be adopted from 1 December 2025. The trust will target annual dividends equivalent to 4% of NAV, paid quarterly at 1% per quarter. Payments will be made from revenue and, if necessary, distributable capital reserves.
- Gearing: The company will continue to use modest gearing, with a maximum of 20% of NAV at the time of borrowing.
Continuation contingent on post-tender size
The board has stated that the implementation of the proposals will depend on the level of net assets remaining following the tender. If the company is considered too small to be viable, the board will instead bring forward proposals for a wind-up and offer investors a rollover option into an alternative vehicle. A circular with full details and shareholder resolutions is expected by the end of May, with completion of the tender offer targeted by the end of June.
[QD comment MR: We are pleased to see PCFT’s board putting forward some proposals regarding its future in advance of the upcoming continuation vote and we think that these are thoughtful and shareholder friendly. Specifically, the continuation of the regular five-yearly tender offers investors a built-in exit opportunity at close to NAV, while the enhanced dividend policy should appeal to income seekers in a sector not traditionally known for high payouts. Scrapping the performance fee helps simplify the structure and should hopefully make it more appealing to potential investors too.
In our view, PCFT offers something different in the investment companies space and we think that, given its track record, it deserves to continue and we are pleased to see that the proposals leave the strategy intact. The viability condition post-tender is a prudent safeguard in our view, ensuring that the trust only continues if it remains of sufficient scale, although we would hope this won’t be necessary. Overall, we think that the proposals offer a clear route forward and a good balance between flexibility and commitment to the existing strategy.]
