James Carthew: Cost disclosure confusion stalls M&A activity
M&A activity across the investment trust universe has been slow and piecemeal given the potential bargains on offer.
One of the weirdest things about the investment companies market currently is the lack of read across from M&A activity in the sector to similar trusts.
For example, two bidders compete to acquire Harmony Energy Income Trust (HEIT), with the winner willing to pay the full net asset value (NAV) for the company. Meanwhile, Gresham House Energy Storage (GRID) and Gore Street Energy Storage (GSF) languish on discounts of 42.6% and 39.6%, respectively.
In the infrastructure sector, how can 3i Infrastructure (3IN) and Pantheon Infrastructure (PINT) trade on 16% plus discounts when they have proven they can deliver higher long-term returns than BBGI Global Infrastructure (BBGI), which is being taken out at a premium to NAV?
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