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Investment trust insider on Japan activists

Investment trust insider on Japan activists – James Carthew: Activists in Japan make the future

Last week’s big surprise was the announcement of a proposed merger between Abrdn Japan (AJIT) and Nippon Active Value (NAVF). This is by no means a done deal, shareholders of both trusts will need to approve the proposal, and I think that the 25% cash exit opportunity that is included as part of the deal may prove insufficient. However, overall, it seems like a sensible solution to me.

The news came on the same day as Abrdn Latin American Income (ALAI) announced details of its planned liquidation. It also follows the bids for Industrials Reit (MLI) and Civitas Social Housing (CSH) that my colleague Richard Williams discussed last week.

The proactive nature of this move may encourage those who believe that boards are taking their governance responsibilities more seriously. However, it may also reflect the lack of brokers’ opportunities to profit from share issuance. A £30m IPO for Ashoka Whiteoak Emerging Markets (AWEM) and news of an £80m fundraise for Gresham House Energy Storage (GRID) are not going to make much of a dent in the brokers’ revenue deficit relative to the bumper markets of 2021, while M&A fees can be quite lucrative.

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