By Patrick Sanders, Reporter, Trustnet, 25 June 2025:
The number of investment trusts on the market has dropped by almost a fifth over the past three years, according to AJ Bell.
The platform’s analysis of data from the Association of Investment Companies (AIC) found 279 trusts were listed on the London market at the end of May 2025, down from 337 in the same month of 2022. This is a fall of 17%..
Firstly, many trusts are “trading well below the underlying value of their portfolio”, creating attractive bargains for international investors. The average investment trust currently trades at a 14% discount to net asset value (NAV) but some have a discount of more than 50%, according to AIC data..
There have been several high-profile takeover bids recently, including the drawn-out battle for NHS property business Assura, which has been running since February..
While this was the most contested recent bid, it is not the only one. Earlier this month Downing Renewables and Infrastructure Trust (DORE) agreed to a £175M bid from Polar Nimrod Topco Limited (Bidco), a subsidiary of Bagnell Energy. It has secured the backing of 22.5% of eligible shareholders.
Matthew Read, senior data analyst at QuotedData, noted that “by most objective measures, the trust has performed well”. It is up 35.9% over the past year, which is the best performance in the IT Renewable Energy Infrastructure sector.
However, it has faced several headwinds, including rising interest rates, a lack of scale and limited liquidity, with a buyback programme in 2023 that failed to close the discount in any meaningful way, he explained. As a result, it has fallen out of favour with investors despite strong returns.
“This deal follows a now-familiar playbook: a subscale, well-managed renewables trust with strong NAV performance finds itself persistently undervalued by public markets and is ultimately taken private by a long-term investor that can see the potential,” Read said.
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