By Emma Wallis, News editor, Trustnet, 10 December 2024:
Some of the largest and best-known investment trusts are on the cusp of events that could boost their share prices, narrow their discounts and reward shareholders, including Scottish Mortgage and Pershing Square Holdings..
A significant catalyst for Scottish Mortgage could be its 4.8% allocation to Space Exploration Technologies (SpaceX), which is in talks to sell shares owned by employees and other insiders. The transaction is expected to value SpaceX at about $350bn according to Bloomberg News – a huge jump from the $255bn valuation estimate Bloomberg published in November..
Several other trusts managed by Baillie Gifford have significant stakes in SpaceX, including Edinburgh Worldwide and the Baillie Gifford US Growth trust, although unlike Scottish Mortgage they are trading at slight premiums.
Edinburgh Worldwide has additional catalysts of its own. It announced plans on 20 November to return up to £130m to shareholders next year. The trust is also changing the investment process and team composition, restructuring the portfolio to reduce holdings to 60-100 companies from 75-125, and buying back shares..
Another company with a potential catalyst is Oakley Capital Investments, which invests in private equity. It is mulling a main market listing, which ought to help trigger a re-rating closer to peer HgCapital Trust, according to James Carthew, QuotedData’s head of investment company research.
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