THE board of Scottish Investment Trust, which was founded in 1887, has agreed a deal which will end the company’s long history as an independent, self-managed fund.
It has agreed heads of terms with JPMorgan Global Growth & Income and this fund’s manager, JPMorgan Asset Management, for a combination of Scottish Investment Trust’s assets with JGGI.
James Will, chairman of Edinburgh-based Scottish Investment Trust, said: “The board undertook a lengthy and robust review process and considered a wide range of options for the Company. Ultimately, the proposal to combine The Scottish Investment Trust with JPMorgan Global Growth & Income was considered the most compelling outcome for shareholders, allowing for the creation of a company with an enlarged net asset base of in excess of £1.2 billion.
READ MORE: Ian McConnell: A truly bizarre take on Brexit which signals no help is coming
“Our two companies were both launched in 1887, and this combination will reflect both of their proud histories within a single vehicle with relevance for the investment market place today. JGGI offers a style-agnostic total return approach that has delivered index-beating performance, and it distributes an attractive level of dividend to investors. The Board would like to place on record its deep gratitude for the dedication and professionalism of the employees of The Scottish Investment Trust, including during the period of the review.”
READ MORE: Ian McConnell: Tale of two cities lays bare scale of challenges facing Glasgow
Scottish Investment Trust announced in June that it was inviting proposals from external asset managers following a five-year period in which it had underperformed a key global equities index.
The Edinburgh-based trust said then that these proposals would be considered alongside current arrangements.
The trust, of which Alasdair McKinnon is lead manager, noted it had adopted a “high conviction, global contrarian investment approach” in 2015.
Announcing the board’s review of investment management arrangements in a statement to the stock market back in June, the trust said Stanhope Consulting had been appointed to assist in this process. It added there was “no certainty” any changes would result, with the board noting “strong recent short-term performance”.
It said: “The board’s view was that a period of at least five years would be required to evaluate the company’s returns under this mandate. The company does not have a formal benchmark but, by way of comparison, the company’s NAV (net asset value) total return has underperformed the sterling total return of the MSCI All Country World Index over the five years ended April 30, 2021.”
Unveiling the outcome of its review today, Scottish Investment Trust said: "As part of the review, the Board invited proposals from established fund management groups with the experience of managing listed closed-ended funds designed to deliver, over the longer term, above index returns through a diversified global portfolio of attractively valued companies with good earnings prospects and sustainable dividend growth. These proposals were reviewed alongside the Company’s current management arrangements."
It declared that "a large number of proposals was received, and each one was carefully evaluated by the board, with assistance from Stanhope Consulting, against a wide range of criteria".
Scottish Investment Trust said: "As part of this thorough exercise, consideration was given in turn to retaining the Company’s internal investment management structure; to appointing an external third party manager; and to effecting a combination with another investment trust. The Board would like to thank all of those who participated in the process, including the incumbent management team."
It added: "The board was particularly impressed by the investment strategy that JP Morgan Asset Management deploys for the benefit of JPMorgan Global Growth & Income, and has concluded that the benefits of a combination with JGGI to form an enlarged company with net assets in excess of £1.2 billion would represent the most compelling outcome for SCIN (Scottish Investment Trust) shareholders."
Scottish Investment Trust's shareholders will receive new JGGI shares under the deal.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel