Frostrow Capital are intending on putting out on the newswires a weekly recap of the investment trust news and themes seen. If it looks interesting for you, please subscribe to receive it:
Good morning investment trust investors,
Contents
- Overview for the week
- Frostrow Investor Events
- Investment Themes
- Sector data for the week
- Overview for the week
The weekend and early part of the week saw the assembly of a number of world leaders in China, including Putin at the Shanghai Cooperation Organisation summit. Contrary to what I said last week, Modi was there also, alongside the North Korean, Turkish and Iranian leaders in a sign for the West of the changing geopolitical dynamic and a message to Donald Trump akin to two fingers. Much was made of the scale of the military capability of China including hypersonic missiles designed to take out ships at sea. This was absolutely not a parade to commemorate the end of WW2 but an opportunity for China to create the very image of a redrawing of the global balance of power, albeit Kim, Putin and Xi stopped short of a formal trilateral meeting in Beijing.
This overall environment has made the EU get a step closer to a trading deal with the Latin American Mercasur bloc. In the UK, manufacturing contracted for the 11th month in a row, with the pace of contraction the fastest for 4 months. The BCC did revise higher growth forecast though to 1.3% from 1.1%. The week also saw quite a bit of speculation about long bond yields (not just the UK), arguably making more press due to Darren Jones assuming the new role of Chief Secretary to the PM embarrassing Rachel Reeves as Chancellor. (As the piece is finalized, we note the Cabinet reshuffle now underway also of course). In fairness, Tuesday was the largest Gilt issuance day on record, so extra yield required to compensate investors feels quite natural given demand and supply. In addition, the Autumn Budget date has finally been set for 26 November in the UK, later than the norm. We further note the US 30-year Treasury yield also briefly hit 5% again (last hit in mid July) highlighting the broader debt and fiscal concerns across Western governments (and the 30 September next Government funding deadline approaching in the US), albeit those bond yields are going to close the week lower than last as calm returns, and equities are generally positive.
In the investment trust sector, discounts have continued to widen (by 70bps) indicating a tougher investor sentiment, further indicated by the gold price breaking higher again (see share price move for Frostrow client, CQS Natural Resources Growth & Income this month). There were though a couple of examples of alternatives trusts selling assets at premia to NAV highlighting the nonsense that discounts can represent if one is willing to be more patient. Frostrow held its Edinburgh investor conference this week, bringing six of the finest investment trust managers north of the border. One of the Trusts presenting being Custodian Property Income REIT who put out a timely update this week highlighting the strong income attractions of the vehicle at current price levels (circa 8% yield). Generally discounts to NAV remain elevated as the bond market continues to work its way back to normal post the GFC sustained zero interest rate world and ETFs continue to ‘drive the bus’ for most investors in the market. Frostrow comment on this and other newsflow in the latest August podcast now out (“Frostrow Talks Trusts”), see link further below. Not a time to be short of investment trusts we think.
- Frostrow Investor Events
Augmentum Fintech (AUGM LN, Financials & Financial Innovation, £141.5m mkt capn, 47.6% discount to NAV): Please contact Frostrow for interest in seeing Tim Levene in London and the regions in 2025. The AUGM Capital Markets Day took place on Wednesday 2 July 2025 at Searcy’s at The Gherkin, between approx. 8:30am and 1:30pm. The latest Frostrow webinar from our London seminar in May 2025 is available to see on You Tube here.
https://www.youtube.com/watch?v=HsulTfN_o1A
The IMC webinar from 1 July 2025 is available here:
Aurora UK Alpha (ARR LN, UK All Companies, £270.4m mkt capn, 10.9% discount to NAV): the Phoenix investment team are available for meetings with investors in 2025. The last webinar was recorded on 14 July 2025 and is available to watch here:
https://www.youtube.com/watch?v=0hl0yNZgRlM
Kartik Kumar gives his updated thoughts at the time of our London investor seminar in May 2025 here:
https://www.youtube.com/watch?v=ZZGGM5Aw5sw
And via UK Investor Magazine also (May 2025):
Aurora UK Alpha Investment Presentation May 2025 - UK Investor Magazine
Biotech Growth Trust (BIOG LN, Biotechnology & Healthcare, £217.0m mkt cap, 10.8% discount to NAV): Geoff Hsu, lead manager, gives further thoughts at the time of the Frostrow London investor event in May 2025 here:
https://www.youtube.com/watch?v=VjloEBj9O1I
The AGM recording, including presentation from portfolio manager Geoff Hsu, from 17 July 2025 is available on the following link:
https://www.youtube.com/watch?v=qHK5hrdFehI&t=16s
CC Japan Income & Growth Trust (CCJI LN, Japan, £272.2m mkt capn, 9.2% discount to NAV): please contact Frostrow Capital in order to arrange a meeting with management in 2025. In addition, we highlight the most up-to-date thoughts from management at the time of our London investor seminar in May 2025 here:
https://www.youtube.com/watch?v=VcVErs9OUN8
CCJI management conducted a webinar on 17 June 2025 via Investor Meet Company, recording available here:
https://www.youtube.com/watch?v=7X_p5A3SXT8
CQS Natural Resources Growth & Income (CYN LN, Commodities & Natural Resources, £161.7m mkt capn, 2.3% discount to NAV): please contact Frostrow to arrange a one-on-one meeting with management in 2025. The managers presented on the investment opportunity on 10 June 2025, so please have a look if you were not able to make it:
https://www.youtube.com/watch?v=wJtWKAesmOI
Custodian Property Income REIT (CREI LN, Property UK Commercial, £350.8m mkt capn, 24.1% discount to NAV): Richard Shepherd-Cross, lead manager, available for meetings in 2025 (physical throughout UK, or zoom, as per preference). Richard also gives his most updated thoughts at the time of the Frostrow London investor event in May 2025 here:
https://www.youtube.com/watch?v=XOQA7R2yBKk
Ecofin Global Utilities & Infrastructure (EGL LN, Infrastructure Securities, £225.2m mkt capn, 8.5% discount to NAV) : Jean-Hugues de laMaze, lead manager of the Trust presented at a webinar with Frostrow on Wednesday 23 April 2025. The link to the recording is available on the link below:
https://www.youtube.com/watch?v=lVkYbR67ecE
Jean-Hugues also presented via IMC on 10 July 2025, with the presentation link below:
https://www.investormeetcompany.com/companies/ecofin-global-utilities-and-infrastructure-trust-plc
Finsbury Growth & Income Trust (FGT LN, UK Equity Income, £1,201.7m mkt capn, 6.7% discount to NAV): Nick Train’s AGM presentation (January 2025) was recorded and is available to view on the Frostrow You Tube page. Click the link here to see it, it is worth a view:
https://www.youtube.com/watch?v=yE9HV__Iwlc
We also highlight our most recent recording of Nick’s presentation following our London investor event (May 2025):
https://www.youtube.com/watch?v=HeiFCPd5zS8
MIGO Opportunities Trust (MIGO LN, Flexible Investment, £68.9m mkt capn, 3.2% discount to NAV): Following on from the HY results release, Nick Greenwood and Charlotte Cuthbertson presented on a webinar at 11am on 24 January 2025. This one stop shop is a great way to play the discounts on offer generally in the listed fund sector. The recording can be accessed on Frostrow’s You Tube page here:
https://www.youtube.com/watch?v=XuSoFuNKSXk
To watch the most recent update which took place on Monday 23 June 2025 with Tom Treanor and Charlotte Cuthbertson, please see below for the link:
https://www.youtube.com/watch?v=1BT7aH0da04
Please also see the link below for the latest webinar held with Investor Meet Company:
MIGO OPPORTUNITIES TRUST PLC - Investor Update Webinar - YouTube
Mobius Investment Trust (MMIT LN, Global Emerging Markets, £165.6m mkt capn, 5.5% discount to NAV): Carlos Hardenberg, lead manager, presented at a webinar from his trip to Taiwan in April 2025. Please see below the link to the recording:
https://www.youtube.com/watch?v=sMBNxj6ZD-o
In addition, Carlos gives his thoughts at the time of the Frostrow London investor event in May 2025 here:
https://www.youtube.com/watch?v=E4GIjtAelhc
Carlos also presented via Investor Meet Company on 24 June 2025, see below for the link to the recording:
https://www.investormeetcompany.com/meetings/investor-presentation-845
Temple Bar Investment Trust (TMPL LN, UK Equity Income, £956.3m mkt capn, 1.2% discount to NAV): Ian Lance and Nick Purves presented on the trust at a webinar on 18 March 2025. Please do click on the link below to see the recording as well as the link to ‘reflections on current market volatility’ or to hear the Chairman, Richard Wyatt, or to see the recent AGM update
https://www.youtube.com/watch?v=wkaifQndXaQ
https://www.templebarinvestments.co.uk/media/insights/reflections-current-market-volatility/
https://www.investormeetcompany.com/updates/an-update-from-the-chairman/show
https://www.youtube.com/watch?v=AcVspDPT3-c
The Managers presented an update on 12 June 2025, click here to watch if you were not able to make it:
https://www.youtube.com/embed/M37EYIh-VCM?rel=o
Read the quarterly Temple Bar IT newsletter here: https://www.investormeetcompany.com/updates/finding-value-in-modern-markets/show
Worldwide Healthcare Trust (WWH LN, Biotechnology & Healthcare, £1,419.4m mkt capn, 6.9% discount to NAV): Sven Borho presented at this year’s AGM in July 2025, see below for the link to watch:
https://www.youtube.com/watch?v=x0K6RxlI40c
In addition, if you did not make the 30-year anniversary event and you would like a copy of the presentation, please contact Frostrow
Frostrow Investor Relations team – Messrs Grant Challis, Neil Winward, Matt Burrows, Matt Norfolk-Clarke & Nicholas Todd
Please contact us on ir@frostrow.com
Trump is doing his best to re-set the world trade order and in so doing will potentially re-set the investment landscape. Saba Capital have said they are “ready to buy billions more UK investment trusts [and they are] open to taking stakes in trusts that hold illiquid assets [now also]”. Rachel Reeves is promoting LTAFs whilst multiple asset classes via top class managers are already available at discounts to NAV in the investment trust sector. What has worked for the last few years (ie US Equity trackers, passive investments and short dated bonds) will not necessarily be the best idea in the coming periods. Whether there is a “crack” in the bond market or not, the investment trust sector is here offering best in class active management from the world’s top fund managers in a variety of liquid and less liquid asset classes. It continues to represent one third of the FTSE 250 Index and half of the FTSE Small Cap Index. There are highly valuable actively managed listed fund vehicles using the structure appropriately available for savings and investment today, as there have been for the last 150 + years. They act as a strong complement to passive ETF holdings also. Do not be short of investment trusts – they represent the greatest financial secret on these fine shores even if our Chancellor has never heard of them.
Find us on the web: https://www.frostrow.com/
Find us on You Tube: https://www.youtube.com/channel/UCAptpfmx0HITqvlI68psd7Q
Check out our August 2025 summary podcast here: Frostrow Talks Trusts August 2025 Summary | Updates | Investor Meet Company
Frostrow Capital, bringing you high quality, differentiated product in a UK listed closed-ended form
- Further investment themes evident in the investment trust sector this week include:
Discount control
As an example, Wednesday saw a total of 482 LSE market announcements across the spectrum of which 188 referred to a buyback, 39%). 2 announcements were in reference to issuing new shares.
Diverse Income Trust (DIVI LN, UK Equity Income, £237.6m mkt capn, 8.8% discount to NAV): The Company has a redemption facility through which shareholders are entitled to request the redemption of all or part of their holding of ordinary shares on an annual basis. As previously announced, 72,822,392 Ordinary Shares representing 30.806% of issued share capital have elected to redeem. The Board has resolved to effect the Redemption using the redemption pool method set out in the Company's articles of association. "...the liquidation of the Redemption Pool is expected to take some weeks or months, and the final capital sum may differ from the Company's net asset value per Ordinary Share at the Redemption Point depending on market conditions."
Fidelity Emerging Markets (FEML LN, Global Emerging Markets, £554.5m mkt capn, 8.5% discount to NAV): Strathclyde Pension Fund, which holds 25.7% of issued share capital, has agreed to sell into a share repurchase agreement, at a 14% discount to NAV. "Given the size of Strathclyde's holding, the Repurchase may only be effected following the passing of a resolution of the Company's shareholders at an Extraordinary General Meeting authorising the Repurchase." A circular will therefore be produced in the coming days.There will be an immediate NAV uplift of circa 4% for remaining shareholders if the transaction takes place "The Company has committed to hold a continuation vote in 2026 and every five years thereafter. The Board re-confirms its intention to propose a continuation vote at the 2026 AGM."
Value & Indexed Property Income Trust (VIP LN, Property – UK Commercial, £87.8m mkt capn): published a circular in connection with the Board's proposals for the Company to offer Shareholders a cash exit by way of a tender offer for up to 30% of share capital. "As previously announced, the Board has also determined that it would be in the best interests of Shareholders as a whole to introduce an obligation on the Directors to propose a resolution to wind up the Company or other such form of exit proposal provided any such proposal has as its objective the discontinuation of the Company at a general meeting to be held on or prior to 31 March 2033. This coincides with the expiry of the Company's current fixed rate loan and the Company will not take out any further loans with an expiry date after 31 March 2033. The Board, therefore, also intends to propose, at the General Meeting, an amendment to the Company's Articles to introduce this obligation and provide shareholders with a guaranteed exit opportunity.In addition the Board would, after the completion of the Proposed Tender Offer, adopt a discount control policy which would aim to keep the Company's share price discount to net asset value between 0 per cent. and 10 per cent. in normal circumstances at the Director's discretion...It is also intended that independent valuations of the Company's property portfolio would in future take place at the end of each calendar quarter, instead of half-yearly as at present."
Vietnam Enterprise Investments (VEIL LN, Country Specialist, £1,257.9m mkt capn, 18.3% discount to NAV) purchased 2% of share capital in August (8.9% 2025 YTD) noting the “the Board believes that the use of share buybacks remains an effective tool to manage the absolute level and volatility of the share price discount.”
Ashoka India Equity IT (AIE LN, India / Indian Subcontinent, £454.4m mkt capn, 2.7% discount to NAV): the Company has a redemption facility through which shareholders are entitled to request the redemption of all or part of their holding of ordinary shares on an annual basis. The total number of ordinary shares in respect of which valid redemption requests were received for the 30 September 2025 Redemption Point was 2,549,082 (representing 1.5% of the issued share capital).
Saba update
Brown Advisory US Smaller Companies (BASC LN, North American Smaller Companies, £148.0m mkt capn, 10.1% discount to NAV): Saba position increased from 11.1% to 12.2%
M&A news
Assura (AGR, £1,540m mkt capn) Shareholders who have not yet accepted the Revised Offer should note that the Revised Offer will remain open for acceptances until 1.00 p.m. on 10 September 2025. The Company subsequently noted that it will delist on 6 October 2025, with the last day of trading on the LSE expected to be 3 October.
Apax Global Alpha (APAX LN, Private Equity, £792.1m mkt capn, 17.5% discount to NAV) shareholders approved the Scheme of Arrangement with Janus Bidco and the effective date is expected to be 17 September (at which point the shares will be suspended) and consideration paid within 14 days of this date.
Warehouse REIT (WHR LN, Property – UK Logistics, £481.8m mkt capn, 12.1% discount to NAV) has updated on the acceptance level for Wapping Bidco’s recommended cash offer, which stands at 20,335,758 shares (4.78% of ISC).
Fidelity European Trust HY results to 30 June 2025 (FEV LN, Europe, £1,624.2m mkt capn, 3.4% discount to NAV): NAV TR +9.6% vs FTSE World Europe ex UK +14.3%; share price TR +16.7%; Subject to shareholder approval, the proposed combination of Fidelity European Trust PLC and Henderson European Trust PLC will be effective on 26 September 2025. In light of the proposed combination, the Board has decided to enhance its discount management policy such that the Company will seek to maintain any discount to net asset value in mid-single digits in normal market conditions
Strategic review update
Schroder BSC Social Impact Trust (SBSI LN, Flexible Investment, £56.1m mkt capn, 32.1% discount to NAV) announced a strategic review on 2 July 2025. Since then it has “received constructive feedback from the shareholder base which covered a wide range of preferred outcomes” and is “carefully considering fund structures and alternatives that would seek to optimise outcomes for shareholders, including those shareholders who have expressed a preference for a return of capital or improved liquidity.” Further update to come at or before the AGM in December 2025
Leaving the closed ended sector
Third Point Investors (TPOU LN, Hedge Funds, £408.7m mkt capn, 28.3% discount to NAV) announced the results of the redemption offer and an update on the acquisition of Malibu Life and the timetable for implementation of the proposals. "9,557,296 Ordinary Shares were submitted for redemption pursuant to the Redemption Offer. Based on the Reference NAV, 4,376,750 Ordinary Shares will be redeemed by the Company. This represents each redemption request being satisfied pro rata by c. 45.8 per cent." "Suspension of the Ordinary Shares to listing in the CEIF Category and to trading on the London Stock Exchange is expected to occur by 7:30 a.m. on 10 September 2025."
Results / updates
Custodian Property Income REIT trading update for quarter end June 2025 (CREI LN, Property – UK Commercial, £350.8m mkt capn, 24.1% discount to NAV): NAV TR +2.2%; dividend yield of 7.9% on share price of 76.1p. EPRA occupancy 90.9% (91.1% at 31/3/25). Significant potential for further income growth in the portfolio; NAV increased to £448.7m (31 Mar 2025: £423.5m), primarily due to the issuance of 22.9m shares through the corporate acquisition of Merlin. Net gearing[ was 26.9% LTV at 31 March 2025 (31 Mar 25: 27.9%). Weighted average cost of debt 3.8% (3.9% 31/3). £5m share buyback programme in place. "The Board believes the current share price materially undervalues the Company and its portfolio, including the security and quality of income offered through the fully covered dividend. Under the Buyback Programme shares will only be purchased if the Directors believed it would result in an increase in earnings per share or an increased NAV per share (or both) for remaining shareholders. At the current share price and given the latest expectations for future interest rates, the Directors believe the Buyback Programme is an attractive use of property disposal proceeds that will create value for shareholders." (Frostrow client)
BlackRock World Mining Trust HY results to 30 June 2025 (BRWM LN, Commodities & Natural Resources, £1,079.3m mkt capn, 8.3% discount to NAV): NAV TR +8.2% vs MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return) +9.5%; share price TR +12.5%; Company bought back 1.9% of share capital at a discount; Gearing 6.9% (12% at start of year). "Despite...near-term uncertainties, the long-term structural case for the mining sector remains compelling. The global transition to a low-carbon economy is expected to drive sustained demand for critical minerals and metals, particularly those essential to renewable energy infrastructure, electric vehicles and battery technologies. The rapid expansion of artificial intelligence and associated data infrastructure is also anticipated to further support demand for key industrial metals such as copper and aluminium. This positions the sector well to navigate near-term challenges and capitalise on future growth opportunities."
Abrdn UK Smaller Companies Growth Trust FY results to 30 June 2025 (AUSC LN, UK Smaller Companies, £296.7m mkt capn, 8.7% discount to NAV): NAV TR +6.8% vs Deutsche Numis Smaller Companies plus AIM (ex investment companies) Index +7.8%; share price TR +11.4%; FY dividends of 13.2pps (+10.0% 2024); "The increase in the dividend is partly as a result of the strength of the Revenue Account but also because share buy backs have reduced the number of shares qualifying for the dividend". Net gearing 6.6% (5.8% 2024). Revised management fee announced earlier in the year "represents an annual reduction of 17.3% in the fees charged by Aberdeen to manage the Company." Company bought back 16.8% of share capital adding 9.8p to NAV for those remaining invested. "The Board remains committed to its discount target of 8% in normal market conditions and will continue to be active in the market when it believes it to be in the best interests of shareholders." Changing name to "Aberdeen UK Smaller Companies Growth Trust"
Baillie Gifford Shin Nippon HY results to 31 July 2025 (BGS LN, Japanese Smaller Companies, £333.2m mkt capn, 10.3% discount to NAV): NAV TR +3.4% vs MSCI Japan Small Cap Index +7.9%. Share price TR +8.2%; "During the period, Brian Lum was promoted from deputy to the Company's lead portfolio manager, taking over from Praveen Kumar. Jared Anderson was appointed as deputy portfolio manager. The changes were implemented by Baillie Gifford following an internal review." Company has bought back approximately 23.1 million shares into treasury, equivalent to approximately 8.3% of the Company's issued share capital as at 31 January 2025. BGS NAV performance trails benchmark by 19.4% half through the measurement period for performance-triggered conditional offer in 2027. Chairman: “although there remains a loyal supportive base both of Baillie Gifford and Japanese small cap growth equities, I am in no doubt that patience in some quarters is being tested. If poor performance continues into the medium term, then I do not believe that a 15% tender offer will be sufficient and the Board will not hesitate to assess all available options.”
Gearing reduction
HarbourVest Global Private Equity (HVPE LN, Private Equity, £2,028.1m mkt capn, 34.8% discount to NAV): the Board has formally signed a Limited Partnership Agreement with HarbourVest Partners for its recently announced Separately Managed Account and has committed $125 million to the new structure. The adoption of the SMA structure is a key component of HVPE's strategy to maximise shareholder value and enhance portfolio flexibility. (as announced in May 2025). The structure should lead to a reduction in debt exposure and greater investment flexibility
Management team amendments
The Bankers Investment Trust (BNKR LN, Global, £1,261.1m mkt capn, 10.1% discount to NAV) has appointed Richard Clode as co-fund manager alongside Alex Crooke, effective immediately. “Richard will also assume management of the Company's North American portfolio from 31 October 2025.”
Fixed life fund update
Doric Nimrod Air Three Limited (DNA3 LN, Leasing, £138.6m mkt capn, 9.2% premium to NAV): Further to the July Announcement, and the subsequent Asset Sale Update provided on 28 August 2025, the Board is pleased to announce that, following the Lease End Date for MSN 132, sale proceeds of £33.07 million have been received with title successfully passing to Emirates
Wind down news
Home REIT (HOME LN, Property – UK Residential): The Company's cash together with rental income are expected to be sufficient to fund the Company's operational expenses and fees during the managed wind-down and for the next twelve months. "As announced on 22 August 2025, the Board and AEW have agreed a revised investment management agreement aligned to the Company's managed wind-down strategy and ongoing sale process...Asset management initiatives continue to focus on maximising the value and liquidity of assets while prioritising activities associated with health and safety and compliance." "The Managed Wind Down strategy continues to progress, with detailed due diligence on the property portfolio continuing. The Company anticipates that the portfolio sale process will conclude in Q4 2025. It is the intention of the Board that capital will be returned to Shareholders upon the completion of the realisation strategy. Shareholders should be aware, however, that the ability of the Company to make distributions to Shareholders may be constrained whilst the Company faces potential shareholder group litigation."
RM Infrastructure Income HY results to 30 June 2025 (RMII LN, Debt – Direct Lending, £46.8m mkt capn, 24.0% discount to NAV): NAV TR -4.87%; "After the implementation of the Managed Wind-down, approved in December 2023, the initial tender was completed during September 2024 with £17.48 million of capital being returned to Shareholders via the purchase of 19.73 million shares (16.6% of the Company's issued share capital at time of tender) at the price of 88.59 pence per share. This price represented a 21.86% premium to the pre-tender share price. The second tender offer was announced and completed during the Period. This second tender was for £17.41 million of capital or 21.62 million shares at a tender price of 80.52 pence per share. This price represented a 10.68% premium to the pre-tender share price. During the Period the Company purchased 89,044 shares at an average price of 72.50 pence per share. This was pursuant to the amendment to the Investment Management Agreement whereby the shares will be held in treasury and will vest to the Investment Manager subject to the aggregated net proceeds distributed to Shareholders in connection with the managed wind down. In total there are 358,639 shares now held in treasury with regards to this incentive scheme. The Company announced during the Period that it will change the dividend payment frequency from quarterly to semi annually. This is reflective of the desire to save on costs and that the overall amount available for dividend distribution has shrunk materially as the portfolio has reduced in size."
abrdn European Logistics Income (ASLI LN, Property – Europe, £193.7m mkt capn, 19.8% discount to NAV) IFRS NAV as at 30 June 2025: -6.7% over calendar Q2 2025 to €0.812; the NAV including a provision for estimated portfolio disposal and company structure liquidation costs decreased by -6.7% to €0.788. “The portfolio valuation decreased by €23.4m (-4.1%) to €545.2m,” to reflect achieved sale prices. “To date, 17 of the original 27 assets in the portfolio have been sold... The remaining 10 assets are at various stages of the sales process, with further completions targeted from Q4 2025 onwards.”
VPC Specialty Lending Investments (VSL LN, Debt – Direct Lending, £45.1m mkt capn, 44.9% discount to NAV) published a circular in relation to a Continuation Vote that was not, but should have been, proposed at the AGM on 11 June 2025 but will now be proposed at a General Meeting to be held on 22 September 2025. VSL “has been advised that it should seek the approval of shareholders to ratify this oversight,” as the lack of vote puts the company in breach of its Articles." "Since the Company is already in a period of managed wind down, the practical implications of the Continuation Resolution would be unlikely to change the Company's current strategy even if a Continuation Resolution were to fail. In such event, the Company's investments would continue to be realised in an orderly manner, that is, with a view to achieving a balance between returning cash to Shareholders promptly and maximising value. As a result, the Board is not proposing to put forward a replacement Continuation Resolution."
Dividend cut
Alternative Income REIT (AIRE LN, Property – UK Commercial, £51.3m mkt capn, 23.4% discount to NAV): secured new long term debt facilities with HSBC UK Bank plc. The facilities, consisting of both a fixed term 5 year loan of £31 million and a £10 million revolving credit facility. "Much has changed since the Group took out its current debt facilities in 2017, not least the cost of borrowing. The Bank of England interest rate, which at the time was 0.25%, has increased considerably. Following the announcement last month, the current Bank of England interest rate is 4%. As a result, the finance costs for the Group's current financial year ending on 30 June 2026 will rise significantly to approximately £2.2 million, compared with £1.4 million in previous financial years. Whilst there will be some mitigation to this figure, principally from the increase in rents from AIRE's property portfolio, this rise in costs will reduce the Group's distributable income. Over the past few years, including during the global COVID pandemic, AIRE has maintained an enviable record of collecting 100% of the rent. Provided that this remains the case and in the absence of any other unforeseen circumstances, the Board are targeting a dividend of no less than 5.6†pps for the year ending 30 June 2026 (30 June 2025: 6.2pps)."
Proof of valuation
International Public Partnership HY results to 30 June 2025 (INPP LN, Infrastructure, £2,185.9m mkt capn, 17.3% discount to NAV): NAV +2.8% to 148.7pps, driven by “strong portfolio performance, the successful execution of asset realisations at a meaningful premium to NAV” and accretion from share buybacks. “The weighted average discount rate remained stable at 9.0%.” Reiterates intention to return up to £200m of capital by 31 March 2026, of which £80m has been executed via share buybacks as at end-June; dividend growth guidance reiterated also at circa 2.5% in 2025 and 2026. "In 2025, the Company announced a further c.£90 million of realisations taking the realisation proceeds to over £345 million since June 2023. All realisations have been in line with, or at a premium to, the relevant published valuations."
Tufton Assets (SHIP LN, Leasing, £299.5m mkt capn, 14.4% discount to NAV) has sold Neon, for total proceeds of $23.5m, a 2.6% premium to its valuation as at 30 June 2025 (with divestments to date circa 6% above NAV). “The Board and the Investment Manager will consider reinvestment or return of the proceeds in accordance with the terms of the Mid-term Strategy Review and provide a further update in due course.”
Board independence
Oakley Capital Investments (OCI LN, Private Equity, £958.6m mkt capn, 24.6% discount to NAV) announced the results of its AGM, at which 23.8% of votes cast opposed Peter Dubens’ re-election as a Director. "The Board notes that although the resolution to re-elect Peter Dubens was passed with a substantial majority, there were a material number of votes cast against. While the composition of our Board complies with the independence requirements of the UK Listing Rules and the AIC Code, we understand that some shareholders have a policy of voting against the re-election of any directors who are not independent or who they do not believe to be independent. The Board has engaged with these shareholders in the past to discuss their position and concerns and will continue to do so in the future."
Acquisition / Disposal news
Cordiant Digital Infrastructure (CORD LN, Infrastructure, £719.8m mkt capn, 27.3% discount to NAV) the Company’s wholly owned Irish fibre platform, Speed Fibre Group, has completed its previously announced acquisition of BT Communications Ireland. This addition to the Speed Fibre platform represents a significant step in CORD's strategy to build platforms at scale in line with its Buy, Build & Grow model in key digital markets such as Ireland.
Caledonia Investments (CLDN LN, Flexible Investment, £1,990.6m mkt capn, 32.8% discount to NAV) agreed the sale of its minority interest in Stonehage Fleming Family & Partners to Corient Private Wealth for expected net cash proceeds of £288m (vs a £221m mark as at 31 March 2025), of which £251m will be received on closing and two further tranches 6 and 12 months after closing. CLDN may also received up to a maximum of £9m in contingent consideration. All the cash proceeds will be held on deposit for future investment and the transaction is expected to close in H1 2026.
Biopharma Credit (BPCR LN, Debt – Direct Lending, £1,018.6m mkt capn, 10.8% discount to NAV): has entered into a US$62.5m senior secured loan agreement with Precigen, Inc. The loan will mature in September 2030 and will bear interest at 3-month SOFR plus 6.50 per cent. per annum subject to a 3.75 per cent. SOFR floor.
FTSE Index changes coming
FTSE Russell has confirmed the following changes to effect with start of trading on 22 September, following its quarterly review:
- Biopharma Credit (BPCR LN, Debt – Direct Lending, £1,018.6m mkt capn, 10.8% discount to NAV), Oakley Capital Investments (OCI LN, Private Equity, £958.6m mkt capn, 24.6% discount to NAV)) and Partners Group Private Equity (PEY LN, Private Equity, £715.7m mkt capn, 24.9% discount to NAV) will be added to the FTSE 250 Index
- NextEnergy Solar Fund (NESF LN, Renewable Energy Infrastructure, £381.9m mkt capn, 27.1% discount to NAV) and Polar Capital Global Financials Trust (PCFT LN, Financials & Financial Innovation, £354.2m mkt capn, 5.2% discount to NAV) will be removed from the FTSE 250 Index.
- RTW Biotech Opportunities (RTW LN, Biotechnology & Healthcare, £471.6m mkt capn, 21.9% discount to NAV) will be added to the FTSE SmallCap and FTSE All Share Indices.
- Sector data this week (AIC data, as at Thursday’s close)
Equity Capital Markets
n/a
Ex Dividend
DLN 25.5p, EAT 0.0138p, ESP 0.925p, FGEN 1.99p, HET 3.4p, HMSO 7.94p, UEM 2.325p
Frostrow Investor Relations team – Grant Challis, Neil Winward, Matt Burrows, Matt Norfolk-Clarke, Nicholas Todd
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