Combination with Pacific Assets Trust plc

Schroder Asian Total Retn InvCo PLC

11 June 2026

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, IN ANY MEMBER STATE OF THE EEA OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction in which the same would be unlawful. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 which forms part of domestic law in the United Kingdom pursuant to The European Union Withdrawal Act 2018, as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.

LEI: 549300TQNNGZ0JHO2L78

11 June 2026

Schroder Asian Total Return Investment Company plc

Combination with Pacific Assets Trust plc

Introduction

The board of directors (the "Board") of Schroder Asian Total Return Investment Company plc ("ATR" or the "Company") is pleased to announce that it has agreed heads of terms with the board of Pacific Assets Trust plc ("Pacific Assets") in respect of a proposed combination of the two companies (the "Combination"). The Combination, if approved by the shareholders of both companies, will be implemented pursuant to a scheme of reconstruction and members' voluntary winding up of Pacific Assets under section 110 of the Insolvency Act 1986 (the "Scheme").

Pursuant to the Scheme, Pacific Assets shareholders will be entitled to receive new shares in ATR (the "Rollover Option") and/or to participate in a cash exit, which option will be limited, on an aggregate basis, to 25% of Pacific Assets' issued share capital (excluding treasury shares) and will be offered at a 2% discount (the "Cash Option").

The Scheme will create a combined entity with significant scale, which is expected to deliver cost efficiencies for both ATR and continuing Pacific Assets shareholders. Schroders will continue to invest and manage the portfolio of the enlarged ATR in accordance with ATR's existing investment objective and policy.

Benefits of the Combination

The boards of ATR and Pacific Assets believe that the Combination should provide the following substantial benefits for both ATR and continuing Pacific Assets shareholders:

·    Asia Pacific strategy expertise: Exposure to ATR's award-winning investment strategy managed by Robin Parbrook and King Fuei Lee supported by Schroders' deep resources on the ground in Asia, including 15 portfolio managers and 49 dedicated analysts operating across six offices with total assets under management of approximately £43 billion. Robin and King Fuei have managed ATR since Schroders took over the mandate in 2013 and the underlying Asian Total Return strategy (total AUM of approximately £6.1 billion as at 31 May 2026) since 2007.

·    Long-term performance track record: To 31 May 2026, ATR has delivered annualised net asset value ("Net Asset Value" or "NAV") total returns of 57.2%, 22.1%, 10.9% and 15.0% over the last 1, 3, 5, and 10 years, respectively. This compares to the annualised returns of the MSCI AC Asia Pacific ex Japan Index (Net, GBP) of 51.0%, 21.0%, 8.7% and 11.8% over the same time periods.

·    Robust discount control: The Board of ATR aims to achieve a discount of no wider than 5% in normal market conditions. To 9 June 2026, the 3-month average discount to NAV at which ATR's shares have traded was 3.49%. This compares to a 3-month average discount to NAV of 9.59% for the Pacific Assets shares over the same period. Accordingly, for continuing Pacific Assets shareholders, the Combination should deliver an immediate uplift in the market value of their shareholding (whilst ATR shareholders will continue to benefit from ATR's robust and long-established discount control). In addition, ATR offers a continuation vote at three yearly intervals, with the next vote due to be proposed at its AGM in 2028.

·    Conditional tender offer: Conditional on the Combination completing, ATR will put forward a 15% performance-related tender offer to its shareholders if over the 5-year period from 31 December 2025 to 31 December 2030 ATR's NAV total return does not exceed the total return of the MSCI AC Asia Pacific ex Japan index (ATR's Reference Index).

·    Increased scale, relevance and liquidity: The enlarged ATR is expected to have a pro forma NAV of approximately £1.1 billion, based on the two companies' respective NAVs as at 9 June 2026, and assuming the Cash Option is subscribed in full. With greater scale, it is anticipated that ATR will be attractive to a wider range of investors, who may have been constrained by ownership restrictions, and that the secondary market for its shares will be more liquid.

·    Revised management fee structure: Subject to and with effect from the completion of the Combination, Schroders, the manager of ATR, has agreed to amend its base management fee with respect to the enlarged ATR such that: (i) a new annual management fee tier of 0.50% (applicable in excess of £500 million) will be introduced; and (ii) the basis on which the management fee is calculated will be changed to the lower of market capitalisation and NAV. In addition, the cap on total fees (including the performance fee) payable by ATR to Schroders will be reduced from its current level of 1.25% of ATR's closing NAV per annum to 1.15% of ATR's closing NAV per annum.

·    Lower ongoing charges: Following the Combination, based on the two companies' respective NAVs as at 9 June 2026 and assuming full take up of the Cash Option, it is estimated that the Ongoing Charges Ratio of ATR would drop to 0.65% (excluding performance fees, on an ongoing basis), compared to 0.80% in the financial year to 31 December 2025 and 1.1% for Pacific Assets in the financial year to 31 January 2026.

·    Marketing and promotional resources: Schroders is a leading provider of investment trusts in the UK and currently manages fifteen trusts with total assets under management of approximately £11.5 billion as of 29 May 2026. Schroders promotes ATR across the UK to key investor channels including institutional, wealth and retail. Their sales team, with 30 professionals, provides direct access for professional investors to the ATR investment team. ATR has access to extensive marketing resource: two experienced investment trust marketers are supported by 50+ marketing professionals across a wide range of disciplines. PR is managed by Schroders' in-house team of three dedicated PR specialists, with additional support from the wider Schroders PR team and external agencies.

·    Tax-efficient rollover or cash exit opportunity for Pacific Assets shareholders: As part of the Scheme, shareholders in Pacific Assets will be entitled to elect for cash at a 2% discount, subject to a total limit on the number of Pacific Assets shares that may be elected for the Cash Option of 25% of the Pacific Assets shares in issue (excluding treasury shares) and are expected to be able to roll over their shares on a tax efficient basis into ATR on a Formula Asset Value ("FAV")-for-FAV basis.

·    Schroders cost contribution: Schroders has agreed to make a material contribution to the cost of the transaction (further details below). This is expected to offset the direct transaction costs of the Scheme for existing investors in ATR. Shareholders in Pacific Assets who are deemed to elect for the Rollover Option will also benefit from this contribution which, in conjunction with the aggregate Cash Option discount described below, is expected to offset the direct transaction costs of the Scheme, and help to defray portfolio realignment costs, for Pacific Assets shareholders who are deemed to elect for the Rollover Option.

The Investment Strategy

The Schroders Asian equities philosophy is an active fundamental approach with a focus on companies that grow shareholder value in the long-term. Schroders believes that equity markets are not efficient in Asia and that many of the best investment ideas are not well researched. Thus, to generate alpha over the long-term, the best approach is to focus on bottom-up stock analysis.

In focusing on fundamentals, investments must first be of high quality, which is defined by both the quality of earnings as well the quality of management. Secondly, the investments must exhibit structurally superior return profiles, which are defined as those companies that can earn a higher return on investment capital than their weighted average cost of capital.

Furthermore, given Asian equities are a volatile asset class, ATR's strategy provides a top-down overlay in addition to its bottom-up fundamentals driven stock selection process, through the disciplined use of quantitative models to identify and hedge potential downside risk in markets. Derivatives are used to manage these potential downside risks and volatility inherent in equity market investing, whilst maintaining exposure to the portfolio's capital growth potential.

ATR Historic Returns vs Reference Index to 31 May 2026

	NAV Total Return
	1Y	3Y (p.a.)	5Y (p.a.)	10Y (p.a.)
ATR	57.2	22.1	10.9	15.0
MSCI AC Asia Pac ex Japan (Net, GBP)	51.0	21.0	8.7	11.8

The Investment Manager

As at 31 March 2026, Schroders manages over £814 billion across the Americas, the Asia Pacific region, Europe, the Middle East and Africa, approximately £43 billion of which is managed by the Asia ex Japan investment team. Schroders has had a presence in Asia since 1974.

ATR's investment portfolio is co-managed by Robin Parbrook and King Fuei Lee who have both been involved with managing the strategy since launch. Robin and King Fuei are supported by a comprehensive and highly experienced investment resource. The Asia Pacific ex Japan equities team includes, as at 30 April 2026, 49 research analysts located across six countries, averaging 16 years' investment experience and with an average tenure of 8 years at Schroders.

Robin Parbrook

Robin is Co-head of Asia Equity Alternative Investments and has 35 years' experience, all of which have been spent at Schroders. Robin started his career at Schroders in 1990 as a graduate trainee before moving to Hong Kong in 1992 as an analyst and Asian Fund Manager. Robin moved to Singapore in 2001 as Deputy CIO for the Asia ex Japan region and is currently responsible for managing Schroders' Asian Total Return strategies. Robin is currently based in Hong Kong.

King Fuei Lee

King Fuei is Co-head of Asia Equity Alternative Investments and has 26 years' experience, all of which have been spent at Schroders. King Fuei started his career at Schroders in 1999 and is currently responsible for managing Schroders' Asian Total Return strategies and Schroders' Asian Yield mandates. King Fuei is based in Singapore.

In this announcement, "Schroders" means Schroder Unit Trusts Limited, the Company's manager, and Schroder Investment Management Limited, its investment manager, together with each of their affiliates, or any of them, as the context requires.

Summary of the Scheme

The Combination will be effected by way of a scheme of reconstruction of Pacific Assets under section 110 of the Insolvency Act 1986, resulting in the member's voluntary liquidation of Pacific Assets and the transfer of certain of its assets to ATR in exchange for the issue of new ordinary shares of 5 pence each in the capital of ATR (the "New ATR Shares") to Pacific Assets shareholders who are deemed to elect to receive New ATR Shares in place of their existing shares in Pacific Assets. The number of New ATR Shares issued to Pacific Assets shareholders will be determined on a FAV-for-FAV basis, as outlined below, and which will be set out in greater detail in the Scheme document published by Pacific Assets in due course.

Pursuant to the Scheme, Pacific Assets will be put into liquidation, and its assets and undertaking split notionally into three pools on the basis described below in respect of:

(i)    the interests of Pacific Assets shareholders who roll some or all of their shareholdings in Pacific Assets into ATR under the Rollover Option;

(ii)   the interests of Pacific Assets shareholders who elect to receive some or all of their entitlement upon the winding-up of Pacific Assets in cash under the Cash Option; and

(iii)  a provision sufficient to meet any contingent or unknown liabilities of Pacific Assets following its entry into liquidation, and any outstanding known liabilities of Pacific Assets.

Subject to, and conditional on, the Scheme becoming unconditional and the Combination completing successfully, qualifying Pacific Assets shareholders will (subject to applicable regulatory requirements) be entitled to elect (or may be deemed to elect) to receive in respect of some or all of their Pacific Assets shares:

(i)            New ATR Shares under the Rollover Option; and/or

(ii)           the Cash Option.

Should total elections, including deemed elections, for the Cash Option exceed 25% of Pacific Assets' shares in issue (excluding treasury shares), excess elections for the Cash Option will be scaled back as near as practicable, pari passu and pro rata.

New ATR Shares will be issued as the default option under the Scheme in the event that Pacific Assets shareholders do not make a valid election under the Scheme or only elect for the Cash Option in respect of a proportion of their shares, or to the extent elections for the Cash Option are scaled back as a result of the Cash Option being oversubscribed.

In the event that the Combination is aborted, each party will bear its own costs. 

In accordance with customary practice for such schemes of reconstruction pursuant to section 110 of the Insolvency Act 1986 involving investment companies, the City Code on Takeovers and Mergers is not expected to apply to the proposed Combination via the Scheme. The Scheme will be subject to, inter alia, the approval of both ATR and Pacific Assets shareholders, in addition to regulatory approval and tax clearance.

The Cash Option will be offered at a discount of 2% to the Pacific Assets Residual FAV (the "Cash Option Discount") less the costs of realising the assets allocated to the cash pool. The "Pacific Assets Residual FAV" will be the (cum income) NAV of Pacific Assets on the calculation date to be agreed by both parties (the "Calculation Date"), subject to adjustments to deduct the value of any dividends declared by Pacific Assets but unpaid, to add back the value of the Pacific Assets portfolio realisation costs already incurred or accrued in its NAV, and to deduct the value of the liquidation pool, including Pacific Assets direct transaction costs not already incurred or reflected in its NAV and the liquidator's retention.

The New ATR Shares will be issued on the basis of the ratio between the ATR FAV per share and the Pacific Assets Rollover FAV per share. The "Pacific Assets Rollover FAV" for these purposes will be the Pacific Assets Residual FAV, divided by the Pacific Assets shares in issue (excluding treasury shares), multiplied by the number of Pacific Assets shares that are deemed to have elected for the Rollover Option, less the value of any portfolio realisation costs attributable to the rollover pool, then adding back: (i) the value of the benefit of the aggregate Cash Option Discount; and (ii) the value of the allocation of the Schroders Costs Contribution (see below) until all direct transaction costs and realisation costs attributable to the Pacific Assets Rollover FAV have been offset. The "ATR FAV" will be the (cum income) NAV of ATR on the Calculation Date including any performance fee accrual, adjusted by deducting the value of any dividends declared by ATR but unpaid (if applicable), deducting ATR's direct transaction costs and adding back ATR's allocation of the Schroders Costs Contribution (see below).

The ATR FAV and the Pacific Assets Residual FAV will be calculated for the purposes of the Scheme in accordance with the respective normal accounting policies of the relevant company, taking into account the adjustments outlined above.

More information will be provided in a circular to be published by the Company in relation to the Scheme and the Scheme document to be published by Pacific Assets in due course.

New Management Fee Structure

As part of the Combination, and conditional upon the Scheme being implemented, Schroders and the Board of ATR have agreed to introduce a new base management fee structure for ATR, pursuant to which Schroders will be paid an annual fee for its management services, calculated as follows:

(i)    0.65% per annum up to and including the first £500 million of the lower of the Company's market capitalisation and Net Asset Value; and

(ii)   0.50% per annum of the lower of the Company's market capitalisation and Net Asset Value in excess of £500 million.

This compares to the existing annual management fee structure for ATR of 0.65% per annum on the Company's gross assets, less cash and cash equivalents.

Schroders is also entitled to a performance fee from the Company equal to 10% of any outperformance of the ATR NAV over an annual hurdle of 7%, provided that the NAV per ATR share (i) exceeds the "high water mark" NAV at the date the last performance fee was paid; and (ii) is equal to or greater than the total return of the MSCI AC Asia Pacific ex Japan Index.

As part of the Combination, and conditional upon the Scheme being implemented, Schroders has agreed to make an adjustment to the performance fee payable to it in the financial year in which the Combination completes so as to ensure that Pacific Assets shareholders who choose the Rollover Option do not pay a performance fee in respect of performance they have not received the benefit of.

The sum of the management fee and any performance fee payable by the Company to Schroders in any financial year is currently capped at 1.25% per annum of closing NAV. In connection with the Combination, and conditional upon the Scheme being implemented, Schroders has agreed that the cap on total fees (including the performance fees) payable to Schroders by the enlarged ATR will be reduced from 1.25% to 1.15% per annum of closing NAV.

Schroders Costs Contribution

Schroders has agreed to make a material contribution to the costs of the Combination calculated based on the new base management fee at the incremental rate that would otherwise be payable to it based on the cash, assets and undertaking that are transferred to ATR under the Combination in respect of the period of 15 months following the effective date of the Scheme up to the greater of (i) £2,750,000; and (ii) the notional value of the fee waiver had the 25% Cash Option been fully subscribed (the "Schroders Costs Contribution"). Based on the NAV of Pacific Assets as at 9 June 2026, and assuming full take up of the Cash Option, the value of the Schroders Costs Contribution would be approximately £2.4 million.

The benefit of the Schroders Costs Contribution will be first applied, up to an amount equal to 50% of the total amount of such contribution, to meet ATR's direct transaction costs incurred in connection with the Scheme, with the balance (being an amount equal to at least 50% of the total amount of such contribution), being applied in conjunction with the Cash Discount Benefit to meet Pacific Assets' direct transaction costs incurred in connection with the Scheme and the portfolio realisation costs attributable to the Pacific Assets Rollover FAV. Any amount remaining shall be for the benefit of all shareholders in the enlarged ATR.

The Schroders Costs Contribution is expected to ensure that the direct transaction costs for existing shareholders in ATR in relation to the Combination are offset in their entirety and, in conjunction with the Cash Discount Benefit, to help to defray the total costs of the Combination, including portfolio realignment costs, for Pacific Assets shareholders.

Enlarged Company Board of Directors

Following completion of the Combination, two directors of Pacific Assets will join the board of the enlarged ATR. The ATR board is expected to revert to four directors over the medium-term.

Expected timetable

Documentation in connection with the Scheme will be posted to the shareholders of both companies as soon as practicable, with a view to convening general meetings of ATR and Pacific Assets later in 2026 with the Scheme becoming effective by no later than Q4 2026.

Sarah MacAulay, Chair of Schroder Asian Total Return Investment Company plc, commented:

"'We are delighted to announce a combination with Pacific Assets.  ATR has an outstanding track record of both absolute and relative returns, a rigorous and consistent discount management policy and a competitive management fee.  The proposed combination will provide shareholders with the scale and liquidity that is increasingly desired in the investment trust industry.  The Board believes that the proposed combination is compelling for Pacific Assets, ATR and prospective shareholders and will position ATR for future growth as the pre-eminent Asia Pacific investment company."

Andrew Impey, Chair of Pacific Assets Trust plc, commented:

"After a thorough review of a large number of high-quality proposals as part of the strategic review, we are delighted to be able to announce the combination with ATR. ATR has an impressive record of attractive total returns from a differentiated investment strategy and a track record of strong discount management. We have every confidence that the enlarged company will be a leading Asian equities investment company for existing and future investors."

Unless otherwise noted, all data and performance figures in this announcement are sourced from Morningstar.

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For further information, please contact:

Sarah MacAulay (Chair)
Enquiries through Winterflood

Schroder Investment Management Limited

Katherine Fyfe (Company Secretary)                                                                                     0207 658 3136

Charlotte Banks (Press)                                                                                                            0207 658 9063

John Spedding (Head of Investment Trusts)                                                                         0207 658 3206

Winterflood trading as a division of Marex

Neil Morgan / Rose Ramsden (Corporate Finance)                                                             020 3100 0000

Darren Willis / Innes Urquhart (Corporate Sales)

Important Information

This announcement contains information that is inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended (the Market Abuse Regulation).

The person responsible for arranging for the release of this announcement on behalf of Schroder Asian Total Return Investment Company plc is Katherine Fyfe, Company Secretary. Upon publication, this inside information is in the public domain.

This announcement does not constitute an offer or solicitation to acquire or sell any securities in the Company. This announcement is not for distribution, directly or indirectly, in or into the United States of America, Australia, Canada, Japan, New Zealand, the Republic of South Africa, any member state of the European Economic Area ("EEA") or any other jurisdiction in which its distribution may be unlawful. This announcement is not an offer of securities for sale into the United States or elsewhere. The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended, and investors are not entitled to the benefits of that Act. There has not been and there will be no public offering of the Company's securities in the United States.

The final terms of the Scheme will be detailed in documentation to be published in due course, and those final terms may be different than those described in this announcement. The Scheme will be subject to certain conditions, which if not satisfied or waived, will mean that the Scheme will not proceed.

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The material contained in this announcement is given as at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, any proposals referred to herein are subject to revision and amendment.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance should not be considered a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

Any shareholder action required in connection with the potential transaction will only be set out in documents sent to or made available to ATR and Pacific Assets shareholders and any decision made by such shareholders should be made solely and only on the basis of information provided in those documents

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "might", "will" or "should" or, in each case, their negative or other variations or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding ATR or Pacific Asset's respective financial positions, strategies, plans, proposed acquisitions and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, ATR or Pacific Asset's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. Except to the extent otherwise required by applicable law, neither ATR or Pacific Assets are under any obligation to update any of the forward-looking statements contained in this announcement or any other forward-looking statements they may respectively make

Nothing contained in this announcement constitutes or should be construed as: (i) investment, tax, financial, accounting or legal advice; (ii) a representation that any investment or strategy is suitable or appropriate to individual circumstances; or (iii) a personal recommendation.

Winterflood, a division of Marex, acting through Marex Financial which is authorised in the United Kingdom by Financial Conduct Authority, is acting exclusively for ATR and for no-one else in connection with the Combination, will not regard any other person as it client in relation to the Combination and will not be responsible to anyone other than the ATR for providing the protections afforded to its clients or for providing advice in relation to the Combination, or any of the other matters referred to in this announcement. This does not exclude any responsibilities or liabilities of Marex under the Financial Services and Markets Act 2000, as amended, or the regulatory regime established thereunder.

Neither ATR, Marex, nor any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to any of them, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Each of ATR and Marex, and each of their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

 

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