Contents

1. Overview for the week
2. Frostrow Retail investor Events
3. Investment Themes
4. Sector data for the week

1. Overview for the week

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:

https://www.investormeetcompany.com/frostrow-capital/register-investor

The first quarter is not quite over yet but it is shaping up to be the worst one for three years for the S&P 500 Index, and best for the German DAX Index for 10 years, indicative of rapidly evolving geopolitical and investor shifts. Equity markets have generally been subdued this week with another big rise week for gold and silver and generally treading water ahead of so-called “liberation day” next week. US consumer confidence fell to its lowest level in 12 years, US inflation hit 2.5% (still frustratingly above the 2% target) and tariffs were announced by Trump on cars imported to the US. His mix of being ‘nice’ and ‘not nice’ continues to lead to very high economic uncertainty. Also in the US, we witnessed ‘Signalgate’ – an extreme “fubar” incident, but with at least Mike Waltz holding his hands up as being fully responsible. If Europe were not already on notice about the changing state of US / European relations, they are now. Also in North America, Canada have called snap elections. 

In the UK, Rachel Reeves continued the doom in her Spring Statement and blamed the opposite bench for her inherited position as per the normal robotic script. In theory, as we heard, we are around £500 a year better off in the UK. In reality, the water, energy and council tax rises kick in next week, all about as welcome as JD Vance will be in Greenland. Inflation did come down though from 3% to 2.8% in February which was a Brucey bonus, albeit the OBR believes that inflation will average 3.2% this year before falling next year. UK retail sales slumped in March with British retailers having reported the sharpest drop in sales volumes in 8 months. Ms Reeves had previously announced savings to be made in the civil service of around £2.2bn pa but not enough to stop the OBR downgrading the UK growth forecast for 2025 from 2% to 1% (albeit with marginally higher growth expected from then to 2029). Speculation post the Spring Statement from the IFS followed that there is “a good chance that economic and fiscal forecasts will deteriorate significantly between now and an Autumn Budget.”

At least pleasing then that Rachel Reeves did say that “the government is looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.” So ISA reforms are looking likely in the Autumn Statement. Some more risk appetite would certainly be welcome in the UK equity market, including the investment trust sector. We note an article on the Hargreaves Lansdown website this week that January and February had seen record demand from their clients for purchases of UK Gilts. So very much a continued feeling of risk off still the backdrop for investors.

In the investment trust sector, the market is still cleaning up the demand / supply imbalance. Loads of activity this week announced in regard to this from a Drax bid for Harmony Energy trumping Foresight (HEIT, GRID and GSF all rising strongly in price this week on the back of the news), a Blackstone bid for Warehouse REIT that looks like it may lead somewhere, Achilles ganging up with other like-minded investors to push for discount contraction at Urban Logistics, and much much more. The activity and interest from retail investors, risk off largely buying gilts, and private equity investors, filling their boots with cheap alternative trusts is interesting. If nothing else, it shows us all that the disconnect between private and public markets will ultimately be bridged and the investment trust sector is where you are going to see it all unfold. Be a part of it and stay tuned.

2. Frostrow Retail Investor Events 

Stay tuned for retail investor events via Frostrow Capital clients in the coming editions

Augmentum Fintech (AUGM LN, Financials & Financial Innovation, £144.9m mkt capn, 47.3% discount to NAV)

Aurora UK Alpha (ARR LN, UK All Companies, £268.7m mkt capn, 10.0% discount to NAV)

Biotech Growth Trust (BIOG LN, Biotechnology & Healthcare, £211.0m mkt cap, 9.0% discount to NAV)

CC Japan Income & Growth Trust (CCJI LN, Japan, £251.3m mkt capn, 9.7% discount to NAV)

CQS Natural Resources Growth & Income (CYN LN, Commodities & Natural Resources, £121.3m mkt capn, 8.7% discount to NAV)

Custodian Property Income REIT (CREI LN, Property UK Commercial, £330.6m mkt capn, 23.7% discount to NAV)

Ecofin Global Utilities (EGL LN, Infrastructure Securities, £204.5m mkt capn, 10.7% discount to NAV)

Finsbury Growth & Income Trust (FGT LN, UK Equity Income, £1,282.6.0m mkt capn, 7.5% discount to NAV)

MIGO Opportunities Trust (MIGO LN, Flexible Investment, £66.6m mkt capn, 3.4% discount to NAV)

Mobius Investment Trust (MMIT LN, Global Emerging Markets, £153.5m mkt capn, 5.8% discount to NAV)

Temple Bar Investment Trust (TMPL LN, UK Equity Income, £856.7m mkt capn, 3.4% discount to NAV)

Worldwide Healthcare Trust (WWH LN, Biotechnology & Healthcare, £1,504.5m mkt capn, 11.3% discount to NAV)

Please contact us on ir@frostrow.com

Do not feel ‘guilty’ leaving UK Gilts. Saba, Achilles, PE houses are not stupid. Do not be short of UK listed funds in 2025. Trump is just ‘getting started’, so are we. Now is not the time to sit on the side lines at all or invest along with everyone else. We are taking meetings for 2025 now on behalf of our client list. Call or email us to arrange with you, physical or zoom

3. Further investment themes evident in the investment trust sector this week include:

Discount Control

Oakley Capital Investments (OCI LN, Private Equity, £831.8m mkt capn, 32.0% discount to NAV) has announced an annual recurring share buyback programme of a minimum of £20m and will cancel the dividend in favour of the buyback (will not affect the declared final dividend in respect of the year ended 31 December 2024.). OCI has also made a €500m commitment (£420m) to Oakley Capital VI, which is expected to be deployed over the next five years, bringing OCI’s total commitments to £1.075bn, of which £300m is unlikely to be drawn. OCI had “total liquidity at 31 December 2024 was £225m, comprising £103m of cash and £122m in undrawn credit facility. The company is in advanced discussions to refinance the existing credit facility with one of greater capacity and tenure.”

Crystal Amber Fund (CRS LN, UK Smaller Companies, £83.2m mkt capn, 34.3% discount to NAV): announces that it intends to conduct on-market purchases to buyback the Company's shares under a share buyback programme "up to an aggregate amount of £6 million, but no more than 7,225,770 Ordinary Shares"

Rights and Issues IT (RIII LN, UK Smaller Companies, £88.0m mkt capn, 20.6% discount to NAV): suspends buyback as pulled the resolution from the AGM resolutions. "In light of some opposition to Resolution 10, primarily from a single material shareholder, the Board decided to withdraw the resolution from the business of the meeting. The Board continues to believe that the ability of the Company to repurchase its own shares is fundamental to the Company's discount management policy and notes that the approval of the resolution was recommended by shareholder voting guidance agencies. The Board therefore proposes to consult with shareholders to address any concerns that have influenced their voting. Following these consultations, a general meeting will be convened to seek shareholder approval of a new share buyback authority. Subject to shareholder approval of that resolution the Board will establish a new share buyback programme."

Downing Renewables & Infrastructure (DORE LN, Renewable Energy Infrastructure, £135.2m mkt capn, 31.9% discount to NAV) FY2024 results to 31 December 2024: NAV TR +3.8% to 116.7pps; 5.8pps FY dividend 1.2x covered and FY2025 dividend target of 5.95pps (+2.6%); lowered leverage from 40% to 37% using divestment proceeds "to repay fully £26.7 million drawn debt under the RCF." "Continued the buyback programme, purchasing 8.9 million ordinary shares (£7.1 million) during the year at an average price of 80.2 pence creating further value and increasing NAV per ordinary share by 1.8 pps. In line with the peer group, the shares traded at a discount during the year, however DORE continues to provide additional market liquidity to help mitigate discount volatility."

International Public Partnerships (INPP LN, Infrastructure, £2,040.1m mkt capn, 25.6% discount to NAV) FY2024 results to 31 December 2024: NAV -5.2% over the year to 144.7pps, “primarily driven by an increase in discount rates, reflecting the sharp rise in underlying government bond yields during the period,” with the weighted average discount rate no 9%. 4.19pps H2 2024 dividend declared bringing FY2024 dividend to 8.36pps and targeting 2.5% dividend growth for 2025 and 2026, with dividends to be paid quarterly from June 2025. IMA to be amended with effect from 1 July 2025 such that the base fee payable will be 50:50 market cap and NAV and INPP’s ROFR will be ended. “The Board intends to increase the quantum of capital being returned to shareholders from the current programme of up to £60m, to a programme of up to £200m, over the period to 31 March 2026.”

VinaCapital Vietnam Opportunity (VOF LN, Country Specialist, £597.1m mkt capn, 24.7% discount to NAV) H1 results to 31 December 2024: NAV TR £ +4.8% vs BM +2.7%. Pay out dividends of 1% of NAV twice per annum. "The Board uses share buybacks as the principal tool for managing the discount and, as the discount widened, the Board stepped up the buybacks to provide liquidity to selling shareholders and to minimise the volatility. Over the six months to 31 December 2024, approximately 8.6 million shares were bought back, which was 5.7% of the shares in issue at the start of the period at a cost of USD50.9 million. The discounts at which shares were bought back resulted in an increase in the NAV of some 10.6 cents per share to the benefit of continuing shareholders. Since the period end, and up to 20 March 2025 the Company has spent a further USD24.4 million buying back shares in the market. The buybacks have not reduced the discount, but they have maintained liquidity in the market."

Montanaro European Smaller Companies Trust value-enhancing initiatives (MTE LN, European Smaller Companies, £274.4m mkt capn, 7.5% discount to NAV): Board announces tender offers twice per year or up to 5% of share capital to allow investors to tender shares at a 5% discount (reflecting the wider spreads amongst smaller companies and the cost associated with the exercise). Board also announces a "more active share buy back policy to reduce discount volatility. The Board also conducted a thorough review of costs and "expects the ongoing charges figure to remain below 1% in the future." "The Board has negotiated a further reduction in the management fee (the second in four years). However, it continues to recognise the significant resource intensity of Montanaro's extremely thorough and detailed research-based investment process. The Manager has agreed to a reduction in management fees from 0.90% p.a. to 0.825% p.a. of the market capitalisation of the Company up to £500 million; from 0.75% to 0.70% p.a. between £500 - £750 million; and (unchanged) 0.65% p.a. above £750 million. These reductions in fees will take effect from 1 April 2025."

Pantheon International (PIN LN, Private Equity, £1,383.9m mkt capn, 40.9% discount to NAV) NAV as at 28 February 2025: -1.1% over the month to 503.6pps, driven by FX. “6% of reported valuations are dated 28 February 2025 or later, 38% are dated 31 December 2024, 54% are dated 30 September 2024 and 2% are dated 30 June 2024.” During the month, PIN “received distributions of £16.7m relative to £3.1m of calls.” “The Board has exercised its discretion and opted to allocate £35.0m to share buybacks, to be deployed by 31 May 2025. This brings the aggregate share buyback allocation for the financial YTD to £50m.”

Baillie Gifford Japan Trust HY results to 28 February 2025 (BGFD LN, Japan, £610.6m mkt capn, 13.0% discount to NAV): NAV TR +1.5% vs TOPIX Index TR (£) +0.9%; share price TR 1.5%; During the period the Company bought back 6,395,000 shares representing 7.3% of the issued share capital as at 31 August 2024. "Artificial Intelligence ('AI') continues to advance at a rapid rate with developments in the capabilities of the most advanced models, in the hardware used to run them, and in lowering costs." "With much changing in the world we believe that investors in Japan will be well-served by sticking to the core investment principle of focusing on companies with sound prospects for sales and earnings growth."

M&A

Warehouse REIT (WHR LN, Property UK Logistics, £463.1m mkt capn, 14.3% discount to NAV) has received a final indicative all cash bid from Blackstone Europe LLP for its entire issued and to be issued share capital at 115pps, inclusive of the third interim dividend of 1.6pps declared on 19 February 2025. “Sixth Street Partners [has confirmed] it does not intend to make an offer for Warehouse REIT.” Separately, WHR has refinanced its existing term loan and RCF totalling £300m, delivering cost savings of £1.2m pa. WHR also announces "that it has successfully completed a refinancing of its existing term loan and revolving credit facility ("RCF") totalling £300 million. The margin of 1.75% is 45 basis points below the previous margin, delivering cost savings of £1.2 million for the Company on an annualised basis (based on the current drawn balance)." WHR Board subsequently announced that having “carefully considered the Final Indicative Proposal [from Blackstone at 115pps] with its advisers and consulted with the company's major shareholders extensively… [and] has indicated to Blackstone that, should a firm offer be made on the financial terms set out above, it would be minded to recommend such an offer to Warehouse REIT shareholders.” “The Board has decided to engage in discussions with Blackstone in relation to these terms and to allow Blackstone to complete a limited period of confirmatory due diligence.”

Drax Group (DRX LN, £2,160m mkt capn) has agreed terms with the Board of Harmony Energy Income Trust (HEIT LN, Renewable Energy Infrastructure, £200.3m mkt capn, 4.5% discount to NAV) on a recommended cash acquisition of HEIT for 88pps. Drax Bidco has received irrevocable undertakings from shareholders of HEIT in respect of a total of 44,549,750 shares (19.6% of ISC). Is a 5% premium to the Foresight offer

LondonMetric Property (LMP LN, £3,720m mkt capn) has reached agreement with Highcroft on a recommended all-share offer, pursuant to which LMP will acquire the entire issued and to be issued share capital of Highcroft with Highcroft shareholders receiving 4.65 new LMP shares for each share held. The acquisition will be earnings accretive for the combined group

BBGI Global Infrastructure (BBGI LN, Infrastructure, £1,000.8m mkt capn, 3.8% discount to NAV) FY2024 results to 31 December 2024: NAV TR +2.1%. "BBGI's ability to invest in new opportunities remained constrained by its share price trading at a discount to NAV and the continued disconnect between public and private markets." Recommended cash offer post-period: “The Offer from BCI presents an opportunity for shareholders to realise in cash the value of their holdings at a level that may not be achievable in the medium term under current market conditions.”

Orderly realization / wind down news

Menhaden Resource Efficiency (MHN LN, Environmental, £120.6m mkt capn): general meeting voted to put the Company into liquidation. Derek Hyslop and Richard Barker of Ernst & Young LLP appointed as joint liquidators. Trading in the shares is suspended. "t is expected that the Liquidators will make the Initial Distribution to Shareholders, via the Company's Registrar, using the proceeds of the realisation of the Company's listed investments, less the costs of the Members' Voluntary Liquidation, any amounts required to honour unfunded contractual commitments in relation to the unquoted investments and the amount attributable to the Liquidators' Retention Fund during the week commencing 26 May 2025. Subject to progress, it is possible that the Initial Distribution may also include the realisation proceeds of one or more of the Company's unquoted investments. Any net proceeds from the disposal of the unquoted investments during the liquidation period will be returned to Shareholders in due course. However, there can be no guarantee as to the value and/or timing of distribution(s) that may result from the realisation of the Company's unquoted investments." (Frostrow client)

Schroders Capital Global Innovation (INOV LN, Growth Capital, £99.0m mkt capn, 39.2% discount to NAV) FY2024 results to 31 December 2024: NAV TR -21.2%... “Following shareholders voting in favour of the discontinuation resolution to provide for the managed wind-down of the company, the Board's 2025 strategic focus has changed to undertake a managed wind-down of the company and realise all existing assets in the portfolio in an orderly manner.”

Saba update

Middlefield Canadian Income FY results to 31 December 2024 (MCT LN, North America, £128.8m mkt capn, 8.1% discount to NAV): NAV TR +15.1% vs S&P/TSX Composite High Dividend Index +7.6%; share price TR +20.6%; received a requisition notice on 10 February 2025 from Saba Capital. "Following consultation with a number of the Fund’s largest shareholders including Saba, and following constructive discussions with Saba, on 21 February 2025 the Fund announced that Saba had agreed to withdraw its requisition notice for a period of 60 days to enable the Fund and its advisers to formulate proposals that are in the best interests of all shareholders. At the current time, the Board is in the process of considering a number of strategic options in the best interests of shareholders as a whole. A further announcement regarding future proposals which the Fund may put to shareholders will be made in due course."

Herald Investment Trust (HRI LN, Global Smaller Companies, £1,024.4m mkt capn, 11.1% discount to NAV): passed its continuation vote. Excluding Saba, more than 99.9% of votes were cast in favour of continuation. Turnout was still a high 69.1%

CQS Natural Resources Growth & Income (CYN LN, Commodities & Natural Resources, £121.3m mkt capn, 8.7% discount to NAV) H1 results to 31 December 2024: NAV TR -7.5% vs MSCI World Metals and Mining Index £ -9.3%. Share price TR +0.4%; "On 12 February 2025, the Company announced the receipt of a requisition served on behalf of Saba for a second general meeting of shareholders. Since then, the Board has engaged in a series of constructive discussions with Saba, who have agreed to withdraw the requisition to enable the Board and its advisers to complete the strategic review that was outlined in the Circular to shareholders" The Board is progressing with its strategic review, the result of which will be announced during April 2025." The current total shareholdings of the Board are valued at over £80,000 and, further, the collective shareholdings of the Company's investment management team (and of the persons closely associated with them) are valued at over £225,000."

Achilles update

Achilles Investment Company (AIC LN, £55.9m mkt capn) has, alongside Waverton, TR Property Investment Trust (TRY LN) and Harwood Capital (representing 8.8% of share capital) announced it intends to serve a requisition on the Urban Logistics REIT (SHED LN, Property UK Logistics, £600.0m mkt capn, 18.9% discount to NAV) to convene an EGM to remove Chair Nigel Rich, NED Heather Hancock and Richard Moffit, Director from the Board and appoint Robert Naylor as Non-Executive Chairman, and Sanjeta Shah NED and SID with immediate effect. “If appointed, the requisitioning investors expect the new directors to collaborate with the remaining Board members to conduct a strategic review aimed at maximising shareholder value.”

Urban Logistics (SHED LN, Property UK Logistics, £616.7m mkt capn, 16.7% discount to NAV): confirmed receipt of a letter from Harwood (Achilles) and others. "The Board continues to make good progress in its dialogue with shareholders on internalisation and is in receipt of a number of constructive suggestions from shareholders on changes to the internalisation proposal. With the benefit of this detailed feedback, the Board will move as quickly as possible to finalise a proposal regarding internalisation which will take account of the constructive suggestions received from shareholders and can be put to shareholders in general meeting." Update to follow. The Company announced subsequently the acquisition of two assets for £21.1m.

Achilles Investment Company (AIC LN, £55.9m mkt capn) further noted recent announcements from Urban Logistics REIT (SHED LN) and reiterated its belief that (for example) the SHED Board’s “belated recognition of the excessive price proposed for the buyout of the management contract only reinforces our belief that the Board are too closely aligned with the investment management.” “Should the requisitioning investors succeed, the expectation is clear: the new directors will work constructively and collaborate with the remaining Board members to conduct a thorough strategic review focused on enhancing shareholder value. Such that, if a third party approaches the Board with a proposal, Sangita Shah and Robert Naylor, if elected, will ensure it is presented to shareholders in a timely manner, prioritising the interests of the Company's owners over those of the investment manager.”

Continuation

Biopharma Credit FY results to 31 December 2024 (BPCR LN, Debt Direct Lending, £996.6m mkt capn, 11.1% discount to NAV): DPS 10.18cps (net income generated of 9.99cps). $994.1m committed into seven new transactions. Repayments of $750.2m. "During 2024, the DCM was triggered, and the Company was required to use its capital to repurchase shares. The Company repurchased 116,622,535 shares, which is 8.5 per cent. of the total shares of the Company, at an average share price of 91 cents. and a total cost of $106.7 million narrowing the discount to NAV from 18 per cent. to 11 per cent." "The Investment Manager reports a growing pipeline of investment opportunities as new products and companies enter the market in 2025 and beyond." Continuation vote 9 June 2025 (and every three years)

Schroder UK Mid Cap Fund (SCP LN, UK All Companies, £202.6m mkt capn, 8.6% discount to NAV): announced some strategic initiatives. The Board has agreed a management fee reduction (currently 0.65% of net assets up to £250m and 0.6% above £250m. "With effect from 1 April 2025, the reduced management fee will be calculated based on the lower of (1) 0.60% per annum of market capitalisation; and (2) the current net asset value-based fee arrangement.") Continuation vote to be held at the AGM in 2028 and every three years thereafter "to ensure that the Company remains relevant to its Shareholders and in-line with best corporate governance practice." "The Board intends to use its authority to buy back shares more actively in order to inhibit a wide discount to NAV from developing in the Company's shares in the future."

Fidelity Japan Trust FY results to 31 December 2024 (FJT LN, Japan, £196.7m mkt capn, 11.5% discount to NAV): NAV TR -1.8% vs TOPIX Total Return Index £ +10.0%; share price TR -5.7%; "...the decision to be overweight in small and mid-cap growth companies, where research is rewarded and where Nicholas and the highly experienced Fidelity team have historically found many of the best opportunities, contributed significantly to the underperformance." "The Board has recently been notified that the Portfolio Manager, Nicholas Price, plans to retire at the end of this calendar year after a 30 year career with Fidelity in Japan. His Assistant Portfolio Manager, Ying Lu, will become the Company’s Portfolio Manager with effect from 1 October 2025. Nicholas will continue to work with Ying until the end of the year. Ying has been working closely with Nicholas for the past three years and so we do not expect any change in the approach to the investment management of the Company." "Notwithstanding our strong backing for Nicholas and the Fidelity team, we recognise that continued underperformance would be unacceptable to our shareholders. Accordingly, linked to the vote for the continuation of the Company at the forthcoming AGM, we are proposing an unconditional tender offer of 100% of the Company’s issued share capital (excluding shares held in Treasury) following the three years to 31 December 2027. The tender will be at a price close to NAV."

JPMorgan US Smaller Companies FY results to 31 December 2024 (JUSC LN, North American Smaller Companies, £245.8m mkt capn, 6.5% discount to NAV): NAV TR +11.3% vs Russell 2000 Index +13.3%; share price TR +18.7%; gearing maintained at 7.7%; "During the year, the Company repurchased 3,047,895 shares into Treasury, equivalent to 4.66% of the shares in issue, at an average discount of 11.5%. This was part of the Company's active share buyback program aimed at enhancing shareholder value and managing the discount to net asset value." Continuation vote at the AGM (and next in 2030). "The Board believes strongly in the case for long-term investment in US smaller companies through an investment trust. "

Change to allocation of expenses

Fidelity Asian Values (FAS LN, Asia Pacific Smaller Companies, £346.0m mkt capn, 9.0% discount to NAV) H1 results to 31 January 2025: NAV TR +3.2% vs MSCI All Countries Asia ex Japan Small Cap Index -2.1%. Share price TR +4.1%; Overweight China, underweight India; "The Portfolio Managers continue to believe innovation and technological excellence in China offer opportunities to investors." Board elected to charge 75% of the base investment management fees and finance costs to capital and 25% to revenue with effect from 1 August 2024. The Board believes that this allocation better reflects the Company’s focus on capital growth to generate returns. Previously, these costs were charged in their entirety to revenue.

Debt reduction / refinance / rating

Regional REIT FY results to 31 December 2024 (RGL LN, Property UK Commercial, £176.4m mkt capn, 50.9% discount to NAV): Portfolio value -8.2% vs MSCI Rest of UK Offices Index - 8.9%; "Throughout the year, the Board remained committed to delivering consistent quarterly dividend distributions to our shareholders, ensuring full compliance with the HMRC REIT guidelines and maintaining a covered annual dividend". "There is a lot of work to do and the Board remains committed to reducing LTV while progressing opportunities across the portfolio to generate sustainable, long-term value for shareholders." "We are beginning to see an improvement in sentiment in the UK office market, with the average number of days in the office having stabilised at four days a week. There is also a growing recognition of the vital role the office plays in driving productivity and strengthening a company's culture."

Potential change to UK investment trust regime

The Schiehallion Fund (MNTN LN, Growth Capital, £922.3m mkt capn, 32.1% discount to NAV) FY2024 results to 31 January 2025:NAV TR +12.9% with discount contracting from 39.6% to 19.2%. “Performance driven by a combination of valuation increases in private holdings and positive share price movements among selected public holdings,” particularly SpaceX (+86% valuation increase). MNTN “continue[s] to balance three capital deployment options, namely initiating new investments, making further investments into the existing portfolio, and conducting share buybacks.” "As the Company enters into its sixth year since its initial public offering ('IPO'), the Board continually reviews its trading segment and domicile in order to ensure that both remain appropriate to deliver shareholder value. After carefully reviewing the Company's global portfolio, including having taken initial professional tax advice, the Board intends to seek further legal and tax advice on potentially becoming UK tax resident and joining the UK's investment trust regime. The Board will provide further updates to shareholders in due course, including seeking any necessary approvals."

Shareholder consultation

The Renewables Infrastructure Group (TRIG LN, Renewable Energy Infrastructure, £1,824.7m mkt capn, 37.3% discount to NAV) has, following “extensive consultation with a broad range of shareholders,” updated the IMA so that the annual management fee will now be based on 50% market capitalisation and 50% published NAV. “The previously proposed takeover and transaction fees will not be introduced. The notice period under both the IMA and OMA will remain 12 months.” The company also intends to put forward a continuation vote (as an ordinary resolution) at the AGM in June 2026 and in any future year if the shares have traded at an average discount >10% in the preceding financial year.

BH Macro (BHMG/U LN, Hedge Funds, £1,253.1m / $102.8m mkt capn, 9.2% / 10.0% discount to NAV) FY2024 results to 31 December 2024: NAV TR +5.9% (£) / +4.9% ($). "...continued with a substantial buyback programme throughout the year, spending some £116 million in the face of persistent selling." “The Board is very conscious that… a modest discount above 5% remains unsatisfactory for the company over a long-term horizon...The additional volatility created by moving from premia to discounts for the share price undermines one of the key virtues of the Master Fund. We continue to maintain close dialogue with all our major Shareholders to encourage any substantial sales to be coordinated with the Board and our broker, to ensure the most efficient management of the relationship between NAV per share and share price.”

Enhanced dividend

Abrdn Asian Income Fund FY results to 31 December 2024 (AAIF LN, Asia Pacific Equity Income, £314.4m mkt capn, 10.1% discount to NAV): NAV TR +10.8% vs MSCI AC Asia Pacific ex Japan Index TR +12.6%; share price TR +12.0%; net gearing 7.2% (7.5% 2023); OCR 0.85% (1.0% 2023 - benefiting from lower management fee); DPS 14.43p (+22.8% - since the year end we have announced that the Company's dividend will in the future be set at 1.5625% per quarter of the NAV. The first dividend payment to be made under the enhanced policy will be in May 2025, for the quarter ended 31 March 2025. "The Company bought back £36 million worth of shares during the year to be held in treasury, representing 10.1% of the shares in issue at the start of the period, at an average discount of 12.4% and providing an estimated enhancement of 1.2% to the NAV per share. Subsequent to the year end the Company has bought back a further £8.7 million worth of shares."

CT Private Equity FY results to 31 December 2024 (CTPE LN, Private Equity, £332.5m mkt capn, 31.6% discount to NAV): NAV TR +4.6%; share price TR +10.9%; dividends of 28.04pps paid quarterly (dividend yield 5.7% on share price - "The Company's innovative dividend policy was introduced in 2012 and remains the cornerstone of the Company's capital allocation strategy. The Company pays a substantial dividend from realised profits allowing Shareholders to participate, to some degree, directly in the proceeds of the steady stream of private equity realisations which the Company achieves. Since 1 January 2013 the Company has returned £146 million of dividends to Shareholders. This represents a ten-year compound annual growth rate of 10.0 per cent. This policy provides for a steadily growing dividend with downside protection. Your Board is fully committed to maintaining this approach for the foreseeable future."); "Approximately 91 per cent of the valuation by value is based on 31 December 2024 valuations and 9 per cent on September 2024 valuations." "The Board regularly reviews the Company's capital allocation and seeks to balance the benefits of an immediate enhancement to NAV from share buybacks against the anticipated longer-term returns from new investment." "During the year ended 31 December 2024 the Company bought back, to be held in treasury, a total of 1.25 million shares. This equated to 1.7% of the shares in issue, excluding those held in treasury, at 31 December 2023."

Results / updates

Vietnam Holdings HY results to 31 December 2024 (VNH LN, Country Specialist, £88.1m mkt capn, 4.9% discount to NAV): NAV TR +1.9% vs Vietnam All Share Index +1.6% (US$ figures); share price TR +1.2%; 12% of the Company's shares redeemed in the opportunity in the period. "The share price now closely reflects the true value of the Fund's assets, and for the first time in over a decade, during periods in which the Fund has traded at a premium to NAV, the Fund has been able to issue new shares."

Social Housing REIT (SOHO LN, Property UK Residential, £250.4m mkt capn, 44.1% discount to NAV) FY results to 31 December 2024: EPRA NTA -8.1% to 99.05pps; adjusted EPS 5.4p vs DPS 5.46p.

New Star Investment Trust (NSI LN, Flexible Investment, £77.4m mkt capn, 35.6% discount to NAV) H1 results to 31 December 2024: NAV TR +0.4% vs MSCI UK Index +1.64%. "£17 million was returned to shareholders in August by way of a “B” share issue and a subsequent redemption of the shares at a price of 24p per B share." "At the annual general meeting on 5th December 2024, shareholders approved the proposal by your Board to change the investment objective from long-term capital growth to long-term total return through capital growth and income."

JPMorgan UK Small Cap Growth & Income HY results to 31 January 2025 (JUGI LN, UK Smaller Companies, £379.6m mkt capn, 11.7% discount to NAV): NAV TR -7.0% vs Numis Smaller Companies plus AIM Index -3.9%; Share price TR -15.6%; Following the Combination with JPMorgan Mid Cap Investment Trust plc in February 2024, the Company introduced an enhanced dividend policy targeting a 4% yield on NAV per annum, with dividends paid quarterly. Gearing level 9.5%; "It is difficult to remember a time when sentiment was so indiscriminately negative towards UK smaller companies as well as to investment trusts and, as such, the Company has been in the firing line." "During the six months to 31st January 2025, the Company repurchased 2,550,000 shares into Treasury (equivalent to 1.9% of the shares in issue) at an average discount of 11.0%. The Company did not issue any shares. As at 21st March 2025, despite buying back shares, the issued share capital (excluding Treasury shares) is 70% greater than before the Combination with JPMorgan Mid Cap Investment Trust plc ('JMF') in February 2024, giving us increased flexibility to support the share price."

Octopus Renewables Infrastructure (ORIT LN, Renewable Energy Infrastructure, £353.5m mkt capn, 37.6% discount to NAV) FY2024 results to 31 December 2024: NAV TR +2.5% to 102.6pps. "RCF maturity extended to June 2028 and size reduced from £270.8m to £150m, saving c.£850k p.a, plus new five year £100m facility reducing all-in borrowing rate from 6.5% to 5.25%. " "Commitment to assess the existing portfolio and investment strategy and conduct a review of current fee arrangements." " the Board is working closely with the Investment Manager to optimise existing assets and identify opportunities aligned with the Company's investment objective to generate further growth, whilst also maintaining a progressive fully covered dividend. Furthermore, the Board and executive team will continue to talk and listen to our shareholders with a view to fully understanding their perspectives. We are resolute in doing what we can to shift the perception of your Company in the market and will take the necessary action that we believe is in the best interests of shareholders." Dividend target for 2025 previously announced as 6.17pps (+2.5% 2023)

M&G Credit Income (MGCI LN, Debt Loans & Bonds, £155.0m mkt capn, 1.9% premium to NAV) FY2025 results to 31 December 2024: NAV TR +8.1% vs ICE BofA Sterling Corporate and Collateralised Index (+1.87%) and the ICE BofA 1-3 Year BBB Sterling Corporate & Collateralized Index (+5.69%), whilst marginally underperforming the ICE BofA European Currency Non-Financial High Yield 2% Constrained Index (+8.74%). Portfolio was 52% invested in private assets and 9% in illiquid public assets. Company operates a 'zero discount policy' and resold shares held in treasury plus "issued a further 2,450,000 new shares at a small premium to NAV during the year". "The technical backdrop in fixed income markets remains firm, with the amount of capital seeking to take advantage of historically high corporate bond yields, still exceeding supply. This is keeping sterling credit spreads anchored at multi-year lows."

Alignment of interest

Cordiant Digital Infrastructure (CORD LN, Infrastructure, £663.1m mkt capn, 30.4% discount to NAV) Q3 trading update for period ending 31 December 2024: “aggregate portfolio company EBITDA for the nine months to 31 December 2024 increased by 13.6% to £115.6m… driven by contributions from contract wins, recent bolt-on acquisitions, cost control and the beneficial effects of contractual and other price escalators on revenue.” FY target dividend “is 4.8x covered by EBITDA and 1.8x covered by free cash flow.” GAV of 37.8%. Further acquisitions of shares such that "Steven Marshall, the Investment Manager and employees of the Investment Manager now in total own 2.0% of the Company's ordinary shares as at the date of this trading update"

Tufton Assets (SHIP LN, Leasing, £306.2m mkt capn, 28.0% discount to NAV) has noted its manager Tufton Investment Management has completed a “management-led buyout of all the equity interests in the Investment Manager previously held by a European Family Office.” "This carefully planned buyout has greatly increased the ownership stake of, and control by, senior management in line with the leadership strategy developed over the past few years...The Board is reassured that there will be no changes to the team currently providing services to the Company and that service levels will be unaffected by the transaction. It views positively the fact that the Investment Manager will be fully independently managed and will continue to operate under its current brand and with the same team."

Internalisation

Supermarket Income REIT (SUPR LN, Property UK Commercial, £935.9m mkt capn, 15.6% discount to NAV) has completed its internalisation and, accordingly, Rob Abraham and Mike Perkins have been appointed as CEO and CFO respectively, with both joining the Board with immediate effect.”

Management team change

STS Global Income & Growth (STS LN, Global Equity Income, £291.0m mkt capn, 1.2% discount to NAV): Tomasz Boniek to become co-manager of the trust alongside James Harries from 1 May 2025.

Acquisition / Disposal / Lease updates

SEGRO plc (SGRO LN, £9,310m mkt capn) has formed a JV with “Pure Data Centres Group Limited, owned by Oaktree, to create its first fully fitted data centre, which it expects to pre-lease to a hyperscaler.” The JV will “develop a 56MW data centre in Park Royal, within a core London Availability Zone that has limited competing supply of land and power [with] gross capital investment anticipated to be £1bn (of which SEGRO's cash equity contribution will be £150m) and is expected to deliver a 9% to 10% net yield on cost.”

HgCapital Trust (HGT LN, Private Equity, £2,325.3m mkt capn, 6.2% discount to NAV) announced a further investment of approx. £124m in IFS, a provider of cloud enterprise software and Industrial AI applications, alongside other clients of Hg. HGT’s “pro-forma liquid resources available for future deployment are estimated to be £329m (13% of the pro-forma 28 February 2025 NAV of £2.5bn).”

Sirius Real Estate (SRE LN, £1,290m mkt capn) has acquired “a multi-tenanted business park in Mönchengladbach for €17.21m (total acquisition costs), representing an 8.21% NIY… [and also sold] its BizSpace Cardiff site for £5.075m, representing a 10% premium to current book value.”

DP Aircraft I (DPA LN, Leasing, £21.8m mkt capn, 54.7% discount to NAV) agreed two new 12-year lease agreements with LOT Polish Airlines for its two Boeing 787-8 aircraft, previously leased to Thai Airways. Under the new leases, “lease rental payments are structured over the 12-year term, with a fixed monthly rate for the first eight years, followed by a reduced fixed monthly rate for the final four years, providing rental payments of approximately $168m in aggregate over the full term.” These aircraft are currently valued “on a lease-unencumbered basis. The independent valuation process for the annual results to 31 December 2024 is ongoing, and the Board plans to provide further insight into the potential impact of the new lease arrangements in the annual report.”

4. Sector data this week (AIC data, as at Thursday's close)




Equity Capital Markets

EJF Investments (EJFI LN, Debt Structured Finance, £76.1m mkt capn, 24.0% discount to NAV): considering an issue of new ZDPs to refinance those maturing in 2025. "The Board's current preferred refinancing option is to move forward with an issuance of up to 28 million new 2029 Zero Dividend Preference Shares. The 2029 ZDP shares would be issued at a price of 100 pence per ZDP share, have a term of approximately 4.75 years, a gross redemption yield of 8.50 per cent. and a cover ratio of at least 3.0x. Company subsequently announced its FY results to 31 December 2024.

Ex Dividend

BERI 1.125p, DUKE 0.70p, ESP 1.075p, FEV 5.50p, PHP 1.775p, PINT 2.10p, SJG 2.89p, SOHO 1.365p, UTL 2p, VIP 3.40p

The markets will likely get a little more clarity next week when we get to “liberation day” – in theory at least.
Keep riding through the noise and don’t forget to change the clocks.

Frostrow Investor Relations team – Grant Challis, Neil Winward, Matt Burrows, Matt Norfolk-Clarke, Nicholas Todd

Regards 

Frostrow Capital LLP

Frostrow Capital LLP,
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London WC2A 1AL
020 3008 4912

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