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

The week started off with another ‘sell America’ trade example coming on Monday (when the UK was closed) coming post Trump bashing Fed Chair Powell as “Mr Too Late, a major loser” and pushing China on tariff talks. Sentiment started to improve after Trump, likely under the guidance of Scott Bessent, began to soften the tone and stance. Trump commented that he will be “nice” to China in trade talks and Bessent described the US / China trade war as ‘unsustainable’. That positive sentiment continued as the week progressed with some decent reporting from the ‘Magnificent 7’ helping also. Later in the week China have tried to re-clarify the tariff rhetoric by saying that there will be no trade talks unless the tariffs are cancelled. UK Chancellor Rachel Reeves also headed over to the US to try to push for a UK / US trade deal but she seems in no hurry, probably sensibly, at this time. Who knows, in the weeks to come, if she gets the UK a decent deal, she could become our modern-day hero, like good old St George.

Also in the week, the IMF put out some revisions to growth forecasts across the world. US growth was revised down from 2.7% to 1.8%. The UK did not escape either with the UK's growth forecast slashed by a third, predicting the UK economy will be hit hard by the "extremely high levels of policy uncertainty." So all in all, it has been another roller coaster week with the press at the start of the week pointing to the potential for April to be one of the worst months in US equity markets since 1932. However, at the time of writing, the S&P 500 Index is up 3.9% this week, the second-best week of the year so far, and the FTSE All Share Index has closed up 1.7%. In short, who knows what next week brings but we will be watching.

In the investment trust sector, Bellevue Healthcare have announced the introduction of a zero-discount policy to protect investors from trading at a material discount to NAV. Supermarket Income REIT has entered into a JV in order to help get the debt burden down and Gresham House Energy Storage is “progressing a transaction to validate NAV and to improve liquidity”. The proposed new Zeros issue at Chelverton was pulled sadly due to lack of demand, but that has not stopped EJF Investments exploring the same route. At Frostrow, Augmentum Fintech have published their latest factsheet highlighting the UK Government and FCA’s support for the fintech sector. Nick Train continues to quietly purchase shares in Finsbury Growth & Income aligning himself as manager with his shareholders. At Temple Bar Investment Trust, there was a quarterly update entitled “Reflections on current market volatility”, as well as a podcast based on that for those who prefer to listen, and the Chairman, Richard Wyatt, a very senior City figure, gives a very good account of the fund and the London equity market. Finally, Jean-Hugues de laMaze, manager of Ecofin Utilities and Infrastructure Trust, gave a very interesting account of the long term and significantly predictable cash flows available from investing in global utilities and infrastructure sectors. Details available for retail investors are available on the websites or below. 

2. Frostrow Retail investor events

Augmentum Fintech (AUGM LN, Financials & Financial Innovation, £133.2m mkt capn, 51.5% discount to NAV)

Aurora UK Alpha (ARR LN, UK All Companies, £271.5m mkt capn, 9.7% discount to NAV)

Biotech Growth Trust (BIOG LN, Biotechnology & Healthcare, £197.8m mkt cap, 8.0% discount to NAV)

CC Japan Income & Growth Trust (CCJI LN, Japan, £243.2m mkt capn, 8.0% discount to NAV)

CQS Natural Resources Growth & Income (CYN LN, Commodities & Natural Resources, £120.3m mkt capn, 8.6% discount to NAV)

Custodian Property Income REIT (CREI LN, Property UK Commercial, £334.2m mkt capn, 22.0% discount to NAV)

Ecofin Global Utilities (EGL LN, Infrastructure Securities, £206.6m mkt capn, 11.6% discount to NAV)

Finsbury Growth & Income Trust (FGT LN, UK Equity Income, £1,282.3m mkt capn, 6.9% discount to NAV):

There is also a good “insider interview” from Interactive Investor as Nick explains the “generational” opportunity to buy UK growth firms

https://www.ii.co.uk/analysis-commentary/nick-train-generational-opportunity-buy-uk-growth-firms-ii534473

MIGO Opportunities Trust (MIGO LN, Flexible Investment, £62.5m mkt capn, 4.6% discount to NAV)

Mobius Investment Trust (MMIT LN, Global Emerging Markets, £142.5m mkt capn, 7.1% discount to NAV)

Temple Bar Investment Trust (TMPL LN, UK Equity Income, £829.6m mkt capn, 2.6% discount to NAV):  note the AGM invitation also at 11:30am on 6 May at Barber-Surgeon’s Hall, Wood Street, London EC2Y 5BL, as well as the manager's latest thoughts and words from the Chairman

https://www.templebarinvestments.co.uk/media/insights/reflections-current-market-volatility/

https://www.investormeetcompany.com/updates/an-update-from-the-chairman/show

Worldwide Healthcare Trust (WWH LN, Biotechnology & Healthcare, £1,393.9m mkt capn, 12.6% discount to NAV)

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. 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. The investment trust sector in the UK represents one third of the FTSE 250 Index and half of the FTSE Small Cap Index. There are highly valuable listed fund vehicles available to use for savings and investment today, as there have been for the last 150 + years.

Find us on the web:  https://www.frostrow.com/

Find us on You Tube:  https://www.youtube.com/channel/UCAptpfmx0HITqvlI68psd7Q

Check out our inaugural podcast also, released today:  FROSTROW CAPITAL - Frostrow Talks Trusts - AI Podcast - InvestorMeetCompany

Frostrow Capital, bringing you high quality, differentiated product in a UK listed closed-ended form

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

Discount Control

Fair Oaks Income Limited FY results to 31 December 2024 (FAIR LN, Debt – Structured Finance, £209.8m mkt capn, 4.9% discount to NAV): NAV TR 2021 Shares +14.9%; share price TR +13.1%; Realisation shares NAV TR +17.3%; JPMorgan Leveraged Loan Index +9.3%; FY dividends paid of 8 cents per share; "The Board continued through the financial period to implement the Company’s share buyback programme announced in September 2022, repurchasing 5.6 million 2021 Shares in 2024, equivalent to 1.5% of the 2021 Shares in issue at the start of the year. The share buyback was further supported by the Adviser’s commitment to reinvest 25% of management fees should the shares trade at a discount. The 2021 Shares ended the year trading at a -3.8% discount to NAV, which compared to a -25.4% discount for the Alternative Funds Ex-3i category."

Pantheon International (PIN LN, Private Equity, £1,262.1m mkt capn, 45.3% discount to NAV) NAV as at 31 March 2025: -0.5% over the month to 501.2pps, driven by FX with “6% of reported valuations dated 31 March 2025 or later, 81% dated 31 December 2024 and 13% dated 30 September 2024.” The Board “recognises that the discount on PIN's shares continues to be wide and this has been further exacerbated by market volatility.” "The Board remains confident in the valuations reported by our underlying private equity managers and the quality of its underlying portfolio. In order to capture the compelling value offered by the discount, the Company announced on 28 March 2025 that the Board had allocated a further £35.0m to share buybacks, to be deployed by 31 May 2025, bringing the aggregate share buyback allocation for the financial year-to-date to £50.0m."

M&A news

BBGI Global Infrastructure (BBGI LN, Infrastructure, £1,016.5m mkt capn, 0.7% premium to NAV) announced “all of the Regulatory Conditions required for the Offer [from British Columbia IM] have now been satisfied… [and the] offer timetable [has] resumed with the final day for acceptances (Day 60) being 20th May 2025.”

LondonMetric Property (LMP LN, 3,930m mkt capn) has published a scheme document in relation to its acquisition of Highcroft Investments.

Capital allocation update

Molten Ventures (GROW LN, £506.1m mkt capn) FY trading update: NAV as at 31 March 2025 expected to be 671pps (662p at 31/3/2024) with “cash balance as at 31 March 2025 of £89m, [and] a further £23m available for investment from the managed EIS/VCT funds. Undrawn RCF of up to £60m provides further funding flexibility.” "Completed £15 million of share buybacks during the financial year and commenced an additional £15 million share buyback programme on 13 March 2025 (of which £3.8 million has been repurchased to date)." "Continued focus on capital allocation, balancing the pipeline of new investment opportunities with the ability to drive returns to shareholders through share buyback programmes, while maintaining sufficient reserves."

Continuation vote

Smithson Investment Trust (SSON LN, Global Smaller Companies, £1,697.2m mkt capn, 10.4% discount to NAV) published the results of its AGM, at which shareholders approved the company’s continuation (96.24% of those who voted were in favour).

Greencoat UK Wind (UKW LN, Renewable Energy Infrastructure, £2,523.7m mkt capn, 25.8% discount to NAV) NAV as at 31 March 2025: -0.8% over calendar Q1 2025 to 150pps, driven by “by lower power prices and movements in mark to market valuations of interest rate swaps, offset by robust net cash generation.” Generation 18% below budget due to low wind resource and gearing at 40.2%. 2.59pps dividend declared in respect of the period. UKW also published the results of its AGM at the continuation vote passed, albeit 10.48% of those who voted were in favour of discontinuation.

Premier Miton Global Renewables (PMGR LN, Infrastructure Securities, £16.2m mkt capn, 13.7% discount to NAV): shareholders voted for the continuation of the Company, albeit 10.66% voted against and 14.57% abstained. If you recall, the Chair in the recent FY results had said: "Your Board will ...explore other options which may include the wind up of the Company with a distribution of cash, with a potential option for shareholders to roll-over into a similar open-ended fund. The Board will consult with shareholders and advisers to reach the optimal outcome. With this in mind, having consulted with advisers and Premier Miton, the Board recommends shareholders vote in favour of the continuation resolution at the 2025 AGM to be held in April. This will allow the Board maximum flexibility to bring forward proposals to wind up or otherwise reconstruct the Company, or should market conditions improve substantially, to continue as an Investment Trust. Voting in favour of continuation does not, of itself, mean that the Company will continue in existence after the repayment of the ZDP shares in November this year."

Gearing news

Pershing Square Holdings (PSH/D LN, North America, £6,326.4m mkt capn, 30.7% discount to NAV) launched an offering of its Euro-denominated senior notes with intermediate tenor, with the proceeds “to be used for general corporate purposes, including to make investments or hold assets in accordance with PSH’s investment policy.” The Company subsequently announced the pricing of €650 million aggregate principal amount of its Senior Notes due 2030 at a coupon of 4.250% per annum.

Globalworth Real Estate Investments (GWI LN, £682.2m mkt capn): has successfully extended its €100 million secured bank financing with the consortium of Helaba Bank and pbb Deutsche Pfandbriefbank, which was due to mature in May 2025, for an additional five years. The financing continues to be secured on a number of its assets in Poland. As a result of this refinancing, the group's pro-forma average debt maturity has increased from 4.9 to 5.3 years as of 31 December 2024, further enhancing its long-term financial stability.

Supermarket Income REIT (SUPR LN, Property – UK Commercial, £964.6m mkt capn, 11.9% discount to NAV) has entered into a JV with Blue Owl Capital under which the JV has been seeded with eight assets from SUPR’s existing portfolio at a 3% premium to 31 December 2024 book value, with a combined value of £403m. SUPR will receive a net cash consideration of £200m in respect of these properties (retaining a 50% stake in the JV) and a 0.6% pa management fee. “The proceeds from the JV will be used to reduce debt in the near term and to invest in other supermarkets either directly for SUPR or indirectly through the JV, based on the investment profile of assets.” "...after completion, the Company will have an LTV of c.31%. Through redeployment of capital the Company expects to operate at the upper end of its target LTV range of 30-40%, which will include its share of assets and net debt in the JV. The Company will continue to keep all capital allocation options under review."

Foresight Environmental Infrastructure (FGEN LN, Renewable Energy Infrastructure, £468.7m mkt capn, 31.6% discount to NAV): announces that it has reduced the size of its Revolving Credit Facility from £200 million to £150 million. The downsizing of the RCF will result in an annual cost saving of £367,500. The reduced RCF, currently drawn at £100.5 million, continues to provide ample headroom to cover outstanding portfolio commitments, including the remaining payments for the Company's well progressed construction stage investments. The Company maintains a strong balance sheet, with a sector-leading gearing ratio of 28.8% at 31 December 2024.

Results / updates

Gresham House Energy Storage (GRID LN, Renewable Energy Infrastructure, £399.5m mkt capn, 36.8% discount to NAV) FY2024 results to 31 December 2024: NAV (pre-announced) -15.3% to 109.35pps; “portfolio revenues rose 20.1% to £46.5m (2023: £38.7m) as revenues in the second half rose 58.1% YOY to £28.6m; operational portfolio EBITDA rose 12.7% to £29.1m.” “Net debt to GAV stood at 14% and net debt to NAV at 18%.” Since year-end, “operational capacity has increased further to 945MW / 1,447MWh… [and] Shilton Lane (40MW / 80MWh) and West Bradford (87MW / 174MWh) are both expected to become operational in Q2 2025 to take total operational capacity to 1,072MW / 1,701MWh.” “Progressing a transaction to validate NAV and to improve liquidity remains an active focus. A deal with initial terms agreed is in the late stages of due diligence with an announcement expected soon.” “Upon refinancing of the existing debt, GRID expects to reinitiate distributions to shareholders. The Board will provide further information about dividends and other uses of capital allocation such as buybacks at that time.”

Augmentum Fintech factsheet for Q42024/25 as at 31 March 2025 (AUGM LN, Financials & Financial Innovation, £133.2m mkt capn, 51.5% discount to NAV): "The investment opportunity in European fintech in 2025 remains highly compelling, despite macroeconomic headwinds...The UK Government remains a long-term supporter of the fintech sector, regardless of political party, and this has been increasingly visible in recent months, with Chancellor Rachel Reeves positioning it at the heart of the nation’s financial services growth strategy and calling it out in her first Mansion House speech as one of five priority areas in the forthcoming Financial Services Growth and Competitiveness Strategy. The FCA also recently appointed a fintech and digital banking specialist as their new Head of Innovation. This support is evident across Europe as well, reflected in the European Commission’s development of a comprehensive Startup and Scaleup strategy."

DP Aircraft 1 Limited FY results to 31 December 2024 (DPA LN, Leasing, £29.4m mkt capn, 38.7% discount to NAV): "Due to the impact of COVID-19 on the aviation industry and therefore our lessor, the Board suspended the payment of dividends from 3 April 2020 until further notice. This suspension remains in place to date. Any lease rental payments received by the Company in respect of the Thai aircraft are expected to be applied exclusively towards the running costs of the Company and its subsidiaries, and as a priority towards interest and principal repayments to the DekaBank. Given this backdrop the Company feels that there is no real prospect of the Company's shareholders receiving a dividend or other distribution under the current lending arrangement. The Board and its advisers will continue to consult with shareholders and its advisors in the future with a view to determining the best course of action to take for the future of the Company." "The existing debt financing arrangements with the current lenders are set to expire in October and December 2026, coinciding with the expiration of the Thai leases. The Group is actively exploring all refinancing options, including potential agreements with new lenders, and has already received several indicative proposals. The Board will be evaluating these proposals as a top priority. " "Notwithstanding there has been some unavoidable cost increases and inflationary pressures, with respect to ongoing working capital requirements, the Group has been able to control the net cash burn supported by some service providers continuing to defer certain amounts due. The Company raised additional equity of $1 million in November 2024."

Wind up news

Riverstone Credit Opportunities Income (RCOI LN, Debt – Direct Lending, £53.2m mkt capn, 15.9% discount to NAV) NAV as at 31 March 2025: -5% over calendar Q1 2025 to $0.88, driven by “investments in Harland & Wolff, Seawolf and Max Midstream.” “Due to higher-than-normal expenses in the quarter ending 31 March 2025, it is anticipated that the Company will only be able to pay a nominal dividend for this quarter. However, once the Company has received its expected cash payment from Harland & Wolff, it anticipates returning cash to Shareholders equal to approximately $16.0-17.0 million via a mandatory Share redemption. The Company will make a further announcement in due course."

Starwood European Real Estate Finance (SWEF LN, Property – Debt, £163.9m mkt capn, 16.8% discount to NAV) NAV as at 31 March 2025: +0.6% over calendar Q1 2025 to 101.34pps. 1.375pps dividend declared in respect of calendar Q1 2025. Company has cash balances of approx. £48.8m vs £19m of unfunded loan commitments. “The remaining six investments continue to perform within expectations… and the weighted average remaining loan term of the portfolio is now just 0.7 years.” "...the Company has now returned £256.0 million to Shareholders, equating to 61.9 per cent of the Company’s NAV as of 31 January 2023."

VPC Specialty Lending FY results to 31 December 2024 (VSL LN, Debt – Direct Lending, £74.7m mkt capn, 50.0% discount to NAV): "Over the year, the performance of the portfolio has been disappointing. Net returns from the portfolio were negative with unrealised negative capital returns offsetting positive revenue returns. A number of investments were realised, and the Investment Manager continued to explore exit opportunities for the portfolio’s remaining debt and equity positions. The Board continues to explore ways in which to accelerate the wind down with its advisers and with the Investment Manager...The Board and the Investment Manager are focused on the wind-down of the portfolio. In doing so, both parties are aiming to strike an optimal balance between early liquidity and maximising value. This has required the extension of some maturity dates and the provision of follow-on funding to preserve value in some of the Company’s investments. Despite this backdrop, the Investment Manager expects a substantial portion of the NAV to be returned during 2025."

Aquila European Renewables FY results to 31 December 2024 (AER LN, Renewable Energy Infrastructure, £213.3m mkt capn, 34.1% discount to NAV): NAV TR -8.2%; "On 30 September 2024, shareholders approved resolutions in relation to the discontinuation of the Company and amendment of the Investment Policy to enter a Managed Wind-Down. On 24 October 2024, the Company announced that the Board has appointed Rothschild & Co as the financial advisor in relation to the Managed Wind-Down process. The process to sell unquoted assets, especially complicated energy infrastructure assets, requires extensive and careful preparation - including vendor commissioned technical due diligence reports - if it is to produce optimal results. Thereafter, discussions with possible buyers are of course commercially sensitive meaning that value for shareholders could be prejudiced if information about their progress leaks out beyond the small group of professional advisers and Board members who are involved. The Board is therefore reluctant to provide commentary as to the status of discussions. However, shareholders should be assured that the objective - very clearly and unambiguously - is to complete the sale process as quickly as possible providing liquidity to shareholders at a premium to the share price, through realising assets at prices as close as possible to their contribution to the reported Net Asset Value. The Board will immediately update shareholders in the event that any incoming bid is accepted. The Board will communicate in due course how it proposes to distribute the capital sale proceeds which are received. In parallel, the Board and its advisers have also undertaken other initiatives in recognition of the Managed Wind-Down process, including reviewing the Company's cost structure and identifying potential opportunities for savings, reviewing and amending the Company's dividend policy and streamlining external reporting obligations."

Ecofin US Renewables (RNEW LN, Renewable Energy Infrastructure, £36.9m mkt capn, 58.5% discount to NAV) FY2024 results to 31 December 2024: NAV TR -46.5%; share price TR -44.6%; On 14 January 2025, shareholders approved the Company going into Managed Wind-Down. "Under the Managed Wind Down, the Board is seeking to implement an incremental sales programme of the Company's assets in an orderly manner with a view to repaying borrowings and subsequently making returns of capital to shareholders while aiming to obtain the best available value for the Company's assets at the time of their realisations. The first sale of assets, which was announced on 13 December 2024 comprises the sale of the distributed solar assets of the Company." "The Group's total gearing at 31 December 2024 was 62.5% (31 December 2023: 38.6%) based on a Gross Asset Value ("GAV") of $146.4 million and aggregate debt of $91.5 million. " "... the Company is not a forced seller at any price in the short term..."

Alignment

Finsbury Growth & Income Trust (FGT LN, UK Equity Income, £1,282.3m mkt capn, 6.9% discount to NAV) manager Nick Train purchased 55,237 shares bringing his total interest to 5,622,780 shares (3.89% of ISC).

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




Equity Capital Markets

EJF Investments Limited (EJFI LN): expects to shortly publish a prospectus containing details of a rollover offer to convert existing 2025 ZDP shares into 2029 Rollover ZDP shares as well as an initial placing of up to 28 million new 2029 ZDP Shares alongside a placing programme of up to a further 28 million 2029 ZDP Shares

Chelverton UK Dividend Trust (SDV LN): "the ZDP Placing will not proceed due to insufficient demand at the current time...Whilst there has been a broad level of support from a number of investors, continuing challenging and volatile market conditions have not been favourable in the circumstances." "The Company is progressing preparations for the liquidation of Existing ZDPCo and the redemption of the final capital entitlement of Existing ZDPs in full." "Alongside, the Company is actively considering alternative financing options and will provide a further update in due course."

Ex Dividend

AAIF 3.65p, AJOT 1.2p, BNKR 0.686p, CREI 1.5p, CTY 5.4p, FSFL 2p, HAN/HANA 0.8p, HMSO 8.07p, INPP 4.19p, JCH 8.4p, OCN $1.22, PPH 21p, SHC 1.8p, SUPR 1.53p

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