Yesterday (22 January), the trust completed the sale of its hydro portfolio for £44.1m.

The managed wind-down was backed by 99% of shareholders back in March 2024.

PA Events: PA Live: A World Of Higher Inflation 2025

Following the realisation of assets, the board has proposed a voluntary liquidation which will be voted on at a general meeting on 24 February.

If approved, TENT’s listing will be removed from the London Stock Exchange the following day.

The board has urged shareholders to back the resolution, stating that the liquidation represents the most cost and tax-efficient and timely method of returning capital to shareholders.

However, the board will look to implement a £42m tender offer to buy back shares if the liquidation resolution is not backed.

See also: Herald shareholders reject Saba proposals

Rosemary Boot, TENT chair, said: “Now all that remains is the mechanism to return the balance of the cash available back to you, our shareholders.

“It is very important that all shareholders make time to vote on this matter to ensure that we are able to do so in a timely and tax efficient manner. We are recommending that shareholders vote in favour of all the resolutions being proposed.

“In addition, in order to participate in the tender offer [which we are proposing as an alternative mechanism in case the liquidation is not approved], shareholders will also need to have submitted their tender forms [which will be conditional on the tender offer proceeding] in good time.”

65.1% of the total votes cast were against the eight requisitioned resolutions, which would have seen the trust’s board replaced by Saba’s nominees if passed.

A majority of the trust’s total shares with voting rights participated in the vote.

PA Events: PA Live: A World Of Higher Inflation 2025

In a stock exchange announcement, the board said only a further 59,221 non-Saba shares, representing just 0.15% of the votes cast, voted in favour of the resolution.

Saba’s shares represented 34.75% of the total votes cast.

Andrew Joy, chair of Herald Investment Trust, said the result provides a “clear, complete and incontrovertible rebuttal” of Saba’s proposals.

“The votes against Saba’s proposals were supported by independent proxy advisers including Glass Lewis and ISS. It is perfectly clear that the reason Saba’s proposals were rejected is that they were intended to lead to an outcome, namely Saba managing Herald, which the existing shareholders were simply not interested in.

“The reason shareholders invested, and continue to invest, in Herald is for long-term capital appreciation through investing in smaller technology companies, and they do not wish to be deprived of the opportunity to enjoy more of the same. They did not invest in Herald to become part of a short-term trading strategy.”

See also: BlackRock enters pact with Saba to ‘not seek to control or influence the board’

Following the vote, Saba’s Boaz Weinstein said he had been encouraged by the “thoughtful engagement” from fellow Herald shareholders in recent weeks.

“Over a brief period, our campaign has already enhanced value for shareholders and incited positive change at HRI – and elsewhere in the U.K. market – as evidenced by discounts to net asset value narrowing and numerous trusts announcing shareholder-friendly actions.”

He added that Saba would continue to pursue changes it believes are necessary to improve the trust.

“Saba remains committed to putting shareholders’ interests first, delivering returns for UK trust investors and ultimately rehabilitating this broken sector. We urge shareholders of the six other trusts at which we have requisitioned General Meetings to support Saba’s resolutions in order to set these trusts on the path to meaningful value creation.”

‘Victory for shareholder democracy

Reacting to the outcome, Richard Stone, chief executive of the Association of Investment Companies, said: “It’s very encouraging to see Herald shareholders turn out to vote in such numbers.

“This is a victory for shareholder democracy. There are six other trusts with votes just around the corner. It’s vital that all shareholders vote on the future of their investment trust. Shareholders need to act now.”

Voting on similar proposals for the six other trusts requisitioned by Saba will take place over the coming weeks.

Baillie Gifford US Growth and Keystone Positive Change will vote on 3 February, a day before CQS Natural Resources Growth & Income and Henderson Opportunities Trust.

The European Smaller Companies Trust meeting is scheduled for 5 February, before Edinburgh Worldwide shareholders vote on 14 February.

BlackRock gained assurances from Saba that it would “not engage in any takeover offer”, “seek to control or influence the board”, or “seek to change the composition of the board”.

Trusts that made this pact with Saba include BlackRock’s World Mining, Smaller Companies, Energy and Resources Income, and American Income trusts. It will be in effect until 31 August 2027.

BlackRock reached these agreements despite noting that “Saba does not hold any interests in the issued share capital” of any trust.

Yet it may be an effort to protect itself in case Saba attempts to oust and replace its boards, as it has attempted with Keystone Positive Change, Baillie Gifford US Growth, Edinburgh Worldwide, Henderson Opportunities, and CQS Natural Resources Growth and Income, Herald, and European Smaller Companies.

Each of these trusts has urged shareholders to vote against Saba’s proposals, expressing that they are self-serving and are seeking to take effective control of each company.

Keystone’s chair Karen Brade said she was “appalled by Saba’s actions and conduct”.

“Be under no illusion – we believe this US hedge fund manager is acting opportunistically, seeking to seize control of the board without a controlling shareholding, to pursue its own agenda,” she added.

The Association of Investment Companies (AIC) and Edison have gone a step further, raising their concerns directly with the Financial Conduct Authority (FCA) that Saba’s plans are in breach of the UK Corporate Governance Code.

They argue that Saba’s appointment of its own candidates would break rules protecting board independence.

In its governance code, the City watchdog deems a director biased if they “represent a significant shareholder” or have “a material business relationship with the company” – two factors that could work against Saba, considering it owns between 19% to 29% of the shares in each trust.

Analysts at Edison added: “A scenario in which an activist hedge fund is a significant shareholder driving the replacement of the current boards with its proposed directors, and subsequently appointed as the trust’s investment manager, creates a conflict of interest, especially when setting the terms of the management agreement.”

The AIC voiced concerns over the participation of retail investors in voting on the future of the trusts. While platforms have been supplying information on the voting to customers, the AIC called for platforms to “actively contact” clients to encourage voting and have investors automatically opted in to communications about actions within trusts.

See also: Saba’s Weinstein fights back at criticism over trust plans

Richard Stone, chief executive of the AIC, said: “Following Saba’s action, we are concerned that the current regulations do not protect the interests of retail shareholders. Saba is targeting investment trusts with a high percentage of retail investors, so it’s vital they have their say on the activist’s radical proposals to replace the board, change the investment strategy and become the investment manager.

“We are relying on platforms’ support to get this information out to their customers and encourage them to vote. Thankfully they have been broadly supportive of our call for action.”

In a presentation released by Saba, the firm outlined that if elected, it would assess options for liquidity events and appoint at least one additional independent director to the boards. In a longer-term view, Saba said it would consider ending the trusts’ current management agreements, research new managers which could include Saba and apply a similar investment strategy to the one used for Saba’s Close-End Funds ETF.

See also: Saba Capital and its intentions for the UK investment trust industry

The AIC also called on the FCA “to urgently explain its views on the independence of directors under the Saba proposals”, and questioned how conflicts of interest would be managed if Saba won the vote and was proposed as manager.

Saba said apart from Saba founder Boaz Weinstein and Saba principal executive officer Paul Kazarian, its candidates for directors are independent. Weinstein and Kazarian have committed to recusing themselves from any votes that would involve decisions related to Saba, including a vote to appoint the company as investment manager.

“The FCA must review the scope of board independence in the Listing Rules. Saba’s campaign raises questions about the independence rules if they permit a significant shareholder, who may have a conflict of interest, to effectively select board members – particularly when those board members may go on to appoint that shareholder as the asset manager,” Stone said.

The investment trust’s new annual dividend policy will see annual payouts of 6.25% of average net asset value, applied from the start of the 2025 financial year.

Based on NAV at the end of 2024, the dividend policy equates to a notional annual yield of 7.1%, based on its 222p share price.

See also: abrdn appoints Xavier Meyer as investments CEO in restructure

In a stock exchange announcement, the trust’s board said the move aims to narrow the trust’s 12% discount over time by broadening the appeal of its shares.

abrdn Asian Income has also introduced continuation votes, which will see shareholders vote on the trust’s future at three year intervals. The first vote will be held in 2028.

Meanwhile, an 6.78p interim dividend was announced for the fourth quarter, bringing the total for 2024 to 14.43p per ordinary share.

Ian Cadby, who chairs the trust’s board, said: “The board is delighted to deliver another year of increased dividends for our shareholders, reflecting our commitment to providing a meaningful and sustainable income.

“The Asia Pacific region continues to emerge as one of the most dynamic sources of dividends globally, offering a compelling blend of growth and income potential. With our enhanced dividend policy, we are poised to capitalise on these robust opportunities while adapting to shareholders’ needs in today’s high-interest rate environment.

“The introduction of a continuation vote further underscores our dedication to transparency and shareholder empowerment. We are confident in the long-term resilience and growth of the asset class, and staying true to our disciplined investment strategy should ensure strong and consistent returns for our investors.”

The ratings from Kepler Trust Intelligence factor in a span of five years with an analysis of risk, investment sector, objectives and performance relative to benchmark.

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Thomas McMahon, head of investment companies research at Kepler Partners, said: “The investment trust sector tends to attract the best managers; the structure gives managers plenty of flexibility to generate alpha, while the closed-ended nature means the management contracts are highly prized by fund groups.

“Our ratings reward the outstanding performers in three key categories and are designed to recognise those managers who have done particularly well to generate outperformance and mitigate the market risk during a highly volatile period over the past five years.”

Winners across the sectors include:

Growth Rated Funds

• Pershing Square Holdings
• Ashoka India Equity Investment
• Pacific Assets
• Schroder Asian Total Return Inv. Company
• Odyssean Investment Trust
• CQS Natural Resources G&I
• Fidelity European Trust
• Pacific Horizon
• AVI Japan Opportunity
• Henderson European Trust
• Invesco Global Equity Income Trust
• Vietnam Enterprise
• The European Smaller Companies Trust
• JPMorgan American
• Vietnam Holding
• BlackRock Frontiers
• BlackRock Energy and Resources Inc
• Schroder Japan Trust
• Strategic Equity Capital
• Fidelity China Special Situations

Kepler singled out the success of the Fidelity China Special Situations trust, which according to the AIC, is currently trading at a 13.8% discount according to the Association of Investment Companies. While the share price total return has lost 4.3% across the past five years, the sector has averaged a an 11.4% loss.

Income Rated Funds

• Montanaro UK Smaller Companies
• Utilico Emerging Markets
• JPMorgan UK Small Cap Growth & Income
• CC Japan Income & Growth
• BlackRock Smaller Companies
• Scottish American
• Templeton Emerging Mkts Invmt Tr
• JPMorgan Global Growth & Income
• JPMorgan European Growth & Income
• Henderson Smaller Companies
• Invesco Asia
• Diverse Income Trust
• Law Debenture Corporation
• abrdn Asian Income Fund
• TR Property
• Henderson Opportunities
• Schroder Oriental Income
• BlackRock World Mining Trust
• Aberforth Smaller Companies
• Fidelity Special Values

The list includes a group of UK small-cap trusts, with attention on Aberforth Smaller Companies. The trust runs as a pure value strategy and has had a share price total return of 7.7% in the past five years, against a sector average loss of 2.3%. It currently trades as a 12.4% discount.

“Four of the trusts to have won an Income rating utilise an enhanced dividend policy, pointing to a growing trend in the industry and suggesting that, over the medium term, these policies are effective in providing attractive dividend growth,” McMahon said.

Alternative Income Rated Funds

• Foresight Environmental Infrastructure
• Foresight Solar
• Bluefield Solar Income fund
• Renewables InfrastructureGroup
• CVC Income & Growth GBP
• Greencoat UK Wind
• BBGI Global Infrastructure
• Ecofin Global Utilities & Infrastructure
• 3i Infrastructure

“The Alternative Income rating looks at relevant sectors for trusts that have managed to deliver a flat or stable NAV along with dividend growth over the past five years. For the first time, the number of trusts rated in this category has fallen – with only nine trusts qualifying, down from 14 last year – reflecting the impact of an interest rate shock on the valuations of unlisted portfolios, financing costs and net cash yields,” McMahon said.

US-based hedge fund Saba Capital is attempting to take ownership of seven UK investment trusts in total that it currently owns shares in, including Keystone Positive Change, Henderson Opportunities Trust and Baillie Gifford US Growth.

Plans put forward by Saba, which was founded by its CIO Boaz Weinstein in 2009, would see the trusts’ independent boards replaced by two new directors, as well as a change to the companies’ mandates and investment managers.

See also: Update: Saba plans full cash exit option for Herald

According to a London Stock Exchange announcement published today (14 January), ISS has stated that Saba “has not presented a compelling case for change, let alone a case for a majority position on the board and a strategy overhaul” ahead of Herald’s general meeting. It has therefore recommended that shareholders vote against the requisitioned solutions at the meeting, which will take place at midday at 10-11 Charterhouse Square in London.

The recommendation follows a circular published by Herald investment trust on 3 January this year, whereby the board unanimously recommended that shareholders vote against Saba’s attempted takeover.

Andrew Joy, chair of Herald investment trust, said: “The board of Herald welcomes and is encouraged by the recommendation from ISS for shareholders to vote against the requisitioned resolutions proposed by Saba on 22 January 2025. The recommendation supports our belief that the proposals from Saba are not in the best interests of all shareholders, and we strongly urge all shareholders to vote against the requisitioned resolutions proposed.”

The Herald investment trust is the first company to have scheduled a meeting for shareholders to vote on the proposals, with a majority of the other trusts scheduling meetings during the first week of February.

Herald hits back at performance claims

In a separate LSE announcement this morning, Herald investment trust’s board has responded to Saba’s claims that its strong performance track record justifies its desire to take over the trust.

See also: Saba Capital launches campaign to replace seven investment trust boards

According to Herald, the trust has “materially outperformed” the Saba Capital Master Fund – the US firm’s flagship product – since its launch in August 2009 – on both an annualised and cumulative basis.

“The board believes that the Saba Master Fund has delivered an annualised net return of approximately 4.8% from 1 August 2009 to 7 June 2024 (being the latest date to which its performance data is available from public sources), implying a cumulative return of approximately 99.5% (in each case calculated in USD, the Saba Master Fund’s base currency),” it said. “In direct contrast, Herald’s annualised NAV total return over the same period was 14.1%, or a cumulative return of 611.4% (in each case calculated in GBP, Herald’s base currency).”

“Furthermore, the reported discrete annual returns for the Saba Master Fund raise questions regarding the potential volatility of Saba’s strategy. For the 13 years that annual performance data is available publicly from third party sources and press articles (2010 to 2023 inclusive, with the exception of 2017. Only cumulative or partial data is available for 2009, 2017 and 2024), the Saba Master Fund delivered negative annual performance in six of the 13 years according to such sources.

“Over the same period, Herald’s discrete annual NAV total return was negative in only three years.”

See also: Baillie Gifford: ‘We are appalled by Saba’s actions and conduct’

Therefore, Herald’s board does not believe that appointing Saba to take over the trust would be in the best interests of shareholders, adding that the firm wants to take control of the trust, “in part, add to its own assets under management”.

“Saba’s proposals, which lack any meaningful detail apart from the intention to appoint itself as manager, fundamentally change the company’s investment strategy and offer an uncapped cash exit on uncertain terms, risk significant value destruction for shareholders and are the anthesis of the company’s successful long-term investment approach.”

Herald’s board added: “The board believes that Saba’s proposals are designed for its own economic benefit and will be to the detriment of those shareholders who wish to remain invested in a proven strategy which has delivered a 27x NAV total return since the first day of dealings.”

The 100% cash exit would come at 99% of the trust’s total net asset value, which currently sits at £2.5bn.

In a statement, Saba said the cash exit would be overseen by a fully independent board, which would not expect it to occur for at least a year.

The plans to offer a full cash exit come in response to shareholder feedback, the firm said.

The requisitioned general meeting, at which Herald investors will vote on Saba’s proposal to replace the board with their own nominees, will take place on 22 January.

See also: Trusts targeted by Saba campaign urge shareholders ‘take no action’

Herald responds

The Herald board responded to Saba’s announcement, noting that Saba is not proposing to offer 99% of the value of today’s net asset value.

“Instead Saba is proposing an exit after ‘at least a year’ during which open-ended time period significant value could be lost from the underlying portfolio in anticipation or consequence of Saba’s known selling appetite,” the board said in a stock exchange announcement.

They added that the board has engaged with “many shareholders”, who they say have not expressed a wish for Saba to take over the management of the company.

Andrew Joy, Herald chair, said: “Herald has delivered strong investment performance. Since the first day of dealings (21 February 1994) the Company has delivered a 27x NAV total return.

“In direct contrast to Saba’s promise of the “opportunity for greater long-term returns under a new investment strategy”, the Herald Board does not believe that Saba’s long term performance track record supports this.”

See also: IA: UK reinvests in November following two months of exits

Reacting to both announcements, QuotedData head of investment company research James Carthew said that the Herald board’s argument is “straightforward”.

“More worrying to us is the tortured logic in Saba’s statement in which it claims to know what an independent board would do at some point in the future, clearly implying that it believes that it can direct the board’s actions. We cannot get our heads around how a board consisting of Saba employees, Saba appointees, and persons that these Saba-connected directors later co-opt onto the board could ever be construed as independent.

“We iterate our belief that investors should not surrender control of these trusts to this vulture investor. Furthermore, if Saba does seize control and seeks to impose its particular investment approach on the portfolio, investors should be given an exit at NAV, not at a 1% discount.”

In a stock exchange announcement this morning (2 January), the two parties said they had reached a confidential settlement without any admission of liability. Chrysalis had previously alleged Revolution had provided misleading information during its period as a shareholder.

Last February, Chrysalis outlined ‘potential claims’ against Revolution Beauty under the UK financial services & markets act.

See also: Chrysalis preps for £100m share buyback with new loan

Chrysalis, which invests in later-stage private equity firms, bought £45m worth of Revolution shares in July 2021.

The investment trust took heavy losses on its stake, selling its position for £5.7m in late 2022.

The investment trust’s claim centred around information provided by Revolution during Chrysalis’s time as a shareholder, which it said contained ‘misstatements and material omissions’.

Revolution strongly contested those claims.

The Revolution board said it had agreed to pay Chrysalis a ‘non-material sum’, believed to be less than 1% of Chrysalis’s £613m market cap.

According to the AIC, Chrysalis shares currently trade at a -23.6% discount to NAV.

South Korea’s transition from a manufacturer of durable consumer electronics to a frontrunner in new-age tech such as semiconductors and electric vehicle batteries has presented itself as a ripe opportunity for stockpickers, according to Franklin Templeton’s Chetan Sehgal.

Sehgal, portfolio manager of the Templeton Emerging Markets investment trust, said the country is “at the forefront of innovation”, boasting the highest per-capita patent filings globally. He added that South Korea is also “one of the very few markets globally where the internet ecosystem is dominated by domestic companies”.

One stock held by the trust which is capitalising on this trend is multinational insurance company Samsung Life. Founded in 1957, Sehgal said it is now the largest life insurance company in South Korea.

“With a customer base exceeding 10 million, Samsung Life is the undisputed leader in its home market – a dominant position that acts as a formidable barrier to entry.

“Beyond South Korea, the company has strategically expanded its footprint across eight countries in Asia, the US and Europe. This international growth underscores the company’s ambitions to increase market share globally.”

While Samsung Life suffered a downturn during the mid-2000s due to a range of guaranteed return policies amid a low-interest rate environment, Sehgal said recent product development and diversification initiatives have sparked “a significant turnaround” in share price performance. He added that higher interest rates have also bolstered the profitability of existing products.

“The strategic shift toward health-related products has been particularly successful, with health and wellness insurance, pension plans and customised annuity products forming part of its diversified portfolio – all under a trusted Samsung Life brand name,” he said.

“Moreover, the company is embracing digital and technological innovation. The adoption of cutting-edge virtual reality tools enhances the customer experience and delivers services cost-efficiently. The company is also exploring ways to convert some of its 40,000 office-based staff into mobile operators, further streamlining operations while improving customers service options.”

Elsewhere, Sehgal is favourable on the prospects for SK Hynix, which manufactures memory components for mobile phones, data storage and memory cards. He said it is currently the world’s second-largest chipmaker and the sixth-largest semiconductor globally, with manufacturing facilities in Korea, China, Taiwan and the US.

“The memory sector is currently experiencing an upturn, fuelled by the surging demand for high bandwidth memory, particularly in AI applications,” the manager explained. “SK Hynix has seized a leadership position in this latest generation of high-bandwidth memory market, securing key supply agreements with industry leaders.”

And, as memory-related technology improves, Sehgal pointed out that manufacturing processes become more intricate, which will reduce product supply.

“Consequently, prices in this historically cyclical industry are rising, boding well for the leaders producing high-quality memory commodities,” he said.

“We maintain our belief that memory companies will significantly benefit from the AI revolution, with SK Hynix leading the high-bandwidth memory segment crucial for AI applications, exerting a significant influence on the market.”

abrdn looks beyond TSMC in Taiwan

While small-cap and tech stocks have not been traditional hunting grounds for income investors, managers of the £344m abrdn Asian Income fund identify strong opportunity sets in both.

Roughly 15% of the investment trust’s net asset value is in smaller companies, while tech is its largest sector overweight.

“It might seem weird for an income fund from a European perspective to see so much in tech,” co-manager Yoojeong Oh said, “but we have a lot of good quality tech companies in Asia that are not only net cash in their balance sheet, but also offering great growth because they have dominant market share in the businesses they are in.”

It is difficult to find an Asia portfolio that isn’t invested in market-leading semiconductor business TSMC (Taiwan Semiconductor Manufacturing Company), and while abrdn Asian Income is no exception, Oh argues the Taiwanese market offers opportunities in tech beyond its largest stock.

TSMC is abrdn Asian Income’s largest position by some way, making up 12% of the portfolio at the end of August. However, the trust also invests in Taiwanese stocks such as Taiwan Mobile and Sunonwealth.

“Sunonwealth is a Taiwanese small-cap company which makes the cooling fans that go into data centres. With the growth of information processing and machine learning, such as ChatGPT, the world needs more and more data centres, which then need more and more cooling,” Oh said.

“Sunonwealth is one of three companies globally that can produce these specialised cooling fans. They have a net cash balance sheet and a good ability to pay dividends.”

“I think that’s a good example of a company that starts in that small-cap space, but perhaps in a few years will be in the mid-cap bucket.

“We are constantly trying to refresh that small-cap portion of the fund to make sure we keep holding those growers.”

On small caps, Oh said it’s an “interesting place” to find new ideas. “Even the small-cap companies we invest in contribute to both net asset value growth and dividend yield.

“Because Asia went through a debt crisis in the late-1990s, there are actually a lot of good mid-cap companies in the region that are family-owned, very conservative and very protective of their balance sheets. We get good quality mid-cap companies that pay us that dividend and hold resilient balance sheets.”

She added that generally speaking, balance sheets in Asia are much less leveraged than in US and in Europe.

“That provides good flexibility in terms of the safety of dividends going forwards. Because we have these stronger balance sheets, we have good free cashflow-generative companies and that is across the market cap spectrum.

“We are really trying to play into that theme of accessing the growth in Asia, but also accessing that growing dividend story as well.”

abrdn Asian Income currently trades at a 13.2% discount to NAV, according to the Association of Investment Companies, and has a dividend yield of 5.29%.

Could Turkey be the next big EM story?

With poor performance from the Chinese equity market weighing on returns for typical ‘one-stop shop’ emerging market strategies over the past few years, managers of the Barings Emerging EMEA Opportunities investment trust believe investors are viewing their EM exposure through a more regional lens.

The trust aims to generate positive alpha by offering exposure to smaller names in typical emerging market benchmarks, in eastern Europe, Africa and the Middle East.

“New shareholders in the trust, particularly institutional, are looking at emerging markets from a regional perspective again versus globally. That’s something we’ve seen for the past two years now,” said co-manager Adnan El-Araby.

According to El-Araby and fellow manager Matthias Siller, one of the regions that could benefit from this realignment is Turkey.

“We think there is a potential opportunity for Turkey to come back into the fold as a credible emerging market investment,” El-Araby said.

The country is experiencing a painful period for the local economy as it navigates the trade-off between job creation and bringing down rampant inflation, added Siller.

“We’ve taken our foot off the gas for now to wait and see, because this is the ultimate test for the political willingness to see a more orthodox monetary policy. In the past, Turkey has had a super-expansionary monetary and fiscal policy.

“We see a lot of opportunities there at the political, stock and sector level. The stock exchange itself is one of the most liquid in the world, so we also attracted by that.

“I think it will become a much bigger story in 2025 from an EM perspective.”

An example of the trust’s Turkey exposure can be found in local discount supermarket Bim. Siller said: “It’s a local name, it’s not like Lidl coming to Turkey and being very successful. Bim has been so successful that Lidl doesn’t come to Turkey. It was set up from scratch and built into the largest supermarket operator in Turkey with more than 10,000 stores and still growing. It’s a price leader, reinvesting margins into prices and not leaving any oxygen for the competition. It’s also been instrumental in driving inflation down.”

The trust’s investment process places emphasis on governance and the strength of management teams to be able to navigate the volatility that comes with emerging markets.

“[Bim] knows how to operate in Turkey,” El-Araby added. “It has manoeuvred not only the economic volatility we’ve seen in the past 10 years, but also the political volatility. It has managed its balance sheet and bought back shares; it also pays a dividend.

“It can communicate to the market. I’ve been looking at them for 15 years. Matthias has known them for over 20 years, so it’s almost exactly what we look for in a company.”

This article first appeared in the November issue of Portfolio Adviser magazine

It said there were “a number of interested parties” it was currently in contact with, and will update shareholders on the trust’s potential sale in the first quarter of 2025.

The strategic review that led to this was triggered by a group of shareholders (representing 17.3% of issued shares) applying pressure on the board to make changes in August.

See also: CG Asset Management criticises PRS REIT board over investment adviser terms

At the time, the £567m UK property fund was down 4.7% since its launch in 2017 and was trading 35.9% below its net asset value.

Non-exec chair Steve Smith consequently resigned after the shareholder intervention and was replaced by senior independent director Geeta Nanda.

The consideration of a potential sale is the board’s answer to concerns that it should be “maximising value for the company’s shareholders”.

Returns have fallen 5.6% since it launched in late 2019, and those who invested at its peak in September 2022 would be 23.5% worse off today, hence why shareholders voted to close down the trust in September.

Its plan to wind down the portfolio will involve the gradual selling of its assets by the end of next year. It aims to have the first 15%-20% sold and returned to shareholders in the first quarter of 2025.

See also: JPMorgan to merge beleaguered Japan trusts

The trust noted that the process will need to be drawn out due to the illiquid nature of its holdings. By selling its assets in an “orderly manner” over the coming year, it intends to “optimise shareholder value and with regard to the time-value of money”.

Its plans will also include converting the existing shares into ordinary shares that are redeemable at the option of the company, which the trust says will be less costly.

Shareholders will vote on whether to execute this wind-down plan at its extraordinary general meeting on 20 December.