Takeover frenzy: number of investment trusts shrinks by 17% in three years
Dan Coatsworth Tuesday, June 24

A £175 million bid for Downing Renewables & Infrastructure represents the 10th investment trust to receive a takeover offer this year – and several more have been the target of bidding wars.
With so many trusts trading well below the underlying value of their portfolio, it’s feasible to suggest takeover action will continue for the rest of the year given the bargains on offer. Sustaining a rapid pace of takeovers would exacerbate a worrying trend that’s already in motion, namely the shrinking pool of investment trust opportunities on the market.
There were 279 trusts on the London market at the end of May 2025 compared to 337 names three years earlier, according to data from the Association of Investment Companies. That represents a 17% decline since May 2022. There are now fewer trusts on the market than 10 years ago, which is quite remarkable when you consider how they’re increasingly popular with retail investors.
Who has received takeover bids this year?
We’ve already had three times as many investment trust takeover bids this year than in the whole of 2024.
Investment trusts receiving takeover bids so far in 2025 |
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Assura |
BBGI Global Infrastructure |
Care REIT |
Downing Renewables & Infrastructure Trust |
Fidelity Japan Trust |
Harmony Energy Income Trust |
Henderson European Trust |
The PRS REIT |
Urban Logistics |
Warehouse REIT |
Source: AJ Bell, company announcements |
Fidelity has been on the giving and receiving ends of bids this year with two of the trusts it manages. Earlier this year Fidelity Japan Trust was targeted by sector peer AVI Japan Opportunity Trust but rejected the bid. The trust then said it would hold a beauty parade to take over running the company when the current manager retires later this year.
More recently, Fidelity European Trust moved on Henderson European Trust and proposed they would be better off together. It was pitched as a merger but in reality, this is a takeover. In February, Henderson European Trust launched a review of options for its future and has now concluded the tie-up with Fidelity is the best outcome for shareholders.
We’ve seen bidding wars for several trusts including Harmony Energy Income Trust where both Foresight and Drax tried to buy it.
The highest profile takeover situation
The biggest drama has been found with medical centre property owner Assura where two parties are still fighting for ownership. Private equity group KKR originally sniffed around the trust in conjunction with Universities Superannuation Scheme (USS), a pension scheme that already had a joint venture with the target. USS quickly went away and was replaced by Stonepeak as KKR’s bid partner.
A rival business called Primary Health Properties (PHP) wasn’t going to let a big opportunity disappear in a flash and it’s been counterbidding ever since. While KKR has offered more money than PHP, certain Assura investors would prefer the latter wins the bid as it would mean they still get investment exposure to the company as PHP has a listing in London.
Investors might benefit from the takeover premium to the market price but they also need to think about what they’re giving up in terms of future potential returns if that stock remained in their portfolio.
Why are takeovers happening?
The property and renewable energy sectors have been hotspots for investment trust takeovers this year. Both sectors had been out of favour – property because of higher interest rates and renewable energy thanks to a mixture of factors including investors losing appetite for all things green. Many stocks traded on large discounts to net asset value and that’s lured in bidders.
Takeovers are also being driven by various sub-scale investment trusts realising they either need to get bigger or admit defeat and return money to shareholders. For years the investment market has been full of sub-£200 million trusts that didn’t gain traction. Many investors, particularly institutional ones, won’t touch trusts below a certain size, so trust boards have now been forced to make hard decisions.
The step-up in activist investor activity has also put pressure on trust boards to either improve performance, narrow discounts to net asset value, or take trusts in a new strategic direction. US activist Saba was deemed a menace when it tried to drive widespread changes in the market six months ago. While its campaigns weren’t successful, they did provide a wake-up call for large parts of the investment trust industry.