Doceo Fund Monitor

The Fund Monitor

Asia Dragon (DGN) and Invesco Asia (IAT) plan to merge, with DGN winding up and transferring assets to IAT. If approved, the combined fund, rebranded as Invesco Asia Dragon, will be the second-largest Asia Pacific equity trust. Gulf Investment Fund (GIF) will liquidate, with trading suspended after 99.6% shareholder approval. Meanwhile, Baillie Gifford Japan (BGFD) cuts fees.

By Frank Buhagiar

Asia Dragon and Invesco Asia to tie the knot

 Asia Dragon (DGN) and Invesco Asia (IAT) become the latest investment companies to announce they are combining. This follows the completion of a strategic review by DGN which considered a wide range of options including entering into a combination with another investment trust. In the end, “The Board was impressed by the distinctive and disciplined value-oriented investment approach employed by Invesco Fund Managers Limited which has delivered attractive returns for Invesco Asia shareholders over the long term.”

If approved by both sets of shareholders, DGN will be wound up with its assets transferred to IAT in exchange for new shares in the enlarged Invesco fund – the transaction will include a partial cash exit opportunity for up to 25% of DGN’s issued share capital. There will be a name change too. Invesco Asia will become Invesco Asia Dragon.

Winterflood: “We note that it is relatively uncommon for a fund to merge into a vehicle that is a third of its size (hence, full cash exit take up may result in limited scale benefits) but the enlarged IAT will nevertheless be well beyond what most would consider ‘sub-scale’. Given the shareholder overlap and commitments received, we see no reason for this merger to fail to obtain approval.”

Numis: “The board of IAT is seeking to make IAT the ‘go-to’ Asian trust, with a premium rating to grow organically and through further combinations. The combined assets of c.£815m will make it the second largest IC in the Asia Pacific – Equity sector, behind Schroder AsiaPacific (£909m net assets). To achieve its aims, we believe Invesco Asia will need to raise its profile.”

Gulf Investment Fund to wind up

Gulf Investment Fund (GIF) shareholders voted to wind up and liquidate the company at the Extraordinary General Meeting held on 29 October 2024 – 99.6% of shareholders voted in favour. No hanging about. As per the press release, the shares were suspended from trading at 7:30 a.m. on 29 October 2024 and just a day later the admission to trading of the ordinary shares on the Specialist Fund Segment was cancelled. PricewaterhouseCoopers LLC has also been appointed as the liquidator of the company to action the wind-up.

Baillie Gifford Japan lowers fees

Baillie Gifford Japan (BGFD) is the latest fund to announce changes to its fee structure. As per the latest full-year results, as from 1 September 2024, the first tier of the investment management fee structure, the 0.75% fee rate on the first £50m of net assets, is to be removed. As a result, the fee payable to the managers is now 0.65% on the first £250m of net assets and 0.55% on the remaining net assets. This translates into an annual saving of £50,000 for the company. Every little bit helps.