Two JPMorgan Japan funds unveil tie-up, TRIG triggers buyback programme, Triple Point Social Housing keeps credit rating, while Henderson Smaller Companies makes it 21 years in a row of dividend increases.

ByFrank Buhagiar

Two more JPMorgan funds to tie up

JPMorgan Japan Small Cap Growth & Income (JSGI) and JPMorgan Japanese (JFJ), the latest two JPMorgan investment companies to propose joining forces. As per JSGI’s press release, “JSGI’s assets will be rolled into JFJ in exchange for the issue of new JFJ shares to the continuing JSGI shareholders.” JSGI shareholders will be entitled to realise up to 25% of their JSGI holding for cash. Lots of reasons cited for the merger – broad all-cap strategy; increased scale; and reduced fees and costs.

JSGI Chair, Alexa Henderson, and the board believe “the proposed combination will provide continuity of investment process and philosophy within a broader market opportunity. The proposed combination will provide a much larger investment trust with significantly lower costs for shareholders.”

Winterflood: “With JFJ trading at an 8.8% discount, and JSGI at a 13.5% discount, JSGI shareholders should expect to receive an uplift following completion. Finally, the scale benefits of the combination cannot be overlooked, especially given reduced management fees and ongoing costs, at a time when costs are at the forefront of many investors’ minds, and greater liquidity, when there exist too many sub-scale funds within the sector.”

The Renewables Infrastructure Group joins the buyback pack

The Renewables Infrastructure Group (TRIG) announced a £50million share buyback programme following progress made with the fund’s capital allocation strategy. This includes reducing TRIG’s Revolving Credit Facility (‘RCF’) to c. £150m during 2024. “Based on current cash flow projections, divestments agreed to date, and assuming that c. £25m of the buyback programme is completed in 2024, RCF drawings would reduce from £364m at 31 December 2023 to c.£220m at 31 December 2024.” That’s not all. Additional disposals are in the pipeline as well as portfolio-level financing opportunities that will further reduce RCF drawings as well as “create greater capacity for future investment activities.”

Liberum: “TRIG has increasingly appeared as an outlier in the sector for not having an active repurchase programme so this is a welcome development. Given its size, and the very strong capital allocation argument for repurchasing shares at the discounts it has traded at, we think the market has been disappointed with the lack of a programme to-date.” Appears the market can cast aside its disappointment now!

Triple Point Social Housing maintains credit rating

Triple Point Social Housing (SOHO) put out a press release announcing that Fitch Ratings has reaffirmed the existing Investment Grade, long-term Issuer Default Rating of ‘A-‘ and a senior secured rating of ‘A’ for the Group’s existing loan notes. That’s the same as the ratings given by Fitch first time round in August 2021.

There has been a change in outlook from stable to negative though “to reflect prolonged rent arrears from two Registered Providers, and the risk that the independent review of the investment management arrangements could result in a change of investment manager.” Thanks for the heads up, Fitch!

Dividend Watch

Henderson Smaller Companies (HSL) is on course to raise its annual dividend for 21 consecutive years. This follows the board’s proposal to increase the final dividend to 19.5p per share. Add that to the 7.5p interim dividend and the total payout for the year comes to 27.0p per share. That’s a 3.8% increase on 2023’s 26.0p per share. “This dividend will be fully funded from current year revenues. As an ‘AIC Dividend Hero’, this will be our 21st consecutive year of growth in the annual dividend.”