Keystone Positive Change considers merger with open-ended equivalent; Gulf Investment Fund proposes a wind up; and PRS Reit makes up with its shareholders.

Frank Buhagiar

Keystone Positive Change Looking to Scale up

Keystone Positive Change (KPC) announced it’s considering implementing a transaction in the near term to address the size of the Company, the low liquidity in the Company’s shares and the discount at which they have been trading, while enabling Shareholders to retain exposure to a global impact strategy. Might sound like that’s a lot to achieve in one transaction, but among the options being considered by the Board is rolling the fund’s assets into the £1.8 billion Baillie Gifford Positive Change Fund, an FCA authorised open-ended investment company. One advantage here is that the two Baillie Gifford funds are “substantially” invested in the same portfolio of listed equities.

The Board is seeking shareholder feedback on the potential rollover. Activist investor and 17% shareholder Saba Capital presumably will be among those providing feedback, that is if they haven’t already.

JPMorgan: “a rollover into the open-ended version of the strategy makes sense in that it would eliminate the discount, and enable those who believe in the strategy to remain invested. But we would expect a 100% cash exit to be offered alongside a rollover option.”

Gulf Investment Fund Wind up on the Cards

Gulf Investment Fund’s (GIF) Board intends to put forward proposals to shareholders to wind up the company. As per the fund’s press release, this follows the launch of a tender offer for up to 100% of each shareholder’s holding in the company. Problem is, the tender appears to have been so popular that the fund received irrevocable commitments covering so many shares that if accepted would have resulted in “the minimum size condition in respect of the Tender Offer (being a post Tender Offer share capital of not less than 38,000,000 Shares) not being met.” Because of this, the tender will no longer proceed. Hence the wind-up proposal.

PRS Reit Makes up with Shareholders

PRS Reit (PRSR) has settled its differences with the shareholders who recently called for a general meeting to be held. The requisitioners wanted shareholders to be given the opportunity to vote on resolutions calling for two directors, including the current chairman, to be replaced with Robert Naylor and Christopher Mills, both of Hipgnosis Songs sale fame. A week, clearly a long time in the investment trust world for the build-to-rent REIT announced an agreement has since been reached that will see the requisitioners withdraw their Requisition Notice.

In return, Robert Naylor and Christopher Mills will be appointed to the Board as non-executive directors while current Chairman, Steve Smith, who was nearing the end of his term anyway, will step down and be replaced, on an interim basis, by Senior Independent Director, Geeta Nanda.

Winterflood: “This appears to be a positive outcome for PRSR shareholders, with most of the changes proposed by the requisitioning shareholders, which clearly had the support of a significant number of institutional investors, being implemented by the Board without the need for convening a GM, thereby saving some costs. Robert Naylor and Christopher Mills have notable experience in extracting shareholder value after being appointed to investment trust Boards, for example conducting the sale of Hipgnosis Songs Fund (SONG) to Blackstone earlier this year. We therefore expect them to have a significant impact on the upcoming strategy review.” Just goes to show, it’s good to talk.