Banking

Board of ScotGems trust put forward liquidation proposals

These proposals, if approved, would mean a full cash exit for shareholders less the costs.

The board has been considering options since early March when alternative investment fund manager First Sentier resigned after the managers purchased a Russian company on the day of the invasion of Ukraine.

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By May, the board said it had considered the future of the company but wanted to continue to consult with shareholders.

The board intends to instruct First Sentier, which said it would remain managing the fund for a maximum six month period post resignation, to realise the portfolio of the company in an “orderly manner”.

“The exact timing of such liquidation will depend on market conditions,” the company said in a stock exchange statement on 1 July. The board will then convene a meeting at which a special resolution to approve the members’ voluntary liquidation will be proposed.

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The trust has performed better than both its index and peers so far this year (until 1 July). It returned 3.7% in the period, according to FE fundinfo, while the AIC Global Emerging Markets sector was down 10.5% and the MSCI Emerging Markets Small Cap TR index was down almost 11%.

However, it has struggled with its discount, which sits at 14.4%, according to Morningstar data.

Gavin Trodd and Ewan Lovett-Turner, analysts at Numis, said in a note the announcement came as “no surprise” and added the market cap of the trust means it was “subscale” and “off the radar of many investors”.

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