Activity among investment trusts ramps up amid discount control mechanisms

Investment trust boards actively addressed double-digit discounts in the first half of 2025 with two mergers, four acquisitions and 11 liquidations so far this year.

Share buybacks reached £4.8bn, 32% higher than in the first six months of 2024 when the figure sat at £3.6bn, according to data from the Association of Investment Companies.

The average industry discount now sits at 13.9%, as at 30 June, compared to 15.3% at the end of 2024.

Other activity included the IPO of Achilles Investment Company, which raised £54m, and secondary fundraising by existing investment trusts, which totalled £221m, largely due to the £85m raised by the Debt – Loans and Bonds sector.

Two trusts changed their manager and 19 trusts changed their fees to benefit shareholders.

Meanwhile two mergers were completed in H1 with an additional two proposed during the last six months. These are a merger between the European Smaller Companies trust and the European Assets trust and a merger between the Fidelity European trust and the Henderson European trust. If approved, both mergers are expected to complete before the end of the year.

Richard Stone, AIC chief executive, said: “It has been a whirlwind half-year even exceeding the busy first half of 2024. There have been 17 mergers, acquisitions and liquidations, versus nine in the same period last year, and share buybacks are nearly a third higher.

“Boards have been engaging with shareholders and considering all options to maximise value – we have seen 19 fee changes to benefit shareholders in the past six months.”