The F&C Investments managed trust said the trend had been the main driver of its gains as it revealed its 2014 annual results today.
Net asset value total return per share rose 7.7% in sterling terms, 15.3% in euros. This meant the trust beat its chosen benchmark, the Euromoney Smaller European Companies (ex UK) Index, which returned -1.9% in sterling, 5.2% in euro.
Over the past three years the trust has recorded NAV total return per share of 90.2% in sterling terms, 104.7% in euro, compared to the benchmark return of 57.7%, 69.8% in euro.
The trust’s dividend pay-out for 2015 has been set at 8.5%, or 0.7581 euro per share.
Four takeover bids appearing in rapid succession last year were a big part of the returns made by the trust.
These were IAG’s bid for Irish airline Aer Lingus, a bid from Orange for Spanish broadband supplier Jazztel, a private equity firm bidding for Dutch software company Exact and nutrition business Nutreco also becoming a private equity target.
“2015 has started strongly for European equities,” said manager Sam Cosh. “The latest European Central Bank intervention and announcement of quantitative easing, combined with a decent result from the Purchasing Manager’s Index, has helped to renew some optimism in the region.
“Heading into the year though, expectations for European economic growth, and corporate earnings progress, were excessively low. This was reflected in the strong performance of quality assets in the second half of last year, as investors searched for a combination of scarce growth and yield,” Cosh added.
