A US investor has initiated a 5% stake in Alexander Darwall’s European Opportunities Trust as its discount continues to languish following his failed investment in Wirecard.
The closed-ended fund specialist, 1607 Capital Partners, initiated the position on 20 August, at which point the trust was trading around 684p.
Darwell’s investment trust, which has a market cap of £769m, is currently trading at a discount of 10.3%. That compares to an average discount of 6.3% over the last 12 months, according to Hargreaves Lansdown data.
Wirecard had been the largest holding in Darwall’s portfolio when auditors for the German payments business refused to sign off its accounts in mid June because they could not confirm the existence of €1.9bn (£1.7bn) in cash balances. Shares in the European Investment Trust dropped over 11% on the news.
Although shares rebounded when it was revealed Darwall had been able to dispose of his entire stake in the company, the investment trust’s discount has failed to reach its pre-Covid levels when it moved to around 5% and at times matched the NAV.
Nevertheless, Stifel reiterated its positive rating on the investment trust in early July stating Darwall would be driven to regain his reputation, particularly as he only established his investment boutique, Devon Equity Management, in July 2019.
Now that Wirecard is no longer in the portfolio Experian and Novo Nordisk now represent the chunkiest weightings at 10.3% and 10.2% respectively.
See also: Alexander Darwall trust retains positive analyst rating mere weeks after Wirecard blow up
