Abrdn is to reinvest an amount equal to six months’ worth of management fees into all of its UK-listed investment companies.
The firm, which is the third-largest manager of investment trusts in the UK in terms of AUM, said the investments will be made “as and when” the relevant fees are received on each mandate. The overall amount reinvested will equate to more than £30m, according to estimates.
Abrdn already reinvests 25% of management fees into Tritax Big Box REIT and 10% in Tritax EuroBox, but the move – which is subject to regulatory approval – will see the firm reinvest across its full range in what it believes to be “an industry first”.
This amounts to reinvesting in 11 equity trusts, five real estate investment trusts (including both Tritax companies, which it will invest into additionally) and one multi-asset portfolio – the Abrdn Diversified Income and Growth Trust. It has currently not included the Abrdn Private Equity Opportunity Trust, which is reconsidering its investment manager following the firm’s sale of its private equity business; nor the Abrdn China Investment Company, which is set to become part of Fidelity China Special Situations.
Christian Pittard, Abrdn’s head of listed funds, said: “We strongly believe in the significant underlying value of our investment trust range. This initiative underpins our firm commitment and long-term optimism in both the investment company business and the value of the underlying assets in Abrdn’s range.
“We also believe this initiative across the full range is good practice during a time of particular challenge for the UK’s closed-ended fund sector and builds upon similar practices seen at an individual trust level, both at Abrdn and elsewhere.”
He added that, while there has been “much narrative” on potential buying opportunities among investment trusts, given historically wide discounts to their net asset values, the move also “aligns [Abrdn] more closely with existing shareholders of the funds we manage”.
“This initiative demonstrates our strong advocacy for the integrity of the UK’s listed investment trust sector, with its unique structure and independent boards of directors to represent shareholder interests.”