Troy Income & Growth trust (TIGT) has agreed heads of terms with the board of the £198.8m STS Global Income and Growth over a potential merger.
Under the agreement, the £152m TIGT will fold into the enlarged STS trust.
The vehicle will continue to be managed by Troy Asset Management with James Harries continuing as lead manager, supported by Tomasz Boniek and the wider Troy investment team.
The TIGT board said in a stock exchange announcement this morning (28 November) that it anticipates the scheme to complete by the end of March 2024, should it be approved by shareholders of both trusts.
Troy will reduce its annual management fee to 55bps of shareholders’ funds up to £250m and 50bps above £250m.
TIGT chair Bridget Guerin said: “The board is pleased to have reached an agreement with the board of STS over the proposed combination of the two companies.
“The combination will create a larger investment trust that is expected to be more liquid and have reduced overall costs, and will continue to follow Troy’s long-term, quality focused, conservative investment management style with a global opportunity set.”
Launched in 2005, STS is currently trading at a 0.42% discount to NAV, according to the Association of Investment Companies.
The news follows a similar announcement on 2 November, when the TIGT board revealed it had suspended its discount control mechanism ahead of a possible merger with another investment trust.