Scottish Investment Trust
Company Notes
Proposed merger with JPMorgan Global Growth & Income
This morning the Boards of Scottish Investment Trust and JPMorgan Global Growth & Income* announced that they had signed heads of terms for a proposed combination between their respective funds. This followed a strategic review by the Board of Scottish Investment Trust, which was originally announced in June. The combination will be effected by way of a section 110 scheme of reconstruction by Scottish Investment Trust and a transfer of assets to JPMorgan Global Growth & Income on a FAV for FAV basis, with shareholders in Scottish Investment Trust receiving newly issued shares.
The enlarged entity will have net assets in excess of £1.2bn and is therefore expected to benefit from greater economies of scale, including better liquidity in its shares and cost efficiencies. A new tiered management fee structure is expected to generate a reduction in ongoing fees of 11bps, which includes fixed costs being spread across a larger asset base. In addition, JPMorgan has agreed to make a contribution to costs in an amount equivalent to eight months of the management fee payable by the enlarged vehicle. The proposals are subject to approval from both sets of shareholders, and a timetable and further details will be announced in due course. The scheme is expected to close in the first quarter of next year.
*Denotes a corporate broking client of Winterflood Securities
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