French Property Trust, the UK investment trust that invests European property shares, is to be wound up with shareholders’ investments being transferred to another vehicle.
The fund, which is managed by Ivory & Sime Asset Management, has been trading at a wide discount to net asset, most usually between 20% and 22%. This has prompted ISAM to look at options to increase shareholder value with assistance from its financial advisors Intelli Corporate Finance.
The main option, which has been informally agreed by shareholders but needs to be voted on at an extraordinary general meeting, is to transfer shareholders’ investments to another ISAM-managed vehicle. The vehicle is a Luxembourg open-ended investment company called The European Asset Value Fund.
ISAM is able to transfer the shareholders’ investments tax efficiently, allowing shareholders to receive an aggregate NAV equal to 99% of the NAV of their ordinary shares. The fund is currently capitalised at £34m. When the investments are rolled into EAVF, the fund will grow to between £55m and £60m.
As an open-ended vehicle, it will trade at NAV and will enable ISAM to widen its shareholder base and grow the fund. EAVF will adjust its strategy to concentrate on property companies, property-related companies and investment holding companies, with a bias towards France.
Mark Townsend of ISAM expected around 70% of the fund to be invested in property shares. The fund has holdings in Sweden, Spain, Portugal and Italy and is also keen to look at opportunities in Belgium, Switzerland and Germany.
The transfer is expected to take place in January pending shareholder approval.
