Merger to create ‘flagship’ European investment trust

Investment trust corporate activity continues as the UK’s two largest European investment trusts propose a merger.

Fidelity European Trust (LON:FEV), the largest UK investment trust to focus on the European market, has today announced a proposed merger with the second-largest, Henderson European Trust (LON:HET). The two trusts have market caps of £1.64 billion and £587.3 million respectively, as of close of trading on 18 June – making them the largest European investment trusts in the UK by this metric.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don’t miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

“The Board of Fidelity European Trust believes this is an exciting opportunity, with compelling benefits for both sets of shareholders, to create the ‘go to trust’ for investing in Europe,” said Davina Walter, chair of Fidelity European Trust. “The proposals will result in the company being well-positioned to continue to deliver attractive returns, with new and existing shareholders benefitting from a reduced management fee and lower ongoing costs ratio.”

“The sudden departure of the company’s two co-portfolio managers, together with our subsequent engagement with shareholders, prompted the Board to undertake a comprehensive review aimed at maximising value for all shareholders over the long-term,” said Vicky Hastings, chair of Henderson European Trust. “Following a full and thorough process, the Board concluded that a combination with FEV represents the best outcome for our shareholders.”