Investors Capital Trust announce rollover success

Investors Capital Trust plc, the investment trust managed by F&C in Edinburgh, has today announced that it has broken recent records for similar-type investment trust roll-overs.

Following overwhelming shareholder approval at an Extraordinary General Meeting in Edinburgh the company reported that some 62 per cent of shareholders' funds will roll-over into the new company, to be re-named Investors Capital Trust, rather than cash out at the scheduled 28 February winding-up of the existing company.

The new Investors Capital Trust, which will continue to be managed by Rodger McNair, will have total assets of approximately £174 million. The portfolio will be invested in UK equities and in higher yielding assets such as corporate bonds, initially in the proportion 80%:20%.

The capital structure of the new company, which chairman Martin Haldane describes as "innovative yet simple" found strong favour with investors. The new company has two classes of share – A and B – which will have the same entitlements as to net asset value and in other respects. The only difference between the two share classes is that the A shares carry a right to participate in dividends while the B shares carry a right to receive a capital return at the same time as, and in an amount equal to, each dividend paid in respect of the A shares. Investors Capital Trust is targeting an initial annual dividend and capital return of 5.35 per cent per annum.

"As brokers have previously pointed out, in recent years trusts facing wind-ups have managed to roll-over around 30-40 per cent of their assets, so this is a fantastic achievement. We were confident that investors would approve of the new structure which enabled them to choose an appropriate share class to suit their needs and tax circumstances. However, this level of endorsement surpasses our expectations," said Mike Woodward, Head of Investment Trusts at F&C.