Independent to merge with Monks after retirement of star manager Max Ward
9 August 2022
Independent investment trust is to merge with Baillie Gifford global heavyweight Monks after the retirement of veteran fund manager Max Ward in October.
Independent (IIT ) investment trust is to merge with Baillie Gifford heavyweight Monks (MNKS ) in October after the retirement of stalwart fund manager Max Ward.
Shares in the UK equity trust, which have fallen to trade at a steep 19% discount after weaker performance in recent years, leapt 11% to 450p following news of the planned tie-up with Monks, a highly-rated global portfolio run by Ward’s former employer.
Shareholders in £210m Independent have been given the option to roll over into Monks without triggering capital gains tax or make a full cash exit at a 2% discount to net asset value (NAV), the board announced today.
The benefits of rolling over include a more diversified portfolio, with the much bigger £2.3bn Monks, managed by Baillie Gifford’s Global Alpha team led by Spencer Adair, 1
https://www.theaic.co.uk/aic/news/cityw ... r-max-ward
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Independent Inv Trust to merge with Monks
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- Lemon Quarter
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Independent Inv Trust to merge with Monks
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Re: Independent Inv Trust to merge with Monks
richfool you just beat me to it by minutes.
Doesn't really come as any surprise, the Independent Trust had long been Max Ward's 'special child'. Now he's decided to finally call it a day, I daresay BG didn't have a fund manager on the books with the time and skill-set to run the £258-million NAV valued trust.
Doesn't really come as any surprise, the Independent Trust had long been Max Ward's 'special child'. Now he's decided to finally call it a day, I daresay BG didn't have a fund manager on the books with the time and skill-set to run the £258-million NAV valued trust.
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Re: Independent Inv Trust to merge with Monks
That is very interesting and closes a chapter in a fairly tidy manner for Max Ward and his chairman Douglas Macdougall, his colleague also from Baillie Gifford. They were both big shareholders in Independent.
I think for BG it is just a useful accretion of funds and for the public shareholders it seems a sensible conclusion. Independent always had a life limited by the interest of Ward himself.
Dod
I think for BG it is just a useful accretion of funds and for the public shareholders it seems a sensible conclusion. Independent always had a life limited by the interest of Ward himself.
Dod
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Re: Independent Inv Trust to merge with Monks
Does it make Monks any more attractive, or provide an incentive to buy IT in anticipation of the rollover into Monks, I ponder?
There again, perhaps I ponder too much!
There again, perhaps I ponder too much!
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Re: Independent Inv Trust to merge with Monks
I do not see any particular benefit in buying into Independent at the moment. It is a relatively small trust so will not greatly change Monks. This is not for the benefit of third party shareholders; it is just a neat way for Max Ward and his chairman to wind up Independent. It was always their 'toy' and of course if they did not retire rich from Baillie Gifford they will now be able to retire rich by rolling over their shares in Independent with no CGT liability
Dod
Dod
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Re: Independent Inv Trust to merge with Monks
I sold my IT shares yesterday, not really keen on Monks and anything could happen between now and October, all in a SIPP so no tax considerations.
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Re: Independent Inv Trust to merge with Monks
Independent Investment Trust Circular published today for the winding up:
https://www.londonstockexchange.com/new ... r/15661440
Monks' prospectus also released today:
https://www.londonstockexchange.com/new ... s/15661434
Since the Monks share price is currently at a 10% discount to NAV the cash option at a 2% discount seems to be the better choice for Independent owners unless you wish to avoid capital gains tax implications. Though, the real discount for cash seems to be higher based on the example given with residual NAV (~3.7% discount after the 9p dividend paid to all). I don't understand where this residual NAV comes from but I presume it's after costs and based on an assumption 50% will take cash (with current management rolling over and MNKS shares being the default option this ratio seems a fair guess).
With the bid-price to NAV spread currently above 5% even for a small number of shares it doesn't seem efficient to sell in the open market. Of course, holding on for the winding up, whichever option is taken, does lead to other risks between the various dates.
Happy to hear other thoughts on this and to correct my thinking.
mm
https://www.londonstockexchange.com/new ... r/15661440
Monks' prospectus also released today:
https://www.londonstockexchange.com/new ... s/15661434
Since the Monks share price is currently at a 10% discount to NAV the cash option at a 2% discount seems to be the better choice for Independent owners unless you wish to avoid capital gains tax implications. Though, the real discount for cash seems to be higher based on the example given with residual NAV (~3.7% discount after the 9p dividend paid to all). I don't understand where this residual NAV comes from but I presume it's after costs and based on an assumption 50% will take cash (with current management rolling over and MNKS shares being the default option this ratio seems a fair guess).
With the bid-price to NAV spread currently above 5% even for a small number of shares it doesn't seem efficient to sell in the open market. Of course, holding on for the winding up, whichever option is taken, does lead to other risks between the various dates.
Happy to hear other thoughts on this and to correct my thinking.
mm
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Re: Independent Inv Trust to merge with Monks
Good enough analysis for me thanks MusingMarket. I have a small percentage of my SIPP in it so its not life changing either way but you have done enough to make up my mind for me!
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Re: Independent Inv Trust to merge with Monks
DavidM13 wrote:Good enough analysis for me thanks MusingMarket. I have a small percentage of my SIPP in it so its not life changing either way but you have done enough to make up my mind for me!
FYI I had to personally e-mail my stockbroker to get them to take up the "cash option". The default option is taking up MNKS shares aka "rollover option".
1PM on Thursday is the deadline for submission of the choice. Not sure if other brokers are being more active asking customers or charging fees etc. I've posted my e-mail below (with square brackets for custom text) on the off chance it saves someone time.
Code: Select all
Subject: Independent Investment Trust - how to elect to take the “rollover” or “cash” option?
The Independent Investment Trust (EPIC: IIT) is planning a voluntary winding up and combination with The Monks Investment Trust (EPIC: MNKS), the details of which can be found in the proposal document:
https://materials.proxyvote.com/Approved/99999Z/19840101/NOMNP_518320.PDF
[stockbroker] has sent e-mails regarding the voting for these proposals, via proxyvote.com, to me as a shareholder.
However, there has been no correspondence regarding the ability to elect to take the “Cash Option” rather than the default “Rollover Option”. This action is supposed to be taken by shareholders as detailed on page 4 of the proposal document linked to above.
Is there a process for shareholders through [stockbroker] to elect to take the cash option? Pages 21 and 22 of the proposal document (linked above) goes through the process of how to do this but this seems a job for you as the stockbroker since it gets into the weeds of CREST membership and TTE instructions.
For the record I currently hold [x] shares through [stockbroker] and wish to elect fully for the Cash Option.
Regards,
[Name]
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Re: Independent Inv Trust to merge with Monks
A little housecleaning for any confused shareholders: IITA (IIT option "A" rights which rolls over into Monks) and IIB (IIT "B" rights the cash option) tickers have been introduced temporarily and show up on the londonstockexchange website today. This is in-line with the timetable. Unsurprisingly there has been no trading. No NAV news release since the third also makes sense since close on the 2nd November was the calculation date.
Personally I received my pre-liquidation dividend on the fourth as stated in the calendar of events (obviously different brokers may payout a little later as with any dividend it'll be worth chasing up if it hasn't been paid to you soon).
The second general meeting, and announcement of fair and cash asset values along with fair NAV ratio to Monks shares should all happen tomorrow (8th November).
Personally I received my pre-liquidation dividend on the fourth as stated in the calendar of events (obviously different brokers may payout a little later as with any dividend it'll be worth chasing up if it hasn't been paid to you soon).
The second general meeting, and announcement of fair and cash asset values along with fair NAV ratio to Monks shares should all happen tomorrow (8th November).
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Re: Independent Inv Trust to merge with Monks
Having taken the share option, I've received a small cash payment under the heading "scheme of arrangement". Presumably to do with fractional shares.
I'm guessing the tax treatment is to subtract it from the book cost for a CGT calculation in the future when the Monks holding is eventually sold
I'm guessing the tax treatment is to subtract it from the book cost for a CGT calculation in the future when the Monks holding is eventually sold
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Re: Independent Inv Trust to merge with Monks
Alaric wrote:Having taken the share option, I've received a small cash payment under the heading "scheme of arrangement". Presumably to do with fractional shares.
I'm guessing the tax treatment is to subtract it from the book cost for a CGT calculation in the future when the Monks holding is eventually sold
That is what I would do although I suppose it is possible that a small part of that small cash amount actually represents a capital gain. But I cannot see the taxman caring.
In the new emerging tax environment that is unfriendly to investment profits, Monks at least has the virtue of having a very low dividend yield - about one quarter of one percent. In fact BG trusts in general sport low or no yields e.g. Edinburgh Worldwide, BG Shin Nippon, BG US Growth, Scottish Mortgage etc.
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Re: Independent Inv Trust to merge with Monks
Lootman wrote:Alaric wrote:Having taken the share option, I've received a small cash payment under the heading "scheme of arrangement". Presumably to do with fractional shares.
I'm guessing the tax treatment is to subtract it from the book cost for a CGT calculation in the future when the Monks holding is eventually sold
That is what I would do although I suppose it is possible that a small part of that small cash amount actually represents a capital gain. But I cannot see the taxman caring.
In the new emerging tax environment that is unfriendly to investment profits, Monks at least has the virtue of having a very low dividend yield - about one quarter of one percent. In fact BG trusts in general sport low or no yields e.g. Edinburgh Worldwide, BG Shin Nippon, BG US Growth, Scottish Mortgage etc.
Yes. They are very much a ‘growth’ house and always have been I think. Not good for them in the curr3nt climate. Although I think that 2023 may be better.
Dod
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