The Schroder Asian Total Return Investment Company (ATR) has agreed to merge with fellow investment trust Pacific Assets Trust.
The proposed merger follows a strategic review of the Pacific Assets Trust.
The deal is subject to approval by shareholders of both companies and will be implemented via a scheme of reconstruction and a members’ voluntary winding up of Pacific Assets.
Under the deal, Pacific Assets shareholders will be entitled to receive new shares in ATR and/or to participate in a cash exit, limited to 25% of Pacific Assets’ issued share capital offered at a 2% discount.
Schroders said the proposed merger will provide shareholders with greater scale and liquidity.
The enlarged Asian Total Return Investment Company is expected to have a pro forma NAV of around £1.1bn, assuming the cash option under the deal is subscribed in full.
The deal also includes an agreed lower of ongoing charges. It is estimated that the ongoing charges ratio of ATR would drop to 0.65% (excluding performance fees, on an ongoing basis), compared to 0.80% in the financial year to 31 December 2025 and 1.1% for Pacific Assets in the financial year to 31 January 2026.
Schroders will continue to invest and manage the portfolio of the enlarged ATR in accordance with ATR’s existing investment objective and policy.
ATR’s investment portfolio is co-managed by Robin Parbrook and King Fuei Lee who have both been involved with managing the strategy since launch
Sarah MacAulay, chair of Schroder Asian Total Return Investment Company, said: “The proposed combination will provide shareholders with the scale and liquidity that is increasingly desired in the investment trust industry. The board believes that the proposed combination is compelling for Pacific Assets, ATR and prospective shareholders and will position ATR for future growth as the pre-eminent Asia Pacific investment company.”
Schroders took over the mandate for Asian Total Return Investment Company in 2013, having managed the underlying Asia Total Return strategy since 2007.