The letter - end missing16 Apr 2026 07:27
The letter. End bit cut off.
With regards to your publication of the recent annual report regarding GPM, you state that "The Directors place a great deal of importance on communication with shareholders".
I am a significant shareholder of GPM through a broker nominee account. After the retirement of Mr Birch, I will hold more shares than the rest of the board combined. Therefore although I am only a private shareholder, my holding is more significant than that of the entire future board. I am writing specifically to give my comments about the board strategy and would like a response from them and not the investment manager.
The trust has the good fortune to be investing in a sector which has performed very strongly. Therefore the fact that the trust has had a persistently high NAV discount over the last 12 months is extremely disappointing. The HL website states that the NAV discount has had an average NAV discount of 16.7% over the last 12 months and currently has a discount stated of 22.8%. At times in the last 12 months, the discount has been close to 30%. In a weaker asset environment I suspect that this discount would widen more. Therefore if the discount is so wide in a strong market, I cannot see it narrowing with the current board strategy. This strategy needs an urgent reconsideration.
As a shareholder, I buy and sell the stock price, not the underlying NAV. The stock price is faring no better than ETFs such as GDX, GDXJ or the UK equivalents of these. It would appear that there is no point in paying for active management when an ETF can provide similar, if not better, returns.
The current company documentation does not appear to include regular votes on whether to continue the company as a going concern, or whether to crystallise the value of the company's assets through a members' voluntary liquidation. For the board to hold any authority in the persistence of such a wide average discount, you need to add such a resolution to the matters on the AGM agenda. If not, I will give my support to any outside institution that holds the statutory holding in the company requisite to force this matter upon you as the current board.
Additionally, the yearly subscription offer does not appear to be having any direct effect on the long term NAV discount and as such, does not appear to be benefitting me as a shareholder. It strikes me that the mechanics of this offer primarily allow for greater fees to be charged, rather than greater shareholder equity. I believe you should also consider having a vote regarding cancelling the subscription offer at the AGM and replacing this with a NAV reduction strategy urgently.
Times are changing. In the past, boards could away with shoddy performance if they had the backing of corporate shareholders. With the advent of voting for nominee shareholders and the presence of social media (which can co-ordinate private investor action), it is likely that the current board may attract significant vote
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