20 Oct 2021 07:00
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION FOR WHICH THE SAME COULD BE UNLAWFUL.
The information communicated in this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain.
JPMorgan European Investment Trust Plc
Company Update
Legal Entity Identifier: 549300D8SPJFHBDGXS57
20th October 2021
The Board of JPMorgan European Investment Trust Plc (the "Company") stated in its annual report for the financial year ended 31 March 2021 that it was continuing to work with its investment manager, JPMorgan Asset Management (UK) Limited (the "Investment Manager"), to determine whether the Company provides a model which will provide a sustainable attractive return for the longer term.
The Board has now concluded a review of the Company and its strategy, which included considering various options to improve marketability and to broaden the appeal of the Company as well as to improve liquidity and to narrow the discount at which the Company's shares trade. The Board believes there remains a strong case for investment in Europe, with the broad universe of European equities providing quality diversification for UK investors. However, the Board is of the view that the Company's existing dual share class structure is unnecessarily complex and potentially presents a hurdle to those looking to invest. The Board believes that a single share class with a clearly defined investment process would enable a cogent investment approach and increase the Company's appeal.
The Board has therefore determined that it would be in the best interests of shareholders to consolidate the Company's Income Shares and Growth Shares into a single class of ordinary shares (the "New Ordinary Shares") (the "Consolidation"). The investment objective and investment policy of the New Ordinary Shares will be the same as that of the Company's Growth Shares, reflecting the Board's confidence in the Investment Manager's strength and depth of team, as well as its track record, which has performed strongly against the Company's benchmark and peers over the last 2 years being a particularly challenging period for active managers. Looking longer term, the Company has also outperformed its benchmark over 5 and 10 years.
The Consolidation will create a company with net assets of approximately £500m and should ensure the critical mass needed to attract investors - it is also expected that the increased size will have a beneficial impact on liquidity, which is expected to have an additional positive impact on the discount of the New Ordinary Shares. Conditional on the Consolidation, which requires the approval of the Company's shareholders, the Board also intends to introduce the following features which it believes will further appeal to investors:
1. Introduction of an enhanced income strategy to target a dividend of 4% p.a. (based on the net asset value of the New Ordinary Shares as at the end of the preceding financial year) - such strategy is differentiated to other European investment companies and makes use of the closed-ended structure;
2. Adoption of an active discount management policy with a commitment to keep any discount on the New Ordinary Shares to single digit levels, in normal market conditions;
3. Introduction of a performance-related tender offer - if NAV total return performance is behind the Company's benchmark (the MSCI Europe ex UK Index (total return) in sterling terms) over a five year period from Consolidation, a tender offer will be made for up to 25% of the outstanding share capital at NAV less costs;
4. Lower management fees - a reduced fee calculated on net assets of 0.55% p.a. up to £400m, 0.4% p.a. thereafter;
5. Reduction of the notice period to 6 months (from 12 months at present); and
6. Change of the Company's name to JPMorgan European Growth & Income plc, with the New Ordinary shares trading under a new ticker, JEGI.
The Company has consulted with shareholders representing material interests in both the Income Shares and the Growth Shares and they have indicated their support for these proposals. The Company expects to publish a circular and notice of meeting(s) in connection with the Consolidation in due course and aims, subject to approval of the Company's shareholders, to conclude the Consolidation and to introduce the above features by late 2021/early 2022.
For further information please contact:
JPMorgan Funds Limited
Tim Mitchell - 0207 742 8879
Winterflood Securities LimitedNeil Morgan - 020 3100 0292
The person responsible for arranging for the release of this announcement on behalf of the Company is Paul Winship of JPMorgan Funds Limited.