Polar Capital Global Fin Trust (LON:PCFS) was set up in 2010 with a fixed life of seven years. In advance of the expected wind-up at the early 2018 AGM, the trust is proposing a seven-year extension, changing the investment strategy to a growth mandate, and issuing zero dividend preference shares (ZDPs) to introduce gearing for the first time. It is also giving existing shareholders the opportunity to tender up to 100% of their investment at NAV minus costs (expected to be c 0.4%), as well as offering new shares to existing and new shareholders. The proposals are contingent on achieving at least £200m of assets following the tender offer and new share issue. The new, growth-focused strategy, renamed Polar Capital Global Healthcare Trust, will be c 90% invested in large-cap healthcare companies benefiting from industry consolidation, and c 10% in sub-$5bn stocks that are driving change through technological innovation.
Background to the changes
PCGH’s managers view their original investment thesis as having played out largely as expected, producing annualised share price and NAV total returns of c 13-14% since launch. With changes in the competitive landscape and growing pressure on healthcare systems in light of low economic growth and ageing populations, the managers now see opportunities in large companies benefiting from consolidation, and innovators who are disrupting markets with new technology. This leads to a broader investment focus than the previous concentration on pharmaceuticals.
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