A record year for mergers and buybacks in investment trusts

Richard Stone | Supplied

The number of mergers completed in the year was twice the number completed in 2021 (five), which was the previous record. Seven investment trusts were acquired during 2024.

A total of 32 investment trusts changed their fees during the year to benefit shareholders, compared to 26 in 2023. Two manager changes took place in 2024.

The discount of the average investment trust excluding 3i was 13.7 per cent at the beginning of the year, widening to 15.2 per cent by 31 December 2024.

It was a record year for share buybacks, with £7.5 billion of shares repurchased in 2024 according to Morningstar. This compares to buybacks of £3.9bn during 2023 – the previous record.

Investment trusts paid out a total of £6.48bn in dividends in 2024. Overall industry assets were £266bn at the end of December, an increase from £260bn at the beginning of the year driven by strong performance.

Fundraising by existing investment trusts (called secondary fundraising) totalled £845m, down from £1.1bn in 2023. There were no investment trust IPOs in 2024.

Richard Stone, chief executive of the AIC, said: “Discounts remained wide last year, prompting boards to take action. We saw a record number of mergers, record share buybacks and 32 investment trusts cut their fees.

“So far this century, investment trusts have weathered the financial crisis, the dotcom bust and a global pandemic. As we look forward, we will continue to see the investment trust industry innovate and adapt to meet investors’ needs.”