Fifth of Polar Capital healthcare investors to exit at NAV

Healthcare generic

The Polar Capital Global Healthcare Growth and Income trust is to lose more than a fifth of assets under management as it offers shareholders the opportunity to sell out at NAV minus costs.

However, 78.2 per cent of investors opted to remain invested in the fund when new shares are offered, equating to £195.4m.

The investment trust is also shifting its focus from income to growth as it prepares for a new placement to be announced on 16 June.

This will involve a concentrated portfolio of 25-30 large-cap companies from across global healthcare sectors, and 10-20 innovative smaller companies, according to an Edison research note.

It will be renamed the Polar Capital Global Healthcare trust with the current dividend yield of circa 2 per cent expected to fall to approximately 1 per cent under the growth-focused strategy.

At the close of business on 31 May, shares were trading at a 1.7 per cent discount to NAV.

The trust has delivered beyond its aim of doubling shareholder money over seven years, says John Regnier-Wilson, head of investment trust sales and marketing at Polar Capital.

Regarding the change in investment strategy, Regnier-Wilson says the pendulum has swung from income generation to the search for growth, “which is increasingly scarce”.

Fund manager Dan Mahony says the importance of delivering better healthcare is evident from the three major UK political parties putting the NHS front and centre of their election campaigns. 

“The status quo cannot continue and we have to allow technology to disrupt the sector and transform the way that healthcare is managed, delivered and paid for.  This will change the competitive structure of the industry and creates investment opportunities that extend well beyond the familiar pharmaceutical companies.

“Successful companies can be divided into two categories. The consolidators – large companies that recognise and adapt to change, resulting in stable earnings and cash flow growth and compounding investment returns. Then the innovators – smaller companies with new products, services or business models that drive disruption.”