Merger is a ‘good move for both sets of shareholders’, says F&C’s Cane

F&C Management’s Julian Cane has managed both trusts since March 1997. FCIIT total assets at February 28 are estimated at £100m, with FIGIT having £68m. Cane says: “It is a good move for both sets of shareholders; it will make both companies more cost-efficient.”

The trusts have similar mandates and current investment profiles. The top three holdings of BP, GlaxoSmithKline, and Shell Transport & Trading are exactly the same for both trusts, but with different weightings.

Sector allocation is also similar, both trusts having 29% of assets in financials stocks, their biggest sector exposure. Four banks appear in both trusts’ top 10 companies.

Cane explains that the main difference between the two trusts is that FCIIT invests a portion of assets in European stocks, whereas FIGIT invests solely in British companies. He intends to continue FCIIT’s exposure to Europe (currently 8% of the portfolio) post-merger.

Approval for the merger will be sought at a meeting for shareholders of the trusts on April 11. Following the merger, FIGIT will go into liquidation with FCIIT acquiring the FIGIT investment portfolio.