Henderson Private Equity Investment Trust is to change its strategy, which will involve the orderly realisation of the portfolio over an estimated period of two years.
The board of directors and Henderson Global Investors have proposed to wind up the trust, a fund of funds currently focusing on the European mid-market buy-out sector.
Its share price is still trading on a significant discount to net asset value.
Henderson Global Investors says despite the efforts of the board and the manager to boost performance, it appears unlikely this is going to change in the short- to medium-term.
Under the proposed strategy, the manager will seek appropriate values for the underlying limited partnership interests and all other assets and aim to choose the best timing for sales.
Henderson Private Equity Investment Trust was formerly know as August Equity Trust.
In July 2007, it combined with a similar vehicle, the Rutland Trust, and was renamed New Star Private Equity Investment Trust.
Following Henderson’s takeover of New Star in April 2009, the portfolio was transferred to the former’s existing private equity fund of funds business.
The share price has recovered since May 2009 and the manager has improved the liquidity position.
But Henderson says it has proved difficult to grow the trust, which has been constrained by the discount for some time.
Generally regarded as a subscale and illiquid vehicle, the trust also continues to suffer from a historic concentration of exposure to August and Rutland.
“An orderly realisation of the company’s assets is the best strategic option to maximise value for its shareholders,” adds Henderson.
Should shareholders reject the proposed change, the board and manager will continue managing the trust with the existing strategy while trying to identify other options.