Discounts in the investment trust sector in late October reached their widest point since the Black ...
Discounts in the investment trust sector in late October reached their widest point since the Black Monday equity crash of 1987.
Iimia head of investment trusts Nick Greenwood said as a result, the investment trust sector has started to attract opportunistic and strategic investors. He added it is unsurprising shrewd buying is showing up in exchange announcements.
In particular, Deutsche Bank AG has built up significant holdings in 11 ranges of trusts that were standing on unsustainably wide discounts at the time of purchase ' above 40% in five cases.
Greenwood believes the majority of the Deutsche positions are probably controlled by Lars Bader, who operates from New York.
'While not necessarily hostile, such lumpy positions bought cheaply could be sold into more aggressive hands,' he said.
The trusts include Martin Currie Capital Return, Electra, Resources Investment Trust, Undervalued Assets, Wigmore Property Trust, Intrinsic Value, Invesco English and International, Candover, Amerindo Internet, 3i Bioscience and Rutland Trust.
Analysts have forecast an increase in hostile takeovers or greenmail-style moves following a series of successful arbitrage plays in recent months, such as those by specialist investment firm Laxey Partners, which forced a reconstruction of Baring Emerging Europe.
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