Beta Global Emerging Markets expects to take up to a year to wind up its portfolio, which invests in...
Beta Global Emerging Markets expects to take up to a year to wind up its portfolio, which invests in some of the world's smaller and more illiquid markets including the Ivory Coast and Papua New Guinea.
The board is currently seeking a final extraordinary general meeting with shareholders at which the exact terms of the wind up will be finalised. In essence the trust aims to liquidate up to 75% of the portfolio within three months with the remainder taking up to a year.
Peter Scott, manager of the trust, said: "This will not be a fire sale, we will be winding the fund up through an orderly realisation of the company's investments which we hope will prove cost effective, efficient and rapid."
The trust has holdings in Latin America, The Middle East, Asia and Eastern Europe including Russia but also has exposure to markets such as Vietnam and Estonia.
Scott attributed the demand for a wind-up to the consolidation of the investment trust sector and among financial institutions.
He said: "The problem was caused for our fund by the merger of a number of our major shareholders with large companies.
"The companies that took over do not use investment trusts as a vehicle so were effectively left with an investment they did not want. I also believe that emerging markets are simply not in fashion at present."
The trust's objective is to maximise capital growth and its shares do not pay significant dividends. The board first acknowledged the growing desire of shareholders to leave the trust in mid October when it announced it was considering the options available to it.
On 3 November, the board announced proposals for the liquidation of the trust, after refusing a proposal put forward by the Fleming Emerging Markets investment trust (FEMIT) offering shareholders the opportunity to transfer their holdings into FEMIT.
Scott said: "We chose to turn down the offer from Flemings purely because there is no better way to provide our shareholders with money than through a self liquidation. Our advisers consulted the shareholders to find out if they wanted some kind of vehicle to continue their investment or if they would prefer cash.
"A substantial minority wanted to continue their investment, but the majority wanted cash so we chose a liquidation as the most efficient way of providing this."
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