Downing Strategic Micro-Cap Investment Trust PLC on Thursday reported a drop in net asset value as it said it was planning an orderly wind-up of the company.
The investment trust said its net asset value at August 31 was 71.57 pence, down 8.2% from 77.99 pence at February 28. This compared to a 13% decrease in the FTSE AIM All-Share TR index over the six months to August 31, driven by increasing negative sentiment towards UK smaller companies given the macro-economic headwinds.
Judith MacKenzie, the lead manager, said: ‘The overhang of 2022 has seen the negative markets sentiment towards UK smaller companies continue.
‘Meanwhile, the catalysts in the portfolio are being recognised and realised, with over 20% of net assets now ’in play’ with agreed bids or strategic reviews that should lead to exits and a return of capital.’
‘With that corporate activity in mind, and the continuing negative sentiment towards smaller companies and small investment trusts, the board and manager have decided that it is timely to begin a managed wind-down of the company, with the intention to make the first return to shareholders of at least 20% of capital in early 2024. This will be followed by further returns of capital as liquidity/trade exits permit.’
Shares in the trust closed up 1.5% at 61.91 pence in London on Friday.
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