JPMorgan's £200m Deal Seeks to Bolster Smaller Company Trusts

JPMorgan UK Small Cap Growth & Income plc is set to combine with Aberdeen UK Smaller Companies Growth Trust plc in a move that will create a larger company with improved market liquidity and lower ongoing charges. The deal, which will be implemented through a members' voluntary winding up of AUSC under Section 110 of the Insolvency Act 1986, offers AUSC shareholders new JUGI shares or up to 35% in cash.

The combination is expected to improve scale, lower ongoing charges, enhance market liquidity, and reflect further consolidation in the UK smaller companies investment trust sector. If completed, the enlarged JUGI will continue to be managed by JPMorgan Funds Limited, with portfolio management delegated to JPMorgan Asset Management (UK) Limited.

JPMorgan has agreed to reduce the management fee on the enlarged vehicle to 0.60% per year on net assets up to and including £200 million, down from the current 0.65%. The dividend policy of JUGI is intended to remain unchanged after implementation of the proposals, with an annual dividend equivalent to 4% of net asset value.