Number of investment trust share buybacks hits record high but effectiveness called into question

Tenders vs buybacks

Cristian Angeloni
clock • 5 min read

Share buybacks carried out by investment trusts reached a record high in 2023 with 154 portfolios repurchasing £3.9bn, according to data from Winterflood, as discounts continued to widened to levels not seen since the Global Financial Crisis.

At the same time, an increasing number of investment trusts veered towards tender offers, with a total of 28 funds embarking in 47 transactions of the sort, a level not seen since 2019. These had a combined worth of £860m, down from the record £1.2bn of 2020, but nearly double the £580m tendered in 2022. Deep Dive: UK companies lean towards buybacks as trusts weigh discount narrowing efficiency The rationale behind share buybacks stems from investment trust boards' urge to proactively attempt to narrow discounts. At the end of October 2023, the average investment trust discount ...

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