Group writes to 14,000 clients about their transfer options following takeover of EIT by fidelity
Edinburgh Fund Managers (EFM) is to write to the 14,000 clients invested in the Edinburgh Investment Trust (EIT) through its Isas, pension and saving schemes about their investment options following the loss of the trust to Fidelity.
Some 8% of EIT's shares are held in EFM's own Isa wrappers, pension and savings schemes. Iain Watt, chief executive of EFM, said these shares cannot be transferred to Fidelity as they are EFM products. 'We are currently working on the options we can provide to holders of these products and will be writing to them in due course,' he added.
According to HSBC data, the discount on EIT narrowed from 13.5% on 19 July when the announcement was made to 7.45% on 23 July. The premium on the Fidelity Special Values trust moved from 7.8% to 0.8% over the same period, suggesting a switch of money between the two trusts.
However, in such volatile markets, discounts can move sharply over short periods of time so it is difficult to read much into this.
Fidelity takes over management of the trust, currently run by Robert Waugh, on 31 July this year. With the termination of the contract, EFM is expected to lose around £4m in revenue as the £1.1bn trust represents a sizeable portion of the group's total assets.
For Fidelity, which currently has £18bn in UK retail money, the capture of EIT has increased its assets in investment trusts by some 144%.
Prior to winning EIT, the group held £764m through the management of four trusts: Anthony Bolton's Special Values, Euro Values, managed by Tim McCarron, Asian Values, managed by Yosawadee Polcharoen, and Japan Values, managed by Asako Kibe.
Fidelity's strength and ability in UK retail was one of the main reasons it was awarded the contract to manage the trust, with its intention being to increase the proportion of smaller shareholders on its register.