UK equity income investment companies could see some consolidation, according to investment trust analysts, as two of the sector's largest offerings begin what could be high-profile searches for new management teams.
At the start of April, the board of the £455m Perpetual Income and Growth (PLI) announced it had parted company with manager Mark Barnett.
That was followed a fortnight later by the £509m Temple Bar (TMPL) serving a 12-month notice to Ninety One after long-serving manager Alastair Mundy took a leave of absence for health reasons.
While TMPL has not yet sacked Ninety One, and insisted it is "certainly possible" that the South African firm will continue to manage the trust, analysts are expecting the two established funds to generate interest from rival groups.
In PLI's case, the deadline for firms to declare their interest in taking on the mandate was Friday 17 April.
Broker Winterflood said it expected "interest in both investment trusts will be extremely high, with asset managers particularly keen to replenish lost AUM at present". "In addition, the current situation gives them two bites at the cherry," said head of research Simon Elliott.
Edinburgh Investment Trust (EDIN) started the UK equity income merry-go-round at the tail end of 2019, sacking Barnett and replacing Invesco with Majedie Asset Management's James de Uphaugh, a decision that surprised many in the industry.
The latest rumour mill kicked off after PLI's decision, with Adrian Lowcock noting "three clear frontrunners" for the mandate being Majedie, Schroders and Aberdeen Standard Investments.
Broker Winterflood noted PLI was likely to "attract strong interest", adding it would "not be surprised to see existing incumbents in the subsector proposing corporate solutions".
One suggestion floating around was for the possibility of Majedie to take over and merge PLI with EDIN, and, while some commentators think there needs to be consolidation in the sector, they poured doubt on a PLI/EDIN merger.