F&C boss slams £1.6bn property trust merger

F&C ASSET MANAGEMENT has fired a shot across the bow of rival Ignis Asset Management ahead of a crunch vote on the controversial merger of their property trusts next week.

F&C is fiercely opposed to the proposed tie-up between the F&C Property Trust (FCPT) and Ignis’ UK Commercial Property Trust (UKCPT), which would create one of the largest real estate investment funds on the stockmarket with a £1.6bn portfolio.

The trusts’ independent boards, backed by their two largest shareholders, have already agreed to merge and eject F&C’s team from the driving seat. But a technicality means the deal needs to be approved by the majority of small investors.

Losing control of the trust would be a serious blow for F&C. This year it has lost mandates to run the F&C Eurotrust and Pacific Assets trust, while the F&C UK Select trust has been wound up.

Before the crucial vote on Monday, chief executive Alain Grisay said: “Our performance on that particular property trust was so good it was capped last year. So what is it these guys have done wrong? Nothing.”

Referring to Ignis’ plan to replace F&C fund manager Richard Kirby and his colleagues, Grisay told City A.M.: “It would be pretty hard to make a stand and say it is in the interest of the shareholders to change the fund manager here, not with the track record our guys have.”

UKCPT chairman Chris Hill hit back, saying: “Joining the trusts would create a larger, more liquid vehicle at a time when liquidity has substantially dried up. The dividend yield is also improved by the merger.”

Shares in FCPT closed at 91.25p yesterday, a slight discount to its June net asset value of 93.7p.