Listed Jupiter trust plans to liquidate after Ukraine conflict muddies outlook
A £66m listed investment trust has put forward plans for liquidation after conflict in Ukraine muddied the economic outlook and restricted opportunities for growth.
The board of the Jupiter Emerging and Frontier Income investment trust (JEFI), which specialises in emerging market investment, unveiled plans to wind down the firm yesterday as they pointed to the risks of further shrinkage and the shocks of the conflict.
Just prior to Russia’s invasion of Ukraine, the firm had direct and indirect exposure to Russian representing 6.3 per cent of its net asset value, Investment Week reported, with bosses dumping shares in Sberbank on 24th February.
In an announcement the board of the firm said it was “conscious of the current size of the company, the risk of further shrinkage through redemptions and the limited opportunities for growth against the backdrop of a deteriorating international outlook”.
The invasion of Ukraine by Russia had only reinforced the board’s reservations, they added.
Bosses are now considering a full cash exit and the optional rollover of assets into a new investment vehicle, with an announcement to be made in due course.
The firm came to an impasse with shareholders in January over over the future of its redemption facility, and bosses said they were reviewing their options for the company’s future.
Analysts at QuotedData said the decision to liquidate the firm was a “disappointing” one.
“We think that JEFI offered a distinctly different investment proposition – a combination of income and capital growth from a portfolio of emerging and frontier market securities; a decent yield (the highest in the sector), and, ignoring the single country funds, has provided a return during the last three years that is close to twice the sector median,” they said.
They said they hoped the proposals laid out by bosses would have helped address the issue of its size and could have found a wider base of support.