Abrdn Smaller Companies Income Trust plc announced that it intends to undertake a strategic review to consider the future of the company.
The fund has assets of about £63 million at the end of 2022.
“The strategic review will include consideration of a combination of the company’s assets with another suitable investment trust, possibly coupled with a cash exit,” said the trust.
The trust’s share price rose about 10% on the news, but it is down about 20% for the past year.
“The company continues to deliver upon its investment objective of providing a high and growing dividend and capital growth from a portfolio invested principally in UK smaller companies and UK fixed income securities,” said the fund in a stock exchange statement.
“However, the company’s shares have continued to trade at a material discount to their net asset value for a prolonged period of time and this, coupled with the company being of a small scale, has created challenges in generating improved liquidity in the company’s shares and will also restrict the company’s ability to grow over time.
“Whilst the board of directors of the company believes that the company remains in a position to continue to generate attractive returns for all shareholders, the board today announces that it intends to undertake a strategic review to consider the future of the company.
“The strategic review will include consideration of a combination of the company’s assets with another suitable investment trust, possibly coupled with a cash exit.
“The board will continue to update shareholders on the progress of the strategic review, as appropriate.
“There can be no certainty as to the outcome of the strategic review nor whether any potential transaction would be successfully completed.”