Atlantis Japan Growth agrees merger with Nippon Active Value

investmentweek.co.uk:

The Atlantis Japan Growth fund holds £81.9m in assets and is currently trading at a 14.6% discount to NAV.

In a stock exchange notice today (11 August), the board said the proposal provides shareholders with access to a «focused and differentiated» strategy, a partial cash exit option and a larger continuing investment trust with the prospect of improved liquidity.

The cash exit opportunity is of up to 25% of the trust's shares in issue, providing shareholders with the ability to realise part — or potentially all — of their investment at a 2% discount to formula asset value per ordinary share.

According to the Association of Investment Companies, the Atlantis Japan Growth fund,  managed by Quaero Capital and part of the Japanese Smaller Companies sector, holds £81.9m in assets. It is currently trading at a 14.6% discount to NAV. 

Investment trust sector falls to 'widest discount' since 2008

The Nippon Active Value fund, which is managed by Rising Sun Management and is also part of the AIC Japanese Smaller Companies sector, holds £165.4m assets and is trading at a 1.2% discount.

«The board has been actively reviewing options to address the relative small size of the company, which has been driven in part by the market rotation away from the growth investment style and recent disappointing relative performance,» it said. 

«These issues have made it difficult to attract significant demand for the company's shares and, absent any action, the discount at which the shares trade to net asset value is likely to persist.»

The merger, if approved by each company's shareholders, will result in the voluntary liquidation of the trust and the rollover of its assets into NAVF in exchange for the issue of new NAVF shares to