Schiehallion launches $20m buyback programme

investmentweek.co.uk:

The trust said its board and investment manager, Baillie Gifford, are focused on “maximising returns” for shareholders.

In a stock exchange notice today (2 November), the private equity investment trust said only $20m could be allocated to repurchase its own shares at this time, given the «limited available capital».

According to the Association of Investment Companies, the trust holds over £1bn in assets and is currently trading on a 56.9% discount to net asset value. The AIC Growth Capital sector is trading at an average 55% discount. 

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One of its sector peers, Chrysalis Investments, recently set out proposals to change its capital allocation policy, enabling it to buy back up to 15% of its share capital.

The board noted that although the discount has widened since the conversion of C shares in September and that the board and investment manager, Baillie Gifford, are focused on «maximising returns» for shareholders. 

However, the trust also said the priority is to «ensure that the company has sufficient capital to deliver on its objectives», including supporting existing investments and meeting its ongoing working capital requirements. 

«The board will keep this capital allocation and associated share buyback policy under review,» it said.

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