The programme is expected to be accretive to both NAV per ordinary share and dividend cover, as well as provide additional liquidity for GSEO's underlying shares.
In its interim results for the six months to 30 June 2023, the GSEO board said the share buybacks, which represent nearly 15% of the trust's issued capital, will be funded from the trust's surplus liquidity.
The programme is expected to be accretive to NAV per ordinary share and dividend cover, as well as provide additional liquidity for GSEO's underlying shares.
The GSEO board said it was «acutely aware» of the impact the trust's discount to NAV has on shareholder returns, noting it will commit to undertake buybacks when it believed «those to be in the best interests of shareholders».
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«The board continually evaluates the optimum capital allocation strategy for the company balancing the need to maintain a strong balance sheet in order to support existing portfolio assets alongside further investment opportunities and returning capital to shareholders via dividends or share buybacks,» it said.
At the end of the reported period, GSEO's discount to NAV fell to 16.3%. According to the Association of Investment Companies, the discount has continued to widen further to 30.9% discount today (15 September).
GSEO, which holds £464.7m in assets under management, delivered a NAV total return of 4.6% in the first half of 2023, while portfolio value increased by £23.6m, adding 5.58p to NAV.
The increase was driven by a 136bps reduction in discount rates across the portfolio due to lower risk-free rates and sector risk premia.
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This offset a £4.5m write-down on construction
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