LONDON: Fidelity European Trust PLC (FEV) and Henderson European Trust PLC (HET) announced Thursday they have agreed to combine in a deal that will create the U.K.’s largest closed-ended investment vehicle focused on Europe, with anticipated net assets exceeding £2.1 billion ($2.7 billion).
The proposed merger, structured under a scheme of reconstruction under the Insolvency Act 1986, will see HET shareholders receive new FEV shares or cash. The combined trust will retain FEV’s name, investment strategy and portfolio managers, Sam Morse and Marcel Stötzel.
Key Benefits for Shareholders
- Lower Fees: Fidelity will introduce a tiered management fee structure, reducing costs for larger investors. The blended annual fee is expected to drop to 0.625%, down from FEV’s current 0.76%.
- Cost Savings: Fidelity will waive 12 months of management fees on HET’s transferred assets, estimated at £2.4 million, offsetting transaction costs for FEV shareholders.
- Enhanced Liquidity: The combined entity aims to maintain a mid-single-digit discount to net asset value, improving marketability.
Davina Walter, chair of FEV, called the deal an “exciting opportunity” to create a leading European investment trust. Shareholders of both companies must approve the merger, with votes expected in September 2025.