Consolidation in the investment company sector took another decisive step this afternoon as the boards of Henderson European Focus Trust (HEFT ) and Henderson EuroTrust (HNE ) announced plans to merge and create the £750m Henderson European Trust.

With Janus Henderson’s long-standing lead manager of European Focus, John Bennett, due to retire shortly, the boards of both closed-end funds, which sit in the same sector, have agreed to join forces to give shareholders a bigger, more liquid and cost-efficient investment.

The £316m Henderson EuroTrust, which is slightly smaller and has less impressive performance than Henderson European Focus, will transfer its assets to its £383m stablemate and be liquidated. It will offer its shareholders a 5% cash exit which European Focus will match with a 5% tender offer.

The new Henderson European portfolio will focus on Europe’s ‘global champions’. It will be jointly run by Tom O’Hara, who has co-managed Henderson European Focus with Bennett since 2020, and Jamie Ross, who has run EuroTrust since 2019.

Both trusts have beaten the 59.8% advance in the MSCI Europe ex-UK index over five years, with Henderson European Focus achieving a total increase in net asset value of 84.8% and EuroTrust growing 69.3%. Over three years, however, the latter has underperformed, returning 19.2% to the benchmark’s 29.5% while European Focus has returned 36.7%.

Shares in Henderson EuroTrust jumped 3.9% to 154.8p at the news, reflecting the fact that their 15% discount to asset value will unwind in the liquidation. Henderson European Focus, which stands on a 12% discount, firmed 0.6% to 181.1p.

In a joint statement, the chairs of HEFT and HNE, Vicky Hastings and Nicola Ralston, said: ‘Henderson European Trust brings together two investment trusts with excellent long-term performance and highly regarded portfolio managers. We strongly believe this combination will create a single company which stands to be much more than the sum of its parts.’

Dan Howe, head of investment companies at Janus Henderson, said: ‘We expect that this flagship investment trust, managed within our award-winning European team, will appeal to investors looking for exposure and performance from “global champions” based in Europe, a region so often overlooked but that is home to many of the world’s biggest, best and most-enduring companies.’