Investors in Fidelity Emerging Markets (FEML ) sought to sell nearly 90% of their shares in the tender offer launched last month.

The company announced yesterday it had received valid tenders for around 79.8m shares, or 88.8% of the total.

Although the offer was limited to 14.99%, or 13.5m shares, the result underlines the challenge facing the closed-end fund two-and-a-half years after Fidelity replaced Genesis Investment Management as fund manager.

Shareholders who tendered 15% or less of their shares will have the full amount bought back. Those who tendered more will have their basic entitlement plus 1% of their excess application.

The shares will be bought on Thursday at £7.40 which was a 2% discount to their net asset value (NAV) on 22 March.

Peel Hunt analyst Markuz Jaffe said the shares, which the company was buying back before the tender, saw their discount initially narrow to 10% after the announcement on 22 February, but the gap has since widened to 13%.

‘We would not be surprised to see this widen further given the significantly oversubscribed tender offer and FEML’s historical discount range,’ he said.

FEML shares have risen from 631.7p to 651p since the tender offer was launched but remain well below the 878p level when Fidelity’s Nick Price and Chris Tennant took over in October 2021. An overweight to Russia hurt the portfolio after the invasion of Ukraine the following year, leading to the rapid sale of some of the holdings with the remainder written down to zero.

Over three years the company’s NAV has fallen 17%, the worst performance of the six London-listed global emerging markets funds. However, in the past year, it has clawed some of this back with 13% growth that beats the 8% weighted average return of its sector, according to Winterflood data.