Polar Capital Global Financials comes through tender offer 

Specialist financial equities trust, which has performed strongly over five years, should continue to have sufficient scale with more than £350m of assets.

The results of a tender offer at Polar Capital Global Financials (PCFT ) are out, revealing close to half the share capital elected to sell out at net asset value (NAV) less costs.

An update from the trust today specified that 133m shares were tendered, equalling 44% of issued share capital.

The specialist equity trust, which closed yesterday with a market capitalisation of £619m, has a policy of conducting tender offers every five years. 

PCFT, which is run by Polar Capital’s Nick Brind, Tom Dorner and George Barrow, has been ramping up corporate governance measures over the past year. 

Alongside its tender offer, the trust has introduced a tiered fee structure, removed its performance fee entirely and welcomed a supercharged dividend set at 4% of NAV. 

Deutsche Numis analyst Gavin Trodd noted that the redemption ‘will leave PCFT with net assets of [around] £350m, although the company will look to place tendered shares.’ The board previously stated that if redemptions resulted in net assets falling below £200m, it would seek to wind up the trust. 

Chair Simon Cordery also commented on the update today, stating that ‘retaining close to 60% and having assets in excess of £350m based on the latest published NAV, is a strong outcome for the company’.

He added ‘the response to the investment case set out by the team at Polar Capital has been very positive, with many investors recognising the value on offer in the financial sector’.

Writing for Citywire last month, QuotedData’s James Carthew encouraged investors not to tender their shares, arguing that despite good performance swathes of financial businesses continue to have low valuations. 

PCFT has beaten its benchmark index the MSCI World Financials over the past year, with share price returns of 26.6% versus 23.3% for the index, according to Deutsche Numis data.  

In a recent update, the team acknowledged tariff-related headwinds for the US, which accounts for just over half their assets. But they reiterated a belief that financials are well-positioned for growth due to ‘a higher-for-longer interest rate environment, the increased likelihood of regulatory easing and a shift in Europe’s fiscal framework’, with the German government increasing fiscal spending.

Shareholders have enjoyed a 125% return over five years, including dividends reinvested, versus 115% for MSCI World Financials. 

The shares have narrowed to trade on a 3.5% discount ahead of the tender offer – versus their average 5.5% discount over 12 months – with the next 100% exit opportunity set for 2030. 

The final tender price will be given on 20 June.