As promised, Polar Capital Global Financials Trust (PCFT) has launched a tender offer of up to 100% of its issued share capital (excluding treasury shares), offering investors an opportunity to fully exit at a price close to NAV. The proposal, which follows through on a commitment in the trust’s articles of association, is conditional on shareholder approval and meeting continuation thresholds aimed at ensuring ongoing viability.

Tender offer and secondary placing

The tender offer, managed by Stifel, will allow all qualifying shareholders to tender some or all of their holdings at a price equal to NAV minus costs (capped at 1%). As at 12 May 2025, this would have equated to 209.96p per share, a 2.9% premium to the mid-market price at that time.

To minimise disruption, the board is also facilitating a secondary placing of tendered shares to institutional investors at a premium to the tender price (but not more than 3% above or below the prevailing NAV). Any shares not placed will be repurchased by the trust and held in treasury for potential reissue should the shares trade at a premium in the future.

The trust has stated it will not conduct further buybacks until the tender process is completed, but going forward, it has committed to intervening when the discount exceeds 5% on a sustained basis.

Continuation conditions and risk of wind-up

The offer is conditional on no more than 67% of shares being tendered (implying a minimum post-tender NAV of around £200m), and on at least 10% of the trust’s shares remaining in public hands. Should these conditions not be met, the trust will not proceed with the offer and may instead propose liquidation with an alternative rollover vehicle.

A general meeting will be held on 18 June 2025 to seek approval for the tender and the related secondary placing. If passed, the tender price will be announced on 20 June, with proceeds expected to be distributed by 1 July.

Fee cut and enhanced dividend policy

Alongside the tender, the board has agreed to a tiered management fee from 1 July 2025: 0.70% on the first £500m of assets, and 0.65% thereafter, calculated using a blended basis of NAV and market cap. Notably, the performance fee has been removed entirely.

In addition, PCFT will implement an enhanced dividend policy from 1 December 2025, targeting an annual payout equivalent to 4% of NAV, paid quarterly (1% per quarter). Dividends will be drawn from revenue and, where needed, capital reserves.

Outlook

Despite recent volatility – sparked in part by geopolitical uncertainty and trade tensions following the re-election of President Trump – the trust’s investment manager remains optimistic about the financials sector, citing resilient balance sheets, regulatory easing, and structural tailwinds from the higher interest rate environment.

[QD comment MR: This is a comprehensive and shareholder-friendly set of proposals. The tender offer gives investors optional liquidity at close to NAV, while those who remain will benefit from lower ongoing fees and a clear commitment to dividend growth. The enhanced buyback policy should also help reduce discount volatility over time.]