There is life within the former JPMorgan Russian Securities portfolio with an announcement last week (17 August) noting the investment trust has taken part in two share tender offers since the beginning of 2022.

Unfortunately, there is no chance of the cash getting out of Russia and back to the renamed JPMorgan Emerging Europe, Middle East & Africa Securities (JEMA ) under the ongoing sanctions regime, so in the meantime, the proceeds will be held in a custody ‘S’ account in Moscow and will not be reflected in the trust’s net asset value.

The closed-end fund managed by JPMorgan’s Oleg Biryulyov and Pandora Omaset has participated in tender offers in Russia’s largest toy company Detksy Mir and food retailer Magnit since the outbreak of the Ukraine war.

The Detsky Mir tender, which was held over this summer, was for up to 100% of share capital following an acquisition by JSC DMK.

The results of the recent tender are yet to be announced, but Priyesh Parmar, an analyst at the trust’s broker Numis, calculated that if JEMA participated in full at the tender price of 71.5 roubles, that would equate to £2.4m based on the trust’s holdings as at the end of June and the current exchange rate.

The note does not make it clear to what extent nor when JEMA participated in Magnit’s tender for 10% of share capital.

However, the trust noted that it would look to take part in further corporate action in Russian companies. 

Before the war, the trust was called JPMorgan Russian Securities, mostly invested in Russian equities that were subsequently written down to zero. At the annual general meeting last November, shareholders approved a resolution to broaden its mandate to invest across emerging Europe, which includes Russia, the Middle East and Africa.

At the end of June, the £19m trust’s top positions included Saudi Arabian banks, Al-Rajhi Bank and the Saudi National Bank, as well as South African conglomerate Naspers, which had respective weightings of 4.4%, 3.8% and 3.2%.

Over the last 12 months, the shares have climbed 44%, outpacing net asset value, which has risen 6%, according to the latest factsheet, leaving the stock on a highly unusual 164% premium.