Two-Thirds of Fidelity Japan shareholders move into AVI 

The merger with AVI Japan Opportunity was supported by a clear majority of FJV investors.

Two-thirds of shareholders in Fidelity Japan (FJV ) have opted to roll into peer AVI Japan Opportunity (AJOT ), rather than take a full cash exit.

In a London Stock Exchange announcement, the board of FJV said that 68% of investors opted for the default rollover, with the new AJOT shares due to begin trading on 28 November. 

The cash option, which had been capped at 50% of total shares, was therefore undersubscribed.

AVI Japan, the £230m smaller companies trust, first publicly courted FJV back in April, following the retirement of long-time manager Nicholas Price, and a push from its top shareholder City of London Investment Management.

The proposal was finally approved in August after FJV’s board conducted a review, having failed its continuation vote in May.

Winterflood’s Shavar Halberstadt said: ‘It is rare to see a cash exit opportunity materially undersubscribed. 

‘Clearly, FJV investors not only wanted to maintain their Japan exposure, but decided AJOT was the right vehicle — aligning with the shareholder-driven origin of this transaction.’

The two trusts are of similar size, but AJOT trades on a tighter discount and has delivered stronger gains in recent years. Shares in the trust have returned 27.6% including dividends reinvested over one year, and 69.4% over the last three, compared with 16.3% for the AIC Japanese Smaller Companies sector.

Shareholders were also likely attracted to AJOT’s value and activist approach, contrasting with FJV’s growth-oriented style, amid a Japanese market increasingly focused on corporate governance and shareholder-friendly reforms.