Underperforming Blackrock Latin American triggers 25% tender 

The last Latin American trust standing will tender up to a quarter of its shares after failing to meet performance goals.

Blackrock Latin American (BRLA) has triggered a tender offer for up to a quarter of its shares after failing to meet the performance targets set out in its discount control policy.  

Over the four years from 1 January 2022, the trust lagged its MSCI EM Latin American benchmark by 3.3% a year, failing to meet its requirement of more than 0.5% outperformance.

Its discount, which averaged 10.9% over the period, remained within the policy’s 12% limit. 

The structure and timing of the tender has yet to be confirmed, but the board is expected to seek shareholder approval immediately after its annual general meeting, provisionally scheduled for 21 May. 

The tender will be offered at a 2% discount minus any realisation costs. 

The £122.4m vehicle, run by Sam Vecht and Gordon Fraser, is the last remaining UK-listed Latin America specialist investment trust, with long-term underperformance having prompted at least a dozen of its peers to either wind down or exit the sector.

It offers a 5.2% yield and shared in the decisive rebound from emerging markets last year, with its share price climbing 38.4% since ‘Liberation Day’. Over the past four years, shares are 59.3% and its net asset value has increased 54.3%.

As of November, top holdings include Brazilian mining and materials group Vale – one of the world’s largest producers of iron ore and nickel – and Walmart de México y Centroamérica.