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C shares

C (‘Conversion’) shares help an investment company grow in a way that protects the interests of existing ordinary shareholders.

C (‘Conversion’) shares help an investment company grow in a way that protects the interests of existing ordinary shareholders.

When an investment company wants to grow, it may issue C shares. These shares and the proceeds are held in a separate pool and invested in a portfolio of assets.

After a certain period, or when the pool of new money is fully invested, the two portfolios are merged and the C shares are exchanged for ordinary shares.

The advantage of C shares is that existing ordinary shareholders:

  • don’t have to take up the C share offer if they don’t want to
  • don’t have their returns affected while they wait for the proceeds of the C share to be invested
  • don’t bear any of the issue costs
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