London, UK, 24 May 2017
Edison issues initiation on Polar Capital Global Healthcare Trust (PCGH)
Polar Capital Global Healthcare Growth & Income Trust (PCGH) was set up in 2010 with a fixed life of seven years. In advance of the expected wind-up at the early 2018 AGM, the trust is proposing a seven-year extension, changing the investment strategy to a growth mandate, and issuing zero dividend preference shares (ZDPs) to introduce gearing for the first time. It is also giving existing shareholders the opportunity to tender up to 100% of their investment at NAV minus costs (expected to be c 0.4%), as well as offering new shares to existing and new shareholders. The proposals are contingent on achieving at least £200m of assets following the tender offer and new share issue. The new, growth-focused strategy, renamed Polar Capital Global Healthcare Trust, will be c 90% invested in large-cap healthcare companies benefiting from industry consolidation, and c 10% in sub-$5bn stocks that are driving change through technological innovation.
PCGH currently trades at a 1.5% discount, arguably in light of the forthcoming tender at close to NAV. The board views the fixed life of the trust as an important factor in discount control, as shareholders have the certainty of a future exit. The current dividend yield of c 2% is expected to fall to c 1% under the new, growth-focused strategy.
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