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Scottish Investment Trust to merge with JP Morgan in £1.2bn deal

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Scottish Mortgage, which is the second largest in the UK, has seen strong performance over recent months despite a tumultuous few years.
Scottish Mortgage, which is the second largest in the UK, has seen strong performance over recent months despite a tumultuous few years.

Scottish Investment Trust is dropping its in-house management team to combine assets with JP Morgan’s Global Growth & Income (JGGI) arm to create a new £1.2bn enlarged trust.

The deal is expected to complete in the first quarter of next year if approved by shareholders, and the Scottish Investment Trust will be voluntarily liquidated through a scheme of reconstruction under the plans. The new trust will take on the JGGI name.

Scottish Investment Trust said the merger represented “the most compelling outcome” for its shareholders, who according to the plans will own shares in JGGI on a formula asset value basis.

These shares will be worked out by calculating the net asset values of both parties, and adjusted for each company’s allocations of costs.

The larger of the two, JP Morgan, will make a contribution to the costs of the transaction that represents eight months worth of management fees, paid to the new larger trust.

Scottish Investment Trust chairman James Will said the decision to merge with JP Morgan’s JGGI unit was inspired by its “style-agnostic total return approach”, “index-beating performance”, and “attractive level of dividend to investors”.