European Trusts Survive After Wave of Mergers and Acquisitions

The investment trust sector has been witnessing a flurry of merger and acquisition activities. Recently, three European trusts made merger announcements, adding to the ongoing trend.

One of the mergers involves Henderson European (HET) merging into Fidelity European (FEV), resulting in the creation of a £2.1 billion trust. The trust will be managed by the Fidelity managers and offers investors a solid option for core European exposure. Fidelity European focuses on quality companies that have the potential to grow their dividends over a period of three to five years. Its top 10 holdings include well-known companies like ASML, Sap, Roche, and L’Oréal, along with other names that may be less familiar to investors.

In another merger announcement, Devon Equity Management, the company behind European Opportunities (EOT), will be acquired by River Global. Although Alexander Darwall is expected to continue managing the trust, it is crucial to note that a continuation vote is scheduled for 2026, and the trust has been underperforming recently.

These mergers highlight the active environment in the investment trust sector. Investors need to stay informed about these developments as mergers can have significant implications for the companies involved and the investors who hold shares in these trusts. It is essential for investors to assess the potential impact of these mergers on their portfolios and investment strategies.

As the investment trust sector continues to experience consolidation, it is important for investors to consider the long-term implications of these mergers on their investment decisions. Understanding the rationale behind these mergers and how they align with one’s investment goals is crucial for making informed decisions. Keeping a close eye on industry trends and staying informed about the latest merger activities can provide valuable insights for investors looking to navigate the changing landscape of the investment trust sector.