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In safe hands?

Investment trust governance has been getting a lot better but it can go much further.
In safe hands?
  • Boards are key to creating value for investment trust shareholders
  • The policies they pursue have the chance to drive the industry's growth

After several years of torrid performance, the shareholders of Gabelli Value Plus (GVP) were itching to pull the plug on the London-listed investment trust. They wanted to get their money out at close to net asset value (NAV) rather than selling in the market at the shares’ prevailing and stubbornly wide discount. So in mid-2020, when a liquidation vote was put forward, it got resounding support. 

But there was a noteworthy hold-out: AGC, a vehicle controlled by the investment manager’s eponymous founder, Mario Gabelli. Gabelli and AGC together held 28 per cent of the trust’s shares and would not play ball. As a liquidation needs at least 75 per cent shareholder support, this represented a blocking vote. It was a blocking vote that seemed in the interest of the investment manager rather than shareholders.

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