The investment trust industry has seen no shortage of merger activity in recent years, with at least 20 completed since the start of 2023 – and there is little sign of a slowdown for that trend in 2026.
However, while most amount to the effective takeover of a struggling trust by a more successful counterpart, the merger between Shires Income (SHRS) and its stablemate Aberdeen Equity Income Trust (AEI) that took place in March was a very different affair.
As well as being run by the same investment house, these two long-established trusts both had a similar focus on hunting out undervalued businesses in the UK equity income arena; they had similar investment objectives and considerable overlap in their portfolios. And importantly, both also had strong track records over both long and short-term perspectives and were trading recently at a premium to net asset value rather than a discount.
All that common ground made for a relatively simple merger process. As co-manager Iain Pyle observes: “Both trusts were working well already, so there was no need to reinvent the wheel. This was a merger borne of strength rather than necessity - we are better together.”
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