Strategies for capitalizing on investment trusts undergoing liquidation
In the world of investment trusts, managed wind-downs, or structured shutdowns, are not uncommon occurrences. These events typically transpire due to an out-of-favour asset class, strategy, or individual trust. However, as of 2025, the investment trust market seems to be more focused on managing discounts to net asset value (NAV), share buybacks, and improving income yields rather than mass wind-downs.
Last year, Abrdn European Logistics Income (LSE: ASLI) entered a managed wind-down following a failed sales process for its entire portfolio. Since then, six more investment trusts have proposed or had wind-downs approved. One of these is JPMorgan Global Core Real Assets (LSE: JARA), which has failed a continuation vote and is returning assets to investors.
JPMorgan Global Core Real Assets has already started realizing value from its portfolio, with the first cash from sales totalling £33 million or 17% of NAV paid in February. Further sales are in the pipeline, with the trust expecting to redeem 80% of assets by the end of 2026. The end-June NAV of 89.1p for JPMorgan Global Core Real Assets implies the shares are trading at a discount of 11%.
Another trust considering a managed wind-down is Life Science Reit (LSE: LABS), which has received significant interest from buyers for parts of its portfolio and is exploring a managed wind-down. Life Science Reit has assets at Oxford Technology Park, Cambourne Park Science & Tech Campus, and King's Cross in London, and is trading at a 32% discount to NAV.
Riverstone Energy (LSE: RSE) has also proposed a managed wind-down, with investors voting on this on 22 August. Riverstone Energy plans to distribute two-thirds of the capital by 31 March 2026, with the remaining illiquid assets sold by the end of 2027. If a buyer cannot be found for the entire portfolio, the trust must sell assets piecemeal.
It's worth noting that not all trusts undergoing managed wind-downs have a smooth process. NB Distressed Debt (LSE: NBDG) began to wind down in 2018 and is still ongoing, according to its latest update. Syncona (LSE: SYNC) has announced it will wind down its portfolio, with a discount of about 40%.
In contrast to these instances, other investment trusts are actively managing their portfolios rather than entering wind-downs. For instance, International Public Partnerships Ltd (INPP), a large infrastructure investment trust, is focusing on asset sales and share buybacks rather than entering wind-down.
In summary, while managed wind-downs of investment trusts do occur, they do not appear to be a current or significant trend in 2025. The investment trust sector is more focused on income generation and re-rating of trusts with strong differentiated strategies. However, for those trusts that are undergoing managed wind-downs, they can present a new opportunity if they offer a timetable and a catalyst for realizing value from a portfolio trading at a deep discount to NAV.
In 2025, the investment trust market is more concentrated on managing discounts to net asset value (NAV), share buybacks, and improving income yields rather than mass wind-downs. However, JPMorgan Global Core Real Assets, Life Science Reit, and Riverstone Energy are consideration or have proposed managed wind-downs.
