12th December 2025
This year has ended with a failed attempt by two well-meaning Boards of large infrastructure trusts to create a vehicle they thought a majority of shareholders wanted and that would attract new shareholders. While the deal was far from perfect (as we highlighted in these pages), that a major motivating factor for several large existing shareholders to approve the combination was administrative / pragmatic (allegedly) is not the fault of the Boards. An increase in the fixed costs of running wealth management companies caused by massively increased burdens of regulation has understandably led to management teams seeking scale to preserve margins and deliver attractively priced solutions to their clients. These shareholders now need their listed vehicles to be much larger and more liquid.
The year is also ending with another high-profile battle between an activist investor and a large fund manager advising on several trusts. Instead of taking sides or flinging mud, is it not better to understand the conditions that created the environment for activist shareholders to build stakes in the first place? Someone sold their shares at wide enough discounts to make an investment attractive enough for an activist. No one likes wasps at their picnic, but without them, our ecosystem collapses.
The year also ends with investment trusts being part of the new Consumer Composite Investment regime, with the FCA having regulatory powers over investment trusts themselves. Arriving at a fair cost disclosure has taken up the time and energy of many of us. We have hopefully finally ended the erroneous aggregation of expenses. But in the meantime, many investors have exited the sector and that is a calamity.
Finally, we end the year with investment trusts being excluded from the Pension Schemes Bill. This is a colossal own-goal by policy makers.
We worry that too many stakeholders in this wonderful sector are being too inward-looking. More energy could be focused on lobbying Government and the Regulator to help them understand how harnessing the crown jewel in the UK’s financial services architecture could help drive growth for the UK economy, build out key areas of social and economic infrastructure and drive better returns for the nation’s savers and investors – opening up opportunities that would otherwise be available only to the very wealthiest. We also need a regulatory and legislative environment that nurtures different sizes of wealth / investment / fund managers – not forgetting financial advisers. Consumer outcomes will be best served by a thriving and diverse eco-system – not unlike our countryside, wasps and all.
In short, we need to attract new shareholder to the sector.
Thank you to everyone who has supported us, read this blog, commented and given feedback. Wishing you and your families a wonderful festive season. We’ll be back in January.
Ben Mackie, Ben Conway, Daniel Lockyer, Dan Cartridge
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For professional advisers only. This article is issued by Hawksmoor Fund Managers which is a trading name of Hawksmoor Investment Management (“Hawksmoor”). Hawksmoor is authorised and regulated by the Financial Conduct Authority. Hawksmoor’s registered office is 2nd Floor Stratus House, Emperor Way, Exeter Business Park, Exeter, Devon EX1 3QS. Company Number: 6307442. This document does not constitute an offer or invitation to any person, nor should its content be interpreted as investment or tax advice for which you should consult your financial adviser and/or accountant. The information and opinions it contains have been compiled or arrived at from sources believed to be reliable at the time and are given in good faith, but no representation is made as to their accuracy, completeness or correctness. Any opinion expressed in this document, whether in general or both on the performance of individual securities and in a wider economic context, represents the views of Hawksmoor at the time of preparation and may be subject to change. Past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you originally invested. FPC25597
