Investment trust continuation votes are often uneventful, with shareholders happy enough for a fund to keep going. But the challenges of the past year have forced boards to take drastic action to win over shareholders – and in the case of Hipgnosis Songs Fund (SONG), investors must now decide if this is the end of the road.
SONG launched to great fanfare in the summer of 2018, with its initial public offering (IPO) taking in more than £1bn and much successful follow-on fundraising. But rising rates and bond yields have seen the shares trade at a discount of more than 40 per cent to net asset value (NAV) recently. The trust needs to survive an impending continuation vote, and if anything can help with that it’s a raft of proposals unveiled on 14 September.
To summarise, the board has agreed to the sale of 29 song catalogues for $440mn (£356mn) (subject to certain conditions), while it has also agreed in principle to separately sell some “non-core” songs for around $25mn.