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Pacific Assets Trust PLC on Thursday reported ‘disappointing’ performance in the first half, alongside plans to address this via lower management fees and a future tender offer. The Edinburgh-based investment firm targets companies in the Asia Pacific region, including India but excluding Japan, and is managed by Stewart Investors. Its net asset value was 354.0 pence at July 31, down 1.1% from 358.0 pence at January 31. NAV total return for the six months that ended in July fell sharply to 0.3% from 11.8% the previous year. By comparison, the MSCI All Country Asia ex-Japan index posted a 9.5% total return over the six-month period versus 14.9% the year prior. Pacific Assets said performance was hit by ‘a correction in several Indian holdings, which had previously delivered strong gains.’ Despite the ‘dramatic’ impact of US tariffs on Asia, Chair Andrew Impey backed the firm’s Chinese portfolio: ‘China has demonstrated notable resilience in the face of these tariffs. Despite a sharp drop in exports to the US, China‘s overall export growth has exceeded expectations, driven by a strategic pivot toward alternative markets, an emphasis on domestic consumption, targeted fiscal stimulus, and industrial upgrades.’ He added that the firm’s portfolio has been adjusted for ‘increased exposure to domestic champions and long-term growth franchises across the region, and a deliberate reduction in export-related risk.’ Impey suggested that focusing on high-quality, long-term investments ‘has meant avoiding certain areas of the market where recent rallies have been driven by companies which do not meet these investment criteria.’ Still, he acknowledged that the company’s ‘underperformance is clearly disappointing and the board recognises that recent returns have not met shareholder expectations.’ In connection with this, Pacific Assets laid out its plan to boost performance. It has agreed to a reduced portfolio management fee, which took effect on Wednesday. Stewart Investors will charge Pacific Assets via ‘a tiered structure based on the lower of the Company’s market capitalisation and NAV, set at 0.75% per annum on the first £500 million and 0.65% per annum thereafter.’ Fees were previously calculated as a flat 0.85% per annum of NAV. Additionally, the investment firm is introducing a performance-related tender offer, subject to approval. The offer allows up to 25% of capital to be tendered at the prevailing cost-adjusted NAV per share less 2% and will be available in three years’ time, if the firm’s cumulative NAV total return is below that of its benchmark, plus 0.5% per annum. Pacific Assets added that it will continue to repurchase shares as needed to manage its trading discount. The firm is also retiring one of its performance objectives, which was to exceed the UK consumer price index by more than 6% on an annual basis, over three to five years. ‘This measure was introduced with the intention of providing an ambitious target and reflecting the company‘s largely UK-based shareholder base. However, the board believes that a market-based comparator offers the most appropriate and relevant benchmark for assessing long-term performance,’ Pacific Assets explained. The firm’s shares traded 0.2% higher at 352.57p on Thursday afternoon in London. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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