TIDMAIF

Acorn Income Fund Ld

05 October 2021

London, UK, 5 October 2021

Edison issues review on Acorn Income Fund (AIF)

Acorn Income Fund (AIF) ordinary shareholders have less than a week to decide whether to cash in their investment or roll over into the open-ended Unicorn UK Income Fund run by AIF's small-cap portfolio managers, Fraser Mackersie and Simon Moon. The proposals are subject to a vote in favour of discontinuation at the AGM and subsequent EGM approval (proxy forms to be returned by 8 October) and elections for the rollover or cash exit must be received by the registrar by 11 October. AIF's 2022 zero-dividend preference share (ZDP) holders need take no action at present. In this note, we outline the background to and substance of the proposals, as well as considering how the Unicorn fund stacks up against the AIF portfolio.

Although a small fund (total assets of c GBP100m including the gearing from c GBP35m of ZDPs), it seems clear that AIF has a core of shareholders who like its small-cap UK income angle and were less than enthused by the prospect of switching to a large-cap global strategy, whatever its sustainability credentials. While those who choose (or default to) the rollover option will lose some of the features of the closed-end structure, such as the ability to gear and to hold smaller, less liquid stocks, they should benefit from transferring into the OEIC at close to NAV (and with no trading costs), thus wiping out the remaining discount at which the shares currently trade.

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October 05, 2021 03:18 ET (07:18 GMT)

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