Investment trust fundraising more than doubles in H1 as M&A activity increases

Existing investment trust fundraising more than doubled year-on-year to £575m in the first half of 2026, while merger and acquisition (M&A) activity also increased, according to data from the Association of Investment Companies (AIC).

Fundraising by existing investment trusts rose from £221m in H1 2025 to £575m, with the largest amount raised by Seraphim Space Investment Trust (£137m), followed by TwentyFour Income Fund (£98m) and Invesco Bond Income Plus (£85m), both of which are in the debt sectors.

In addition to the secondary fundraising of £575m, £742m of shares were reissued from treasury, while there were no investment trust IPOs during H1.

Share buybacks fell from £4.77bn in H1 2025 to £4.1bn in the first half of 2026, a fall of 14 per cent.

There were also three large tender offers from Impax Environmental Markets (£733m), BlackRock Smaller Companies (£163m) and Vietnam Enterprise Investments (£147m).

Investment trusts’ average return was 9.4 per cent in the first half of the year, with Technology & Technology Innovation being the best-performing sector.

The average investment trust discount fell from 12.3 per cent to 11.6 per cent, and briefly hit single digits in May 2026, the narrowest level since 2022.

In the first half of 2026, there were three mergers, three acquisitions, and six liquidations of investment trusts.

M&A activity rose year-on-year, up from two mergers and four acquisitions in H1 2025, while liquidations decreased from 11.

“It’s been a busy period for corporate activity, though the number of liquidations has fallen compared to last year,” said AIC chief executive, Richard Stone.

“Fundraising by existing trusts has more than doubled and the rate of share buybacks, though still historically high, has subsided a little year-on-year.

“We’ve seen the average investment trust discount at the narrowest levels in nearly four years.

“While the sector remains exposed, as ever, to geopolitical and macroeconomic uncertainty, strong fundraising by several popular investment trusts gives us good reason to be optimistic about the future.”

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