UK Investment Trusts

FAQs

• 1. What is happening?

  Following the resignation of both the Company’s co-portfolio managers from Janus Henderson Investors on 31 January 2025 (see the announcement here), the Board conducted a comprehensive review of the potential options available for the Company’s future. As a result the Company announced on 19 June 2025 (see the announcement here) that it had agreed heads of terms with Fidelity European Trust PLC (“FEV”), in respect of the proposed combination of the two companies. It is proposed that this is achieved through a scheme of reconstruction and subsequent members’ voluntary liquidation of HET (the “Scheme”).

  If the proposals are approved by HET and FEV shareholders, certain of HET’s assets will be transferred to FEV and eligible HET shareholders will have the option to elect to receive new shares in FEV or cash or a combination of both (as further detailed below).

  Shareholders now have the opportunity to vote on whether to support the Scheme.  If either the HET shareholders or the FEV shareholders reject the proposals, the two trusts will continue as they are.

   

• 2. Why is it happening?

  Following the resignation of both co-portfolio managers from Janus Henderson Investors, the Board of HET solicited views from a significant proportion of the Company’s shareholders, which clearly called for a thorough review of the options for the Company. To aid the Board with this review, Deutsche Numis and investment consultant WTW were engaged to provide specialist and strategic advice.

  The Board’s decision was ultimately strategic in nature and considered the fast-evolving environment for investment companies. As a consequence of conducting a thorough and comprehensive review process, the Board believes the combination is in the best interests of all shareholders and recommend that shareholders support the proposed combination.

   

• 3. Why is the Board recommending a combination?

  The Board believes that the proposed combination of the Company and FEV will have the following benefits for the Company’s shareholders:

  • access to a market-leading European investment product, benefiting from enhanced profile and marketability;
  • unparalleled scale: the combined entity is expected to have net assets in excess of £2.1 billion, the largest European-focused investment trust. As a result of this, the Company’s shareholders are expected to benefit from economies of scale through improved economics (including an OCR which is expected to be lower than HET’s current OCR), enhanced resources, as well increased secondary market trading liquidity;
  • experienced and award-winning portfolio managers in Sam Morse and Marcel Stötzel, backed by an extensive equity research platform, with FEV providing annualised NAV total returns of 10.8% over the last 10 years to 31 July 2025;
  • continuity of investment style and approach: both HET and FEV have aimed to deliver long-term growth through investments in a portfolio of high-quality, predominantly large-cap, European equities. Furthermore, FEV’s investment style would provide investment continuity for rolling HET shareholders;
  • strong discount record: as at close of business on 18 August 2025, FEV traded on the narrowest discount in the AIC Europe Sector at 2.5 per cent. and had the narrowest 1-year average discount at 5.7 per cent., with a commitment from FEV to seek to maintain any discount to net asset value in mid-single digits through buybacks in normal market conditions;
  • significant contribution to costs: FEV’s manager and investment manager have undertaken to make a material contribution to the costs of the proposals, equivalent to 12 months’ management fees on the net assets to be transferred by the Company to FEV pursuant to the proposed Scheme. The portion of this contribution allocated to the Company is expected to cover substantially all of the direct costs of the proposals which would otherwise be borne by HET shareholders receiving the Rollover Option; and
  • material cash option exit: eligible shareholders will have the option to choose between continuing their investment in a well-regarded investment trust in the European equities sector or receiving cash in respect of their investment at a 1.75% discount to the residual formula asset value.

• 4. What does the combination mean for me?

  The default option under the Scheme will be for eligible shareholders to receive new FEV shares. The number of new FEV shares shareholders will receive will be calculated using the formula set out below. HET shareholders also have the option to elect for a cash exit in respect of all or part of their holding of HET shares (the “Cash Option”). The Cash Option is capped at 33.3% of the Company’s shares in issue (excluding treasury shares). If total elections for the Cash Option exceed this cap, shareholders who have elected to receive the Cash Option for more than 33.3% of their individual holding will have their application for the Cash Option scaled back and will receive New FEV Shares in respect of the excess (overseas HET shareholders should refer to question 7 below for further details).

  In order to calculate shareholders’ entitlements under the Scheme, the Board, in consultation with the proposed liquidators will divide the Company’s assets into three separate and distinct pools (the Liquidation Pool, the Cash Pool and the Rollover Pool). After allocating certain assets as well as cash and other assets to the Liquidation Pool to meet all known and unknown liabilities of the Company and other contingencies, the remaining assets of the Company will be split between the Rollover Pool and the Cash Pool based on elections received from shareholders.

  The calculation for how many new FEV shares a shareholder will receive is as follows:

  Number of new FEV shares =	HET Rollover Pool Formula Asset Value (‘FAV’) per share	X	Aggregate number of HET shares held by the relevant shareholder
  	FEV Formula Asset Value (‘FAV’) per share

  The HET Rollover Pool Formula Asset Value will be the value of the Rollover Pool: i) plus an amount equal to the value of the amount contributed by Fidelity by way of a 12-month fee waiver on the assets being transferred to FEV; (ii) plus an amount equal to the 1.75% of the residual asset value of the Cash Pool; and (iii) less certain costs to be borne by the Company in connection with the proposed novation of certain of its debt to FEV.

  Shareholders electing for the Cash Option will receive an amount in cash equal to their pro rata share of the realisation proceeds of the Cash Pool created pursuant to the Scheme (based on the number of HET shares in respect of which their election for the Cash Option is satisfied by the Company) less a discount of 1.75%.

   

• 5. What do I need to do?

  The proposed combination of HET and FEV requires approval from HET shareholders and FEV shareholders.

  HET has convened two general meetings to enable shareholders to vote on the proposals on 9 September 2025 and 26 September 2025. The Board encourages all shareholders to vote in support of these resolutions since at least 75% of the votes cast at the general meetings must be cast in favour of the resolutions for the Scheme to go ahead.

  For instructions on how to vote, please see the section in the Circular entitled “Summary of action to be taken by Shareholders”, and the additional details set out in the section headed “Action to be taken by Shareholders”, in Part 1 of the Circular.

  Other than voting in favour of the resolutions proposed in the circular and the resolutions being successfully passed, HET shareholders resident in the UK, Channel Islands and Isle of Man do not need to do anything to receive New FEV Shares. See the timetable below for deadlines for voting.

  Overseas shareholders should refer to question 7 below.

   

• 6. What happens if the combination is approved by Shareholders?

  If the necessary resolutions to approve the proposed Scheme are passed by HET shareholders and FEV shareholders, eligible HET shareholders who elected or who are deemed to have elected for the Rollover Option will receive New FEV Shares, while those who elected or who were deemed to have elected for the Cash Option will receive cash for their shares so elected (subject to any scaling back in accordance with the terms of the Scheme). See the timetable below for expected timings.

  Details of the calculation for how many New FEV Shares eligible HET shareholders will receive are set out in paragraph 8.1 of part 3 of the Circular.

   

• 7. Can all shareholders participate?

  HET shareholders with a registered address outside of the United Kingdom, Channel Islands or the Isle of Man will be deemed to be excluded shareholders and will therefore not be entitled to receive New FEV Shares unless they can provide evidence (to the satisfaction of FEV) that they are permitted to hold New FEV Shares under any relevant securities laws or regulations and that FEV will not be subject to any additional regulatory requirements.

  Overseas Shareholders should contact the Company’s registrar, Equiniti Limited on 44 (0)371 384 2050 by no later than 1.00 pm on 9 September 2025 if they wish to receive New FEV Shares.

  Sanctions restricted persons will also be deemed to be excluded shareholders and will not be entitled to receive New FEV Shares under the Scheme.

  US HET shareholders wishing to receive New FEV Shares should, if they are eligible, execute a US Investor Representation Letter, which can be requested from Equiniti Limited and is also available in the link below and return it to FEV in accordance with the instructions printed thereon. If a US HET shareholder does not complete and execute a US Investor Representation Letter, then they will not be entitled to receive New FEV shares under the Scheme.

  Download US Investor Representation Letter

  Excluded HET shareholders will be deemed to have elected for the Cash Option in respect of 100% of their holdings, subject to any scaling back in accordance with the terms of the Scheme. Where an excluded shareholder’s election is scaled back, then such New FEV Shares will be issued instead to the liquidators as nominees on behalf of the excluded HET shareholder who will arrange for the New FEV Shares to be sold and will return the net proceeds of such sale to the relevant excluded HET shareholder (a) in the case of overseas HET shareholders within 10 business days of the date of sale; and (b) in the case of a sanctions restricted person at the sole and absolute discretion of the liquidators, subject to all applicable laws and regulations.

  Further details on the treatment of excluded HET shareholders under the Scheme are set out at paragraph 15 of part 3 of the Circular.

   

• 8. Will the combination affect the dividend?

  A pre-liquidation interim dividend of 3.4 pence per share for the financial period anticipated to end on 25 September 2025 is expected to be paid on 19 September 2025 to HET Shareholders on the register as at 5 September 2025, subject to the resolutions to be proposed at the Company’s first general meeting and the resolutions to be proposed at FEV’s general meeting being passed.

  FEV expects to pay an interim dividend in respect of its financial year ending 31 December 2025 of not less than 3.6 pence per FEV share. Shareholders receiving New FEV Shares are not, in respect of those New FEV Shares, expected to be entitled to receive the FEV interim dividend for the financial year ending 31 December 2025. Thereafter, HET shareholders receiving New FEV Shares will rank fully for all dividends declared by FEV.

   

• 9. What costs will Shareholders need to bear?

  Shareholders will not have to pay any costs directly.

  Each of the Company and FEV will bear their own costs in relation to the Proposals. Fidelity has agreed to make a significant contribution to the costs of the proposals by way of a 12 month waiver of the management fee that would otherwise be payable on the assets transferring from HET. It is expected that the portion of the cost contribution allocated to HET will substantially offset the portion of the Company’s direct transaction costs which would otherwise be borne by rolling HET shareholders.

  Full details of the costs of the proposed Scheme are set out in paragraph 8 of part 1 of the Circular.

  In the event that the Scheme is not implemented, each party will bear its own costs and Fidelity will not make any contribution towards such costs.

• 10. Who will be on the Board of the combined entity?

  The Chairman of FEV, Davina Walter, will remain as Chairman of the combined business. The other board members will be Sir Ivan Rogers, Fleur Meijs, Milyae Park and Paul Yates, who are currently directors of FEV, and Vicky Hastings and Rutger Koopmans, currently directors of HET.

• 11. What are the important dates in this transaction?

  Publication of principal documents	21 August
  Ex dividend date for the HET Pre-Liquidation Interim Dividend	4 September
  Record date for the HET Pre-Liquidation Interim Dividend	5 September
  Latest time and date for receipt of proxy appointments in respect of the First General Meeting NOTE:  The deadline for shareholders holdings shares on share dealing platforms such as AJ Bell, Hargreaves Lansdown, Interactive Investor and so on, will be earlier so please check with your share dealing platform or nominee.	10.00 a.m. on 5 September
  First General Meeting	10.00 a.m. on 9 September
  Trading in Shares suspended	7.30 a.m. on 10 September
  HET Pre-Liquidation Interim Dividend paid to Shareholders	19 September
  Calculation Date	close of business on 19 September
  Latest time and date for receipt of proxy appointments in respect of the Second General Meeting	9.00 a.m. on 24 September
  Second General Meeting	9.00 a.m. on 26 September
  Effective Date for implementation of the Scheme	26 September
  Announcement of the results of Elections, the HET Rollover Pool FAV per Share, the HET Cash Pool FAV per Share and the FEV FAV per Share	26 September
  CREST accounts credited with, and dealings commence in, New FEV Shares	8.00 a.m. on 29 September
  Cheques and electronic payments despatched to Shareholders who elect or are deemed to elect for the Cash Option and CREST accounts credited with cash	week commencing 29 September
  Certificates despatched in respect of New FEV Shares	week commencing 29 September