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BlackRock Smaller Companies Trust Plc - AIM limit

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·2-min read
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BLACKROCK SMALLER COMPANIES TRUST PLC

(LEI:549300MS535KC2WH4082)

The Board of BlackRock Smaller Companies Trust plc (the “Company”) announces that, in the light of the development and evolution of the AIM market in recent years, it is considering removing the current investment restriction that the value of AIM-traded stocks as a percentage of the Company’s portfolio should not exceed 50 per cent. of the portfolio by value. Subject to receiving any requisite consents and regulatory approvals, the Board may put forward a resolution at the Company’s Annual General Meeting in June 2021 proposing that the amendment be made. No change will be made to the limit without shareholder approval and the Company intends to consult with its largest shareholders ahead of proposing any shareholder resolution to remove the restriction.

The background context for the consideration of the removal of this restriction is that, in recent years, some of the Company’s AIM holdings have performed well and this has resulted in an increase in the portfolio’s aggregate exposure to AIM to just under 50% of the portfolio by value. The Board considers that it would be preferable for the Company not to be required to dispose of these AIM stocks solely as a result of circumstances where the performance of these stocks has brought the Company’s total AIM holdings close to the current 50% limit. This limit could also restrict the Company’s ability to subscribe to IPOs or placings of AIM companies that are regarded as attractive investment propositions by the Investment Manager. The Investment Manager additionally believes that, in general, certain tightening of provisions applicable to AIM companies over recent years has resulted in higher standards of governance and transparency, such that the quality of AIM constituents has improved. Consequently, as the Investment Manager’s investment process involves looking at companies on their own merits, whether such a company is AIM traded or fully listed should, the Board believes, be a secondary consideration, and the Board also believes that the Company should have access to a full range of investment opportunities.

Melissa Gallagher
Managing Director Closed End Funds,
BlackRock Investment Management (UK) Limited

Tel: 020 7743 3893