The London-headquartered firm published shareholder circulars to put its planned merger into effect following its initial announcement on June 11. The transaction will be undertaken via an s110 reconstruction and members’ voluntary winding up of Pacific Assets.

Shareholders of Pacific Assets will have a cash option priced at a 2% discount to net asset value (NAV) after costs, capped at 25% of its shares in issue. The firm, which has an office in Edinburgh, confirmed the exchange ratio for Pacific Assets shareholders rolling into Schroder Asian Total Return will be determined on a Formula Asset Value (FAV)-to-FAV basis, based on each company’s NAV after costs.

The asset manager confirmed it will contribute £2.4m (capped at £2.75m), assuming the cash option is taken in full, towards the costs of the scheme, which will come in the form of a fee waiver to shareholders of Pacific Assets. This is expected to cover Asian Total Return’s transaction costs (estimated at £815,000) and defray costs for PAC (estimated at £1.42m). Schroders detailed it aims to keep the discount at 5% or less with the use of share buybacks if necessary for its Asian Total Return fund.

The board noted that both sets of shareholders will benefit from lower running costs and a more liquid vehicle. Fees will be calculated on the lower net asset value or market cap, which gives the manager an incentive to keep the discount tight. 

Base management fees will be reduced to 0.65% on the first £500m and 0.50% on assets above £500m, calculated on whichever is lower: Net Asset Value (NAV) or market capitalisation. The annual cap on Schroders’ total fees falls from 1.25% of NAV to 1.15% of NAV. While Schroder Asian Total Return retains a 10% performance fee of outperformance above a 7% per annum hurdle, transitional adjustments have been made so incoming Pacific Assets shareholders do not pay performance fees for periods before joining the merged trust.

Ongoing annual running costs are estimated to drop from 0.80% of NAV to about 0.66% of NAV. The deal also includes a performance-related tender offer for up to 15% of Asian Total Return’s share capital if the trust fails to beat its benchmark over the five-year period through 31 December 2030.

June Ang and Edward Troughton will join Asian Total Return’s board s a non-executive directors from Pacific Assets to bring the total number to six as part of the deal, before scaling back to four over time.

Key dates:

• 8 September 2026: Schroder Asian Total Return General Meeting.
• 9 & 24 September 2026: Pacific Assets shareholder meetings to approve the deal.
• 16 September 2026 (1pm): Deadline for Pacific Assets election forms. (Unvoted shares default to the rollover option).
• 17 September 2026: Trading in Pacific Assets shares suspended.
• 25 September 2026: New Schroder Asian Total Return shares begin trading.
• 8 October 2026: Cash consideration expected to reach accounts.

The firm confirmed: “Accordingly, the Board unanimously recommends to Shareholders that they vote in favour of the Resolutions, as they intend to do in respect of their own beneficial holdings, which total 124,368 Shares (representing 0.13% of the Company’s total voting rights).”