Bellevue Healthcare Trust to hand reins to Columbia Threadneedle and relaunch as CT Healthcare Trust

Bellevue Healthcare Trust PLC (LSE:BBH) plans to appoint Columbia Threadneedle Investments as its new manager and overhaul its strategy to focus on active, long/short investing in global healthcare companies.

The move follows a strategic review launched in August after a period of underperformance.

The London-listed trust said the change would see it adopt the healthcare strategy managed by Silicon Valley-based subsidiary Seligman Investments, which has gained 70.8% since its launch in mid-2023, far ahead of the 2.8% return from the Russell 3000 Health Care Index over the same period.

If approved by shareholders, the company will be renamed CT Healthcare Trust plc.

The new approach takes both long and short positions, backing companies developing promising new treatments, while shorting those hit by clinical or regulatory setbacks.

Columbia Threadneedle said the strategy is designed to smooth returns in a volatile sector and to benefit from both innovation and failure within healthcare.

Bellevue’s board said Columbia Threadneedle’s proposal was selected after assessing multiple options, including a merger or winding up the trust.

Chair Kate Bolsover said: “We believe this will give shareholders a new, highly differentiated and diversified investment strategy which employs an innovative, proprietary long/short strategy to generate positive returns even when healthcare indices are in decline.”

Under the proposed terms, Columbia Threadneedle would charge a base fee of 0.95% of net asset value per year, with a 15% performance fee on any growth in net asset value above a benchmark based on the three-month Sterling Overnight Index Average (SONIA).

To enhance liquidity, shareholders would be offered quarterly redemption opportunities of up to 15% of issued share capital at net asset value, replacing the existing annual redemption feature.

The trust may also issue new shares at month-end where demand exceeds market supply and such issuance would be accretive to value.

A change in dividend policy is also on the table.

The new investment strategy would focus on generating absolute returns and capital growth, rather than a mix of income and capital appreciation.

However, the board said it would retain the flexibility to pay dividends from capital and will consult shareholders before confirming a revised policy ahead of the circular to investors.

Columbia Threadneedle, the asset management arm of US-based Ameriprise Financial, oversees £503 billion in assets. Its healthcare team, led by Dr Kosta Kleyman, includes eight sector specialists with backgrounds in science, medicine, and investment.

Bolsover will step down as chair after the next annual meeting, as she also leads another CT-managed trust. Sarah MacAulay, a seasoned investment trust director, is expected to take over.

If approved, the revamp would mark a major shift for the company, transforming it from a conventional healthcare fund into a global long/short vehicle aimed at delivering consistent returns through both rising and falling markets.