Brown Advisory US and JPMorgan US Smaller confirm combination plans

Brown Advisory US Smaller Cos PLC and JPMorgan US Smaller Cos Investment Trust PLC on Wednesday said they intend to combine in the fourth quarter, with Saba Capital Management LP poised to opt for a cash exit.

Both companies, which have agreed heads of terms for the proposed combination, are investment trusts that back small-cap companies in the US.

Brown Advisory said it has completed its "comprehensive strategic review" announced in July, with the board concluding that "a scheme of reconstruction" offering the option to rollover into JPMorgan US Smaller, and/or elect for cash, "is the best outcome for shareholders as a whole."

Shareholders will be able to choose between the default option of rolling their investment into new ordinary shares to be issued by JUSC, and/or to realise some or all of their holding for cash at a discount of 0.75% to BASC's residual net asset value.

BASC said these proposals "provide an attractive solution for shareholders who wish to retain exposure to US smaller companies through a larger investment trust with lower ongoing costs, while also providing a full cash exit for those seeking liquidity."

"Despite the unsettled geopolitical backdrop, we continue to see a favourable outlook for US smaller companies," commented BASC Chair Stephen White. "The macroeconomic background remains supportive, valuations are attractive and there are signs that investors are revisiting the asset class as they take profits in other parts of their portfolios that have performed strongly.

"We believe the proposed combination creates a stronger vehicle through which shareholders can retain exposure to that opportunity over the long-term.”

BASC said its board has received an irrevocable undertaking from Saba, alongside managed funds and clients, to vote or procure votes in favour of the scheme, and to opt for the cash option in respect of its entire shareholding.

BASC said Saba holds approximately 16% of its issued share capital.

The companies expect the scheme to complete in December, "or shortly thereafter".

JUSC noted that the enlarged firm will continue to be managed by JPMorgan Funds Ltd, in accordance with its existing investment objective and policy.

"I am delighted to announce a proposed combination with BASC and look forward to welcoming those shareholders who participate in the rollover option," commented JUSC Chair Dominic Neary. "I believe that US smaller companies are some of the most exciting in the world, with JUSC's investment trust structure providing a marked advantage in accessing these opportunities."

Brown Advisory US shares were 2.6% higher at 1,649.25 pence late on Wednesday afternoon in London. JPMorgan US Smaller Cos shares were down 2.0% at 413.55p each.

Copyright 2026 Alliance News Ltd. All Rights Reserved.