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EDITIONS
Monday, 29 July, 2002, 17:11 GMT 18:11 UK
Trust investors 'could lose money'
Aberdeen Asset Managers
The trust is a split capital investment trust
Investors in the Aberdeen High Income Trust have been warned that they could lose all their money after it went into receivership.

The receivers Ernst & Young said there was little chance of saving the trust.

It appointed the receivers after "careful consideration of the company's financial position".

Tom Burton, joint administrative receiver, warned investors, many of whom have already seen the value of their holding fall by 90%, that they may not get any money back.


It doesn't look good for investors at the moment.

Tom Burton
Receiver Ernst and Young
He said: "We will have a look at the value of the investments and decide on the best strategy to get full value from them.

"It doesn't look good for investors at the moment. It looks as if we might be able to give the lenders a decent return, but it is unlikely we will get anything for the shareholders."

The fund is a split capital investment trust.

Split caps have different classes of shareholder, some benefiting from growth and others from income, and the investments are often taken out by parents saving for school fees or by pensioners.

"Double whammy"

But the sector has come under fire recently after about 40 of the 120 trusts ran into difficulties due to high levels of cross holdings in each other, high borrowing to invest in other companies, and stock market falls.

Mr Burton said the value of the Aberdeen High Income Trust had fallen from around 190m to just 30m, while its debts are also estimated to be 30m.

He added that the trust, which had invested in other splits, was struck by a "double whammy" of falling stock markets and a fall in the value of the splits it invested in.

No one at Aberdeen Asset Management was available to comment.

See also:

02 Oct 02 | Working Lunch
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