Octopus Renewables Infrastructure Trust PLC (LSE:ORIT) (ORIT) has initiated a capital reallocation programme targeted at what the trust sees as an unfair discount to its net asset value.
In an RNS announcing the £10 million share buyback, ORIT bemoaned “the significant discount at which the company's shares are currently trading compared to their NAV”.
ORIT pointed out recent transactional highlights, including a £92 million disposal of wind farms in Poland at a 21% premium to the assets' holding value, as proof that the current share price “does not accurately reflect the value of the company's portfolio”.
It’s representative of a broader valuation trend among UK investment trusts, which are trading at “some of the wildest discounts that we have seen in a long time”, according to a recent Peel Hunt research piece.
Buybacks are a popular tool for recovering perceived lost market value. According to Peel Hunt, at least £3 billion worth of shares were bought back by closed-ended investment trusts in 2023.