Bellevue Healthcare Trust PLC (LSE:BBH) has launched a strategic review amid turmoil in the healthcare sector, mainly caused by political upheaval in the US, and the underperformance of two key holdings.
The investment trust said that all options are on the table, including possible changes to the trust’s investment manager or its future structure.
The review will be led by the board in partnership with advisers JP Morgan Cazenove, and will involve consultation with shareholders.
The process is expected to conclude in early October, when final recommendations will be set out.
Bellevue invests in a focused portfolio of global healthcare companies, but has struggled to outperform its benchmark and has seen the value of its assets fall sharply in the past year.
The trust’s annual redemption facility, which previously allowed investors to redeem their shares at a set point each year, will be paused for the duration of the review.
However, the Zero Discount Policy, introduced in April to allow investors to sell shares at or near net asset value on any trading day, will remain in place
The sector challenge is underlined by the MSCI World Healthcare Index, the investment trust's benchmark, which fell 11.8% in sterling terms, while the broader MSCI World Index slipped just 3.4%.
However, Bellevue's net asset value per share, which is a key measure of what the portfolio is worth after debts and costs, dropped nearly 22% to 121.11p in the six months to the end of May. Over the same period, the share price fell 15% to 119.20p,
Performance was hit by a combination of weak sentiment towards healthcare stocks, US political turbulence, and specific holdings.
UnitedHealth Group, a large component of the trust’s portfolio, lost half its value on a profit warning and leadership changes.
The trust’s managers said: “An unceasing tsunami of macro news flow, stemming mostly from political developments in the US, has made these past six months a challenging period for all investors, but more so for anyone focused on the healthcare sector.”
It has responded by announcing a strategic review, saying it will consider all options to improve performance and protect shareholder value.
Chairman Kate Bolsover said: "The board's primary objective remains the preservation and enhancement of shareholder value and, in launching this strategic review, we intend to consider carefully all options for the future of the company.
"We will, as always, continue to engage in active dialogue with our shareholders throughout this process."