The Princess Private Equity trust is set to end its foreign exchange hedging strategy from 1 April, and has reconfirmed its dividend objective and appointed a new chair.
In the trust's Q4 update published on the London Stock Exchange today (28 February), the £1bn investment trust said that ceasing hedging will reduce the volatility of cash flows. However, the NAV volatility will increase as a result of changing FX rates. This comes after an unexpected €60 million cash outflow last November to settle FX hedges as a result of the US dollar's outperformance, which forced the suspension of the second interim dividend in order to preserve liquidity, Winterflood analysts wrote in a research note. The contracts which are currently in place are of short durat...
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