Fidelity Emerging Markets Limited (FEML) has agreed to buy back a 25.7 per cent stake held by Strathclyde Pension Fund.

The agreement will see FEML buy back 16.4 million participating preference shares, representing 25.7 per cent of the company’s voting capital, at a 14 per cent discount to net asset value (NAV).

The transaction is conditional on shareholder approval at an extraordinary general meeting (EGM) to be convened in October, with completion anticipated in early November.

If approved, the shares will be cancelled, reducing FEML’s share capital and enhancing value for ongoing investors.

The board estimates an uplift of around 4 per cent to NAV per share as a result of the transaction, and confirmed that major shareholders had indicated support for the deal.

“The board believes that the repurchase is in the best interests of the company and shareholders as a whole,” FEML said, adding that the move would “increase the alignment of interests among the remaining shareholder base” and support efforts to keep the discount to NAV in single digits.

The decision by Strathclyde to exit its position comes amid a broader strategic shift at the £31bn Local Government Pension Scheme (LGPS), which has been reallocating assets away from listed equity holdings in favour of private markets and impact investments.

For example, the fund has significantly increased commitments to its 'Direct Impact Portfolio', targeting infrastructure, affordable housing, renewables and SME financing, and has also redirected more than £4bn into low-carbon indices as part of its climate action plan.

These changes are part of a wider rebalancing across the UK pensions landscape, with schemes increasingly diversifying into private and productive finance while reducing exposure to traditional equities.

In recent months, industry voices have also urged schemes to invest more in UK assets to support long-term growth and national priorities.

FEML, which invests in a diversified portfolio of emerging market companies under Fidelity International’s management, said it remained confident in delivering long-term performance for shareholders.

The board noted that, under Fidelity’s stewardship, the trust has outperformed its benchmark over the past three years, and that the buyback should help remove potential market overhang from Strathclyde’s large position.

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