Simon Knott, the investment director of Rights and Issues Trust, intends to retire as the investment manager with effect from 1st September 2022. However, he will remain a non-executive director of the company.
With the help of external consultants, the board carried out a review of potential investment managers. It has decided appoint Jupiter Unit Trust Managers Limited as the new investment manager with effect from 1st September, 2022. The lead investment manager working on the trust will be Dan Nickols who will be supported by Matt Cable, both experienced investment managers within the UK Small and Mid-Cap Equity team of Jupiter, which was managing about £6bn for clients at the end of March 2022. Subject to approval by the FCA, JUTM will also become the Alternative Investment Fund Manager (AIFM) and the company will no longer be a self-managed Alternative Investment Fund
This appointment will not result in a change to the investment objective or investment policy of the company and does not require shareholder approval.
Dan has been the manager of the Jupiter UK Smaller Companies Fund since 1st January 2004 and has returned 875.6% from that date to 30th April 2022. Over the same period, the benchmark, the Numis Smaller Companies Index ex Investment Companies, returned 463.6%.
The investment style of the trust will not change. It seeks both capital appreciation as well as generating sufficient income to maintain the existing dividend policy. Dan will retain a significant proportion of the existing holdings and will maintain the policy of having a low level of investment turnover. This will ensure that the level of transaction costs continues to be low
Fees
As part of the new arrangements, the company will pay Jupiter a combined fee in respect of its services as AIFM and investment manager which, together with the operating expenses of the Company, will not exceed 0.80% per annum of net assets. The board notes that this arrangement would provide the company with the lowest ongoing charges of any investment trust with a market capitalisation of less than £500m that is focused on UK small and mid-cap companies.
Tender offer
The Board intends to make a tender offer to shareholders equal to 10% of the issued share capital at a price equal to 96% of the NAV on the date of the tender. Details of the tender offer are expected to be sent to shareholders by the end of July. None of the existing directors intends to participate in the proposed tender offer in respect of their own respective holdings.
David Bramwell, chairman, said: “The board would like to express its gratitude to Simon Knott for his 39 years of service as the company’s investment manager. Simon has produced outstanding returns for shareholders over the period of his tenure, with the net asset value per share of the company increasing 10371%, compared with a return of the FTSE All-share Index of 610%. We are very pleased that Simon will remain a non-executive director of the company following his retirement as investment manager. At the same time, we look forward to working with the Jupiter team over the transition period and as investment manager from 1 September, 2022. Jupiter’s UK Small and Mid-Cap Equity team has a formidable reputation as a deeply-resourced and top-performing investment team.”
RIII : Jupiter lined up for Rights and Issues as manager retires