Schroder UK Mid Cap Fund (SCP) has announced a number of strategic initiatives, including a management fee reduction, continuation vote and buyback policy designed to further strengthen the company’s investment proposition and deliver value for all of its shareholders.
Management fee reduction
The board has agreed a management fee reduction with Schroder Unit Trusts Limited. The current management fees are (1) 0.65% per annum on net assets plus short-term borrowings, less cash up to £250m and (2) 0.60% per annum of any such amount in excess of £250m.
With effect from 1 April 2025, the reduced management fee will be calculated based on the lower of (1) 0.60% per annum of market capitalisation and (2) the current net asset value-based fee arrangement.
Continuation vote
The board is introducing a continuation vote to be proposed at the AGM to be held in 2028 and, if passed, every three years thereafter to ensure that the company remains relevant to its shareholders and in line with best corporate governance practice.
The continuation vote will be proposed as an ordinary resolution requiring a simple majority of those voting to be passed. If any continuation vote is not passed, the directors will put forward proposals for the reconstruction or winding-up of the company to shareholders for their approval within six months following the date on which the continuation vote is not passed.
Buyback policy
The board intends to use its authority to buy back shares more actively in order to inhibit a wide discount to NAV from developing in the company’s shares in the future. The company’s authority to repurchase up to 14.99% of its issued share capital (being 5,183,720 ordinary shares) was refreshed at the AGM held on 24 February 2025.
Harry Morley, chair of Schroder UK Mid Cap Fund plc, commented:
“I have spoken widely to our shareholders and appreciate the significant support indicated both for our differentiated proposition and our closed-ended investment trust structure. We believe the strategic measures announced today will further strengthen the investment proposition of our company for the benefit of current and prospective shareholders. We remain confident in the continuing attractions of UK mid-cap equities and believe that the company is well positioned to capitalise on the future growth potential of the asset class.”
SCP: Schroder UK Mid Cap Fund announces management fee reduction, continuation vote and buyback policy
