The Investment Company (INV), one of the oldest but smallest investment trusts with a market value of just £6.5m, is changing fund manager.
Chelverton Asset Management (CAM), manager of the £31m Chelverton UK Dividend (SDIV) trust, has relinquished the mandate for the UK smaller companies minnow after less than three years following a strategic review announced by the investment company in December.
INV, which claims to have been launched in 1868, the same year as the £6bn F&C (FCIT) investment trust, appointed Chelverton in July 2023 when it stopped being a self-managed fund.
The contract has now been awarded to Dowgate Wealth, manager of the £42m Onward Opportunities (ONWD) small-cap trust run by fund manager Laurence Hulse.
Dowgate is not seeking to merge INV with ONWD to bulk the latter’s assets but will relaunch it as a multi-asset, inflation protecting fund run by its market strategist Jeremy McKeown. There will be a 100% tender offer at a 5% discount for INV shareholders who wish to exit. This will be accompanied by a placing and subscription offer to bring in new investors.
Ian Dighe, INV chair, said the board was grateful to Chelverton’s support. “We look forward to announcing further details in due course and, with the support of our shareholders, securing an exciting future for the company.”
Ben McKeown, investment director at Dowgate Wealth, said: “Our strategy will revitalise one of the market’s most historic vehicles, capitalising on the distinct structural opportunities emerging in today’s global economy.”
In the past three years, the capital growth, non-dividend paying fund has returned 14% to shareholders, less than half the 35% return from the Deutsche Numis Smaller Companies index and ranking it 10th out of 16 UK smaller companies trusts.
Today, the shares rallied 4.2% to 73.49p, reducing their discount to net asset value to around 8%.
Half-year results showed NAV decreased 1.9% to 78.14p per share in the six months to 31 December.
Stay a step ahead. Our daily newsletter brings you the latest on investment trusts and active ETFs. Subscribe here.
