Biotech Growth (BIOG) saw a big vote against the re-election of Orbimed fund manager Geoff Hsu to the board at the annual general meeting in London yesterday. Although the co-manager, who runs its £330m portfolio with Josh Golomb, was re-appointed he received the support of 63.1%, or nearly 2.9m, of votes with 36.9%, almost 1.7m, opposed. This was sharply down from last year’s AGM when he was backed by 99.3% of votes. However, turnout was low with only around 24% of shareholder votes cast. BIOG said it believed the vote reflected concerns about a fund manager representative serving on the board and said it would engage with shareholders to “better understand their views and will consider whether any changes to the company’s governance arrangements would be appropriate”. It said Hsu had been a director of BIOG since May 2018 and had made a valuable contribution through his investment experience and market knowledge. “The board also notes that Mr Hsu does not serve on any board committee and receives no fee for acting as a director,” it added. BIOG has rebounded from a biotech bear market that ended in May last year. Its shares have more than doubled over 12 months with a 103.6% gain, having made just 19.8% over five years but 146.1% over ten years. Yesterday the managers’ focus on smaller drug developers was vindicated when Eli Lilly agreed to buy AtaiBeckley, a 1.1% holding, for $2.8bn.
James Carthew, head of investment company research at QuotedData, said: “The vote against Geoff Hsu should not be seen as BIOG shareholders being dissatisfied with his performance, rather it reflects a central tenet of investment companies that shareholders – through the directors they elect – are in charge. The managers are just one of a number of hired hands, like the auditor and the broker. Managers should report to the board, there is no need for them to be on it.”
Gore Street Energy Storage (GSF) has seen Saba Capital lift its stake from 15.1% to 16.8%. The activist hedge fund, which is seeking to oust the board of Workspace (WKP) next week, bought more shares and swap derivatives in GSF on Wednesday after its annual results disappointed investors with a 15% quarterly fall in net asset value caused by lower revenue forecasts.
Residential Secure Income (RESI) saw Asset Value Investors, manager of AVI Global (AGT) and MIGO Opportunities (MIGO), lift its stake from 6% to 10.1% on Wednesday after the winding-down real estate investment trust announced the completion of the sale of its retirement property portfolio to Living REIT (LIVE) for £45m cash and £62.3m in new shares. These will be distributed to shareholders.
GCP Asset Backed Income (GABI), the £110m debt fund two years into a wind-down, is to return £45m to shareholders by a fourth compulsory share redemption. The shares will be bought back at a price of 68.6p, their net asset value (NAV) minus a dividend payment. This follows the £41.4m sale last month of three senior loans secured against UK care homes. The company also said NAV per share fell by 4.47p, or 6%, to 70.2p in the first half of this year due to revaluations of the increasingly concentrated portfolio.
Stay a step ahead. Our daily newsletter brings you the latest on investment trusts and active ETFs. Subscribe here.
