Scottish Mortgage (SMT) has reassured shareholders it will not move annual general meetings online unless in exceptional circumstances after a 24.1% vote against a change empowering the board to hold virtual AGMs.
Although over 260m shares followed SMT’s recommendation in voting for resolution 17 at the AGM on Thursday, nearly 82.5m were opposed to the proposed change in the articles of association, a high level of dissent that requires a formal response by the board.
“With regard to the new articles, the board reiterates that, although the new articles permit shareholder meetings to be held by wholly electronic means, it has no intention of holding a virtual-only meeting if it can reasonably be avoided and remains committed to future general meetings incorporating a physical meeting at which shareholders can meet the board face to face,” the £16.3bn global equities trust said.
The board, chaired by Christopher Samuel, will contact the dissenting shareholders and provide an update on their views within six months along with any actions. All the other resolutions relating to the election of directors, approval of the report and accounts, board pay, share issuance and buybacks were approved with bigger majorities.
In April SMT gained shareholder approval for an extra £250m capacity to invest in unquoted companies after SpaceX’s doubling in value pushed its private equity holdings to 37%, above a 30% cap.
Partners Group Private Equity (PEY), the £498m investment company struggling with a 38% share price discount, has not replenished its share buyback programme after suffering negative cash flow in the second quarter. The company, whose assets are run by Switzerland’s Partners Group, said under the terms of its capital allocation policy adopted two years ago it would not add to its buyback funds after seeing more money go out than come in during the three months to 30 June. PEY, which plans to realise 30% of its portfolio in response to the wide discount, will deploy the €13.5m remaining in its buyback pool agreed in April. This was due to expire on 31 July but will now be extended to 30 September. The announcement came despite the company enjoying a “healthy flow” of €33m of distributions in the June quarter with “muted” levels of new investment alongside the €22.3m payment of its first interim dividend. That implies that its existing investment commitments made it cash flow negative.
James Carthew, head of investment company research at QuotedData, said: “PEY has commitments to LLP investments that it cannot wriggle out of without incurring penalties. It seems likely that drawdowns matched or exceeded distributions. It would have been helpful if they told us that.”
Aurora UK Alpha (ARR) co-manager Gary Channon has called on Barratt Redrow (BTRW), the UK’s largest housebuilder, to buy back up to £1bn of its undervalued shares or risk a shareholder revolt against. Channon is co-founder and chief investment officer of Phoenix Asset Management Partners, which is Barratt Redrow’s third largest shareholder with a 5% stake. The Sunday Times reported that he and other investors are concerned that BTRW is vulnerable to a takeover bid unless it acts to prop up a share price that has slumped by a third in the past year. “We will escalate if nothing happens. This is the first shot,” Channon warned after publishing a 450-slide presentation on the builder which pointed out that if the group stopped buying new land and “built out” its existing sites, it could return the equivalent of £7.50 a share to shareholders. BTRW closed at 281p on Friday and rose 5.65p or 2% this morning to nearly 287p. Aurora UK Alpha, a £272m UK All Companies investment trust that absorbed Artemis Alpha in a merger two years ago, held 14.1% in BTRW at 31 May, its third biggest position.
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