EP Global Opportunities will become one of the few remaining self-managed investment trusts
By Jessica Tasman-Jones, Portfolio Adviser, 25 Oct 21
The EP Global Opportunities investment trust is planning to ditch its third-party management arrangement with Franklin Templeton Investments subsidiary, Edinburgh Partners, and become self-managed with veteran investor Sandy Nairn continuing to manage the value-oriented portfolio.
Although the £101m investment trust will be self managed, 70% of the portfolio will be sub-advised by Franklin Templeton Investment Management. It is also seeking an expansion of its investment policy so it can hold other investment companies and funds.
Under the sub-advisory arrangement the EP Global Opportunities investment trust board is proposing, Nairn will remain employed by Franklin Templeton.
EP Global Opportunities bucking the trend away from self-managed investment trusts
QuotedData head of investment companies James Carthew said self-managed trusts are “vanishingly rare” and described EP Global Opportunities’ move as unusual. Just last week, the board of Scottish Investment Trust announced proposals to ditch its self-managed model and shift management to a third party via a merger with the JPMorgan Global Income & Growth trust.
The EP Global Opportunities board expected most shareholders would wish to maintain their investments in the company but a tender offer would be available for those who were unhappy with the arrangements. 1607 Capital Partners is the largest shareholder with a 14.8% stake, followed by Interactive Investor (12.7%) and Nairn himself (9.2%).
“EP Global is already on the small side and a decent sized tender will exacerbate that,” said Carthew. “While self-managed, EP Global will still be bound up with the same management company and individual manager that it had previously. However, as the fund shrinks, the capacity to cover markets effectively as a self-managed trust could become disproportionately expensive. It makes sense therefore to outsource the management of parts of the portfolio through investment in other funds.”
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