Simon Knott, the veteran fund manager of Rights and Issues (RIII ), is to retire in September with the UK smaller companies trust he has run for 39 years passing to Dan Nichols at Jupiter Fund Management.
David Bramwell, the trust’s chairman, said: ‘Simon has produced outstanding returns for shareholders over the period of his tenure, with the net asset value per share of the company increasing 10,371% compared with a return of the FTSE All-Share index of 610%.
‘We are very pleased that Simon will remain a non-executive director of the company following his retirement as investment manager. At the same time, we look forward to working with the Jupiter team over the transition period and as investment manager from 1 September,’ Bramwell said.
The trust, which has total assets of £189m and stands on an 11% discount to net asset value (NAV), will hold a 10% tender offer to buy back shares at 96% of their NAV for investors who do not want to follow the board to Jupiter.
There has been speculation for some time over what would happen to Rights and Issues when Knott decided to call it a day.
Bramwell said the board had carried out a ‘thorough review of potential investment managers’ and had decided Jupiter offered the best fit as a ‘specialist, high conviction, active asset manager’.
The mandate win is a boost for Jupiter, a FTSE 250-listed business that has struggled with investor outflows and the loss of several investment trusts in recent years, although its takeover of Merian brought the big Chrysalis (CHRY ) growth capital fund.
Rights and Issues highlighted the ‘outstanding’ long-term record of Nickols (above), who has managed the Jupiter UK Smaller Companies open-ended fund since January 2004. From then up to 30 April he generated a total return of 875.6% compared to the 463.6% from the Numis Smaller Companies index (excluding investment companies).
Nickols started his career at Deloitte and Touche in 1992 and became a fund manager of the Gerrard UK Smaller Companies fund in 1999. He last held a Citywire A-rating for his performance in early 2021, having been rated for most of the previous seven years.
Rights and Issues said Nickols, who will be supported by Matt Cable, had agreed to retain a ‘significant proportion’ of the trust’s existing holdings and to maintain Knott’s low stock turnover policy to keep down costs.
Jupiter will have a dual role of fund manager and alternative investment fund manager (AIFM) for which it will earn a combined fee that, together with operating expenses, will not exceed 0.8% a year of net assets. The board believes this will make it the cheapest UK small and mid-cap trust under £500m.
Magnus Spence, head of investment trusts at Jupiter, said: ‘Jupiter is delighted to be chosen to manage the investment portfolio of the company following Simon Knott’s long and distinguished career. We are excited to be given the opportunity to manage a closed-ended fund at this time in a segment of the market which has many outstanding investment opportunities.’
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