Artemis looks to the future as it renames Invesco small-cap trust

Artemis UK Future Leaders born after strongly-performing duo take control of former Invesco trust today.

Invesco Perpetual UK Smaller Companies has been renamed Artemis UK Future Leaders as Artemis managers Mark Niznik and Will Tamworth take the helm of the underperforming trust.

The £129m trust, which traded under the IPU ticker on the London stock market, will now be known by its new moniker and a new ticker, AFL.

Artemis was awarded the mandate at the end of last year, with the board swayed by lower fees, the track record of Niznik and Tamworth’s open-ended smaller companies fund, and their promise to invest their own money in the portfolio.

The managers have worked together for a decade and jointly manage the open-ended Artemis UK Smaller Companies fund. Since they teamed up on the fund in 2015, it has outperformed its Deutsche Numis UK Smaller Companies index by an overall 2.2% each year.

Given the pair will use the same strategy for the closed-end fund, shareholders will no doubt by hoping for a turnaround in the performance of the trust. It languishes on a current discount of 16.6% after the net asset value (NAV) declined 5.6% over the past year, while the shares slid 12.9%.

Under Invesco’s Jonathan Brown and Robin West, performance has been even worse over three years, with the NAV down 16.3% and the shares down 12.6%, including dividends. 

Niznik said the Artemis duo have both committed to making ‘substantial personal investments’ to align their interests with shareholders and reflect ‘our confidence in both the long-term prospects and the opportunity today’.

‘The case for the long-term small-cap premium of 3% per annum outperformance relative to large-cap companies is stronger than ever,’ he said.

Tamworth added that buying UK small-caps when sentiment was weak has ‘delivered strong returns’ and the small-cap universe is currently trading at ‘attractive valuations for investors with a medium-to-long-term mindset’.

‘A closed-ended investment trust is the ideal vehicle to access companies slightly further down the market-cap spectrum,’ he added.