Name change, share split and fees
RNS Number : 0152P
TR European Growth Trust PLC
14 October 2021
 

TR EUROPEAN GROWTH TRUST PLC

Legal Entity Identifier: 213800N1B1HCQG2W4V90

14 October 2021

 

TR EUROPEAN GROWTH TRUST PLC

 

Change of Name, Share Split, Change in Management Fees, Change in Benchmark and Smaller Related Party Transaction

 

TR European Growth Trust PLC (the "Company") has today published its annual report and accounts for the period ended 30 June 2021 which contained details of certain changes that the Board intends to implement following a strategic review of the Company's investment objective, operations and positioning in the market. 

 

The review concluded that the investment objective and policy continued to meet investors' demands and the investment approach was well suited to the objective and the long-term nature of the Company. However, the review highlighted that more could be done to improve the Company's positioning in relation to the retail investment market and a number of changes have been proposed which are intended to assist in bringing the Company's investment proposition to this growing section of the market being, a change in the Company's name, a share split and a reduction in management fees. In addition, the Board is proposing to change the benchmark to provide greater operational efficiency. Full details of the proposed changes are set out in this announcement.  

 

Change of Name

 

The Company intends to apply to change its name to "The European Smaller Companies Trust PLC". The Board is of the view that the proposed name better reflects the Company's investment strategy of investing in European smaller companies. In conjunction with the name change, the Company's ticker will also change to ESCT. An update on timing will be provided in due course following the application being made to change the Company's name.

 

Share Split

 

The Company is proposing to undertake a sub-division (the "Share Split") of each ordinary share of 12.5p ("Existing Ordinary Shares") into eight new ordinary shares of 1.5625p each ("New Ordinary Shares") subject to the approval of the Share Split at the Company's Annual General Meeting ("AGM"), which will be held on Monday, 29 November 2021 at 12.30pm. The Share Split is intended to improve the liquidity of the Company's shares and enhance the ability of investors to make more efficient regular monthly investments on share dealing platforms.

 

The Share Split is also conditional on the New Ordinary Shares being admitted to the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's main market for listed securities. Applications for such admissions ("Admission Applications") are being made and it is expected that such admissions will become effective, and that dealings in the New Ordinary Shares will commence, at 8.00am on Monday, 13 December 2021, at which time the Share Split will become effective. The last day of trading in the Existing Ordinary Shares is expected to be Friday, 10 December 2021 and the record date for the Share Split is 6.00pm on that date ("Record Date").

 

Shareholders will receive eight New Ordinary Shares in exchange for each Existing Ordinary Share held at the Record Date and voting rights will be amended to being one vote per New Ordinary Share. CREST accounts are expected to be credited with New Ordinary Shares on Monday, 13 December 2021 and share certificates in respect of the New Ordinary Shares are expected to be posted to shareholders no later than Monday, 17 January 2022.

 

The New Ordinary Shares will have a new ISIN and SEDOL as follows:

 

New ISIN: GB00BMCF8689

 

New SEDOL: BMCF868

 

The ticker for the New Ordinary Shares will initially continue to be TRG, however, on the change of the Company's name as described above, the ticker will change to ESCT.

 

The New Ordinary Shares will rank pari passu with each other and will be subject to the same rights and restrictions as the Existing Ordinary Shares. A holding of New Ordinary Shares following the sub-division will represent the same proportion of the issued ordinary share capital of the Company as the corresponding holding of Existing Ordinary Shares.

 

On the basis that there are currently 50,108,397 Existing Ordinary Shares in issue, following completion of the Share Split, there will be 400,867,176 New Ordinary Shares in issue. Therefore, as at 13 December 2021, the total number of voting rights in the Company will be 400,867,176.

 

 

Change in Management Fees

 

The Board and the Company's investment manager, Henderson Investment Funds Limited ("Investment Manager"), have agreed revised management fees of 0.55% of net assets up to £800m and 0.45% thereafter, with effect from 1 October 2021. This is a reduction from the existing management fee arrangements of 0.6% of net assets up to £500m and 0.5% thereafter.  The Company's existing performance fee arrangements remain unchanged (save as described below in respect of the benchmark).

 

 

Change in Benchmark, Non-Material Change in Investment Policy and Smaller Related Party Transaction

 

As a matter of operational efficiency, the Company will replace its current benchmark, the Euromoney Smaller European Companies (ex UK) Index ("EMIX Europe SC Index") with the MSCI Europe ex UK Small Cap Index ("MSCI Europe SC Index"). The EMIX Europe SC Index and the MSCI Europe SC Index have a high level of correlation, and this change is not a reflection of any change in investment approach by the Company or the Investment Manager.  This change will improve the quality of the benchmark data available to the fund management team on a day-to-day basis and aligns the benchmark with a number of the Company's peers. This change will become effective from 1 July 2022, the start of the next financial year.

 

Whilst this change will not affect the management of the portfolio, it will have an indirect impact on the Company's formal investment policy, which refers to the benchmark, and performance fees payable by the Company to the Investment Manager, which are determined based on performance relative to the benchmark.

 

The change in investment policy to adopt the MSCI Europe SC Index as the reference benchmark is considered to be a non-material change and the policy will be updated with effect from 1 July 2022.

 

The Company and the Investment Manager have entered into an agreement (the "Agreement") to reflect the change in the benchmark from EMIX Europe SC Index to MSCI Europe SC Index in connection with the calculation of the performance fee with effect from 1 July 2022. The performance relative to the benchmark for years prior to 1 July 2022 for the purposes of the calculation of any performance fees (which is calculated on a three-year rolling basis), shall remain unchanged and will continue to be calculated relative to EMIX Europe SC Index.

 

The Agreement is considered a smaller related party transaction for the purposes of Listing Rule 11.1.10R.

 

Enquiries:

 

Christopher Casey

Chairman

TR European Growth Trust PLC

Telephone:  020 7818 5919

 

Ollie Beckett

Fund Manager

Janus Henderson Investors

Telephone:  020 7818 4331

James de Sausmarez

Head of Investment Trusts

Janus Henderson Investors

Telephone:  020 7818 3349

Laura Thomas

Investment Trust PR Manager

Janus Henderson Investors

Telephone: 020 7818 2636

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
MSCUOVWRAOURAAA