Investment manager

Gresham House Strategic abandons investment manager after review

Gresham House Strategic has abandoned Gresham House Asset Management as investment manager following a strategic review.

In an update today (October 11), the trust said it entered into a new investment management agreement with Harwood Capital yesterday, subject to Financial Conduct Authority approval.

It comes as in May, the company served its 12-month notice of termination on Gresham House Asset Management Limited over concerns about the decline in the trust’s share price relative to the net asset value which prevented it from raising additional equity capital.

The discount stood at 6.3% on March 31, 2021, up from 15% in March the previous year.

Today, the trust said it has terminated its investment management agreement with GHAM with immediate effect after a “thorough process”.

He stressed that one of the main benefits of the change was a significant reduction in management costs.

Under the agreement with Harwood, the management fee will increase from the current level of 1.5 percent of NAV per annum to 1.25 percent of NAV up to £ 25million and 1 for cent of the NAV per annum thereafter.

If the net asset value of the trust exceeds £ 100million, Harwood has agreed to cap the aggregate performance fees and management fees at 3 percent of the net asset value.

Helen Sinclair, Acting President of Gresham House Strategic, said: “We, as independent directors, strongly believe that Harwood has demonstrated exceptional long-term expertise as a specialist capital investor. -public and private investment. Harwood intends to commit capital to invest in the team and the marketing of the business.

“The independent directors believe that this, together with continued strong investment performance, will help achieve an appropriate scale and close the haircut over the medium term.

“All of these initiatives are in the long term interest and benefit shareholders. The management fees are competitive saving shareholders around £ 270,000 on an annualized basis based on the NAV published on October 4, 2021. “

Sinclair added, “The reduction in performance fees should be even more significant for shareholders. We would like to thank GHAM for his role as investment manager and the creation of shareholder value during his tenure. “

The trust said all of the independent directors on the board supported Harwood’s appointment as the company’s new investment manager based on the company’s track record of investing in small-cap stocks and Harwood’s proposed appointment of Richard Staveley as lead fund manager.

There will be no material change to its current investment policy, he added.

However, the name of the company will be changed to Rockwood Strategic plc, subject to Harwood’s appointment as director becoming effective.

Christopher Mills, CEO of Harwood, said: “By taking over the management of investments from GHS, we have a strong belief that we can increase value for the benefit of all shareholders.

“We ensure the continuity of the fund’s management by bringing in Richard Staveley to manage the business, a role he previously held, during which he led the company’s investment strategy and supervised excellent performance, as recognized by the independent directors.

Source link