NAV 447p. Discount 15%
The sooner we get renamed Artemis Smaller Companies the better. |
The FTSE 100 is up 1% so far this year but the FTSE250 is down 1.9%. That's one heck of a disparity. The FTSE250 is mostly made up of domestic companies so it's clear as day Rachel from Accounts is causing no end of problems for the UK economy. |
And another Non-Exec purchase...clearly all in advance of the new manager! Will the change be the right call. Let's hope its not another Keystone! |
Non exec, Bridget Guerin, buys 6,419 shares at £3.875 |
I added another 1K at 382p half an hour before close. That's me up to 12K.
Even though the FTSE250 was up over 1% this was unchanged until just before close and you could get in at under the mid price.
This stock is very unloved just now but I think it will outperform other similar trusts next year. The change of manager to Artemis will be the game-changer. I held MAJE which was another unloved trust and they changed manager and the shares shot up 20% though not immediately. |
Could be the low point to build a holding. U never know. |
For sure, Invesco have done a bad job, when you compare the performance to something like the Aberdeen Smaller IT. I just don't see it improving until the discount falls further. |
Funnily enough I received 100% cash allocation from the ATS and ARR merger. My account was credited after the market closed last Friday. Used some of the cash to buy IPU yesterday. Having used IPU Tender proceeds to buyAATS. |
 citywire article
19 Dec, 2024
Artemis wins Invesco’s underperforming UK small-cap trust
The trust’s shares soften 1% as the board announces Artemis’ surprise appointment, persuaded by lower fees, a strong track record and the promise of significant skin in the game.
By
Jeremy Gordon, Jamie Colvin
Artemis has been appointed to take over Invesco’s underperforming Perpetual UK Smaller Companies (IPU) trust in a coup for the boutique asset manager.
In an unexpected announcement, the £139m trust’s chair Bridget Guerin said the board had appointed Artemis’ Mark Niznik and Will Tamworth to take over in early 2025, persuaded by lower fees, their open-ended fund’s strong track record and their promise to invest their own money into the trust.
IPU’s shares softened 1% as the board announced that as well as waiving fees for the first nine months, Artemis will charge a management fee of 0.65% of net assets below £50m and 0.55% above, slightly below the current Invesco fee of 0.75% of gross assets, which includes borrowing.
The win marks Artemis’ return to the investment trust sector, having seen global equity fund Mid Wynd (MWY) move to Lazard last year following Simon Edelsten’s retirement and, more recently, Artemis Alpha agree a merger with Aurora to become Aurora UK Alpha (ARR).
‘Having reviewed a variety of options, Artemis stood out as not only a top performer but also very enthusiastic about taking over the management of IPU,’ Guerin said.
‘To reinforce their commitment to managing the company, both fund managers and other staff members within Artemis have agreed to invest meaningful amounts of money into the fund. The board and managers are excited about the prospects for UK small companies, which are now trading at historically cheap levels.’
This morning’s announcement is not a complete surprise. Under Invesco fund managers Jonathan Brown and Robin West, the 4.4%-yielder’s performance had slipped, with five-year shareholder returns the worst in the trust’s 11-strong UK small-cap sector, Deutsche Numis data shows. The discount has hovered around 13% over the past 12 months and closed at 16% on Wednesday.
Over the five years to yesterday, shareholders have lost 22%, even with dividends reinvested, versus an 8.6% gain for the Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) benchmark. By contrast, Niznik and Tamworth’s £453m Artemis UK Smaller Companies fund returned 18%, according to Morningstar.
Despite this, there has been no obvious sign of shareholder discontent, with 93% of investors giving the thumbs-up at a continuation vote in June. Nor did the board indicate it was reconsidering Invesco as manager in recent months through a formal strategic review.
Yet the change marks a significant development for the trust at a time when the sector is seeing significant corporate activity, Peel Hunt’s Anthony Leatham said.
‘The adjusted fee terms and fee break are likely to be well received but we are not yet able to determine what the key differences are likely to be between the trust and open-ended fund portfolios going forward,’ he said.
The Artemis managers will be able to use the closed-end structure in several ways, including through gearing and investing in illiquid companies, to differentiate the trust from their open-ended fund. |
Nice close today. I saw the FTSE250 was turning blue at 4pm so I picked up another 1K at 382.8p. Excited about the change of manager. The Invesco brand is shot. |
Nine month fee waiver and lower management fee is a positive - I would guess the waiver fee covers the notice period required by Invesco. |
Very good move.
Arguably too many portfolio selection mistakes made by the current Manager.
I wrote to the Chair strongly suggesting a change - would guess I'm not the only one. |
brwo349 thanks for posting. Certainly could be a catalyst for improving performance and narrowing discount. Got back in with a purchase at 386.4p.
Pity they didn't sort out the stupid dividend policy. I think if they moved to paying 1% of NAV every 3 months that would certainly make the fund far more attractive. |
Is this the catalyst for a change in our fortunes??
Invesco Perpetual UK Smaller Companies Trust plc
Change of Investment Management Arrangements
Invesco Perpetual UK Smaller Companies Trust plc to appoint Artemis Fund Managers Limited as investment manager
No change to investment objective, investment policy or dividend policy
Shareholders to benefit from a reduction in management fees as well as an initial nine month fee waiver
Company to be renamed in due course to reflect the change in management and to leverage Artemis’ strong brand in UK equities
Introduction
The Board of Invesco Perpetual UK Smaller Companies Trust plc (the “Company”;) is pleased to announce that, following a review of the Company's investment management arrangements, it has entered into a conditional agreement to appoint Artemis Fund Managers Limited (“Artemis̶1;) as the Company's investment manager.
The Company's core investment objective and policy, being to achieve long-term total return for shareholders primarily by investment in a broad cross-section of small to medium sized UK quoted companies, will not change.
The Company's portfolio will be managed by Mark Niznik and Will Tamworth. They have worked as co-managers at Artemis since 2015 and each brings considerable prior expertise in the UK small-cap equity space.
The fund managers will seek to capture the small cap performance premium (3% annualised since 1955), by employing a research-driven, stock picking process to select portfolio companies from the ~1,000 companies that make up the smallest 10% of the UK market by market capitalisation. The fund managers look for good businesses, with attractive financials and seek to acquire them at reasonable valuations. The portfolio will typically contain between 50 and 70 stocks, constructed without reference to the benchmark, though remaining economically diversified.
The Board believes that the change in investment manager will provide the following benefits to shareholders
Top quartile track record: The Artemis team have a strong investment track record. The open-ended Artemis UK Smaller Companies Fund is ranked top quartile over 3, 5 and 10 years relative to the IA UK Smaller Companies peer group (to 29 November 2024). Since taking over management of the Artemis UK Smaller Companies Fund in 2011 the team has returned 259% compared to 185%% for the Deutsche Numis Smaller Companies (ex IT) Index and 181% for the IA UK Smaller Companies sector
Reduction in fees: Artemis will charge a management fee of 0.65% of net assets up to £50 million and 0.55% thereafter (compared to the fee of 0.75% of gross assets currently paid by the Company)
Waiver of management fees: Artemis will waive the first nine months of management fees post appointment
Alignment: The fund managers, alongside other individuals at Artemis, have committed to invest a significant amount into the Company
Marketing: Artemis’s distribution capability will assist in finding new demand for the Company’s shares
Information on the Artemis group
Artemis is an independent and owner-managed fund manager, offering a range of funds which invest in the UK, Europe, the US and around the world. As a dedicated, active investment house, it specialises in investment management for both retail and institutional investors. The firm was launched in 1997. The main operating entity, Artemis Investment Management LLP, is a Limited Liability Partnership and currently has 25 partners, who are fund managers and other key individuals at the firm. www.artemisfunds.com
Details on the appointment of Artemis
Artemis will receive an annual management fee of 0.65% of the net assets of the Company up to £50 million and 0.55% thereafter.
As a contribution to the costs of the change of investment manager, Artemis will waive the management fee payable to it for a period of nine months from its appointment as investment manager, as well as making a significant contribution to the Company’s marketing budget.
The investment management agreement shall be terminable by either party serving six months' notice.
Expected timing
The Company has provided notice to terminate the appointment of Invesco Fund Managers Limited as the Company's AIFM, company secretary and administrator. Subject to regulatory approval and finalising transitional arrangements, Artemis’s appointment as investment manager and AIFM is expected to become effective in Q1 2025. A further announcement will be made in due course.
Bridget Guerin, Chairman, commented:
““Having reviewed a variety of options, Artemis stood out as not only top performers but also very enthusiastic about taking over the management of IPU. To reinforce their commitment to managing the Company, both fund managers and other staff members within Artemis have agreed to invest meaningful amounts of money into the fund. The Board and Managers are excited about the prospects for UK small companies which are now trading at historically cheap levels.””;
Mark Murray, Senior Partner, Artemis, commented:
“We are delighted that the Board has appointed Artemis to manage the Company. Mark and Will have an outstanding investment proposition. Combined with Artemis’ strong brand and marketing expertise, we believe we have a compelling proposition to deliver success for the Company and its shareholders.” |
If this share behaves the same way it did last January then I'll be laughing. |
I'm buying at 389p now lol. |
The chart for AUSC and IPU this year show massive differences in performance. IPU is almost back to September 2020 level. |
The rest of UK small cap investment trusts are now moving off recent lows.
IPU usually lags, but should follow before the end of December - provided wider equity markets remain supportive. |
Are they not buying back shares? |
Problem is it's a sub scale IT with zero chance of growing by issuing additional shares above NAV.
Is this going to change..?
So a wind up, or a combination arguably the longer term outlook. |
Happy to buy sub 400p. Feels v overdone at these levels. |
UK smaller is not there for me yet, although some of them are close. Need some depressing event to sway it. |
I was tempted this afternoon but have held off. |
Ive been adding at under 400p. |
Awkward one for me, this. Discount is too wide to sell, but not wide enough to buy more. Also hard to see what positive news could push it higher except Labour falling apart, they only seem interested in listening to big business. |
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