Interactive Investor

Second longest-serving investment trust manager to retire

8th June 2022 10:12

Kyle Caldwell from interactive investor

The UK smaller company investment trust will be moving to Jupiter when its long-standing fund manager retires.

Simon Knott, who has managed the smaller company-focused Rights & Issues Investment Trust (LSE:RIII) for nearly four decades, is to retire in September.

The investment trust, which has been self-managed under Knott, will be moving to Jupiter. Its new lead manager will be Dan Nickols, supported by Matt Cable. The duo run the open-ended Jupiter UK Smaller Companies fund. The changes will be effective from 1 September.

Knott, the longest-serving investment trust manager behind Peter Spiller of Capital Gearing (LSE:CGT), will continue to be involved with the trust as a non-executive director.

David Bramwell, chair of Rights & Issues, pointing out that over Knott’s tenure “outstanding returns for shareholders” have been delivered, with the net asset value (NAV) per share of the company increasing 10,371%, compared with a return of 610% for the FTSE All-Share Index.  

He added: “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 2022. Jupiter’s UK small and mid-cap equity team has a formidable reputation as a deeply resourced and top-performing investment team.”

The appointment of Jupiter does not require a shareholder vote, as it will not result in a change to the investment objective or investment policy of the company.

A shareholder vote is required only if this leads to “material change” to how the trust invests. A recent example requiring shareholder approval was Keystone investment trust’s move to join the Baillie Gifford stable under its Positive Change team. The trust, which is now called Keystone Positive Change , moved away from its focus on UK equities to a global mandate. Given the change of approach, shareholder approval was required, and the vote was successful.

In the announcement, it was pointed out that since Nickols has been manager of Jupiter UK Smaller Companies (1 January 2004) the fund has returned 875.6%, to 30 April 2022. Over the same period, the benchmark, the Numis Smaller Companies Index excluding Investment Companies, has returned 463.6%.

Rights & Issues has total assets of £189 million. Figures from Winterflood, the analyst, show the trust trading on a discount of 12.8%. Over the past year, its discount has averaged 10.1%.

To provide investors with an exit ahead of Jupiter taking the reins, a tender offer of 10% of the shares will be held. Under this offer, investors will have the opportunity to buy back shares at 96% of the trust’s NAV.

Longest-serving investment trust managers 

Company name AIC sector Manager name Start date Time managing fund
Capital Gearing Flexible Investment Peter Spiller 05/04/1982 30 years
Rights & Issues UK Smaller Companies Simon Knott 01/01/1984 38 years
Lowland UK Equity Income James H Henderson 01/01/1990 32 years
City of London UK Equity Income Job Curtis 01/07/1991 30 years
Herald Global Smaller Companies Katie Potts 16/02/1994 28 years
JPMorgan Emerging Markets Global Emerging Markets Austin Forey 01/06/1994 28 years
Aberdeen Standard Asia Focus Asia-Pacific Smaller Companies Hugh Young 19/10/1995 26 years
British & American UK Equity Income Jonathan Woolf 03/01/1996 26 years
Atlantis Japan Growth Japanese Smaller Companies Edwin C Merner 10/05/1996 26 years
BMO Capital & Income UK Equity Income Julian Cane 01/03/1997 25 years
JPMorgan UK Smaller Companies UK Smaller Companies Georgina Brittain 02/01/1998 24 years
JPMorgan European Discovery European Smaller Companies Francesco Conte 01/11/1998 23 years
Chelverton UK Dividend UK Equity Income David Horner 12/05/1999 22 years
BMO Private Equity Private Equity Hamish Mair 01/02/2000

22 years

Source: Association of Investment Companies (AIC).

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