Long-standing co-manager of the MIGO Opportunities Trust, Nick Greenwood, is stepping back from day-to-day responsibilities after over two decades.
Tom Treanor, director and fund manager at Asset Value Investors (AVI), will be joining Charlotte Cuthbertson as co-manager, while Greenwood will remain with AVI in a consultancy capacity and continue to support the trust.
MIGO’s board and AVI have also unveiled a new approach which will see a concentration of the trust’s portfolio of 40 holdings to a more focused 10-15 core positions. This shift aims to increase the trust’s ability to engage more meaningfully with investee boards.
“Effective activism involves dealing with boards, managing relationships with other shareholders and knowledge of the legal framework, as well as having a talent pool of directors to call upon when boards need improving,” said Treanor.
Matthew Read, head of production and senior research analyst at QuotedData, said these changes mark a “significant evolution” for MIGO, with a “bold move” toward a higher conviction, activist-led strategy that seeks to exploit the deep discounts across the investment trust sector.
“The reduction in holdings and more aggressive engagement with investee boards echoes the kind of hands-on approach that has delivered strong results for AVI elsewhere,” he noted.
The fee structure is also changing, with the annual management charge dropping from 0.65% to 0.35% of the lower of net asset value (NAV) or market cap. In addition, there is a new performance fee of 15% on NAV returns in excess of a SONIA + 3% hurdle, subject to a high watermark and an overall annual fee cap of 2.5%.
AVI aims to reinvest 25% of any performance fees earned into MIGO shares, with a three-year lock-up.
The board also intends to introduce a capital return mechanism to cap NAV at £150m.
Davidson said this move will allow MIGO to remain “nimble”, adding that the updated fee structure “incentivises performance versus asset-gathering”.
“We expect these changes to strengthen the delivery of higher and sustainable returns,” he said.
Read noted the revised fee structure, particularly the reduction in base fees and performance alignment via share reinvestment, as a “notable positive for shareholders”.
“The proposed NAV cap and capital return mechanism add a further layer of discipline that should keep MIGO agile and aligned with shareholder interests,” he concluded.