Investors in the Rights & Issues Investment Trust will have to get used to a new face at the head of the portfolio after longstanding manager Simon Knott announced he is to retire at the end of August.
The board therefore has announced the appointment of Jupiter Unit Trust Managers Limited as its new investment manager with Daniel Nickols stepping in from 1 September.
Knott, who along with his family ow 16% of the shares in the trust, will remain at the company as a non-executive director.
FE fundinfo Alpha Manager Nickols has been managing the £927m Jupiter UK Smaller Companies fund for 18 years and since he took over 2004 the fund’s returns of 875.6% are 479.3 percentage points more than its peer group.
After the takeover, Nickols plans to hold a significant proportion of the present equities in smaller UK companies, seeking to appreciate capital and to maintain the current dividend policy of the trust.
Investors in the Rights & Issues will hope that the new manager has the same expertise as the outgoing Knott. During his tenure, the £173.3m trust consistently outperformed its IT UK Smaller Companies sector, as shown in the chart below.
Trust’s performance against sector
Source: FE Analytics
Rights and Issues chair David Bramwell seemed confident, noting that “Jupiter’s UK small- and mid-cap equity team has a formidable reputation as a deeply-resourced and top-performing investment team”.
Ewan Lovett-Turner, head of investment company research at Numis Securities, said that it was “not a surprise” that Knott had stepped down given the length of his tenure.
He added that he would normally like to see a shareholder vote on a major change in approach/manager, but noted that it is not required, “given there is no change in investment policy, and that the shareholder register is pretty concentrated and we would expect that they would have been consulted,” he said.
In addition, there will be a partial exit for 10% of share capital, with investors able to sell at a 4% discount to the current net asset value (NAV).
Jupiter will also assume the role of alternative investment fund manager (AIFM), marking the end of Rights & Issues’ self-management. For both its services, Jupiter will receive a cumulative fee, which, together with the operating expenses, will not exceed 0.8% per annum of net assets.
Jupiter is member of the FTSE 250 Index but has struggled over the first quarter of 2022 as markets have tumbled. Shares in the company are down 31.3% since their peak on 4 January.