The Invesco Perpetual UK Smaller Companies trust has switched managers and appointed Artemis’ Mark Niznik and William Tamworth to replace Invesco’s Jonathan Brown and Robin West.
The trust’s board chose Artemis on the back of Niznik and Tamworth’s top-quartile performance for their open-ended Artemis UK Smaller Companies fund. It is the second-best performing fund in its sector over three years and fifth over 10 years.
Artemis will charge a lower management fee of 0.65% of net assets up to £50m and 0.55% thereafter (compared to the current fee of 0.75% of gross assets). It will also waive the first nine months of management fees.
Furthermore, Niznik, Tamworth and other individuals at Artemis have committed to invest a significant amount in the trust, creating a strong alignment of interests, the board said.
Directors were also attracted by Artemis’ marketing and distribution reach and its ability to assist in finding new demand for the company’s shares.
The trust currently has a £117m market capitalisation. It was trading at a 15% discount as of 30 November.
Subject to regulatory approval, Niznik and Tamworth will take over the portfolio in the first quarter of 2025. They will employ a research-driven process to pick 50 to 70 stocks, focussing on good businesses with attractive financials, and will aim to buy them at reasonable valuations.
Niznik said: “I am incredibly excited to have the opportunity to manage this trust again, having first managed it over 30 years ago. Will and I intend to use the same disciplined investment process we have successfully employed on the unit trust while taking advantage of the benefits of a closed-ended structure.”
Tamworth added: “The smaller companies universe is home to a wide range of market-leading businesses that we believe are trading at attractive valuations for investors with a medium-to-long-term mindset. The conditions for the long-term small-cap premium of 3% per annum outperformance relative to large-cap companies remains in place.”