Change of Manager and Board Changes
Further to the announcement on 25 January 2016, the Company is pleased to confirm that Phoenix Asset Management Partners Limited ("Phoenix") has been formally appointed as the Company's investment manager on the terms previously announced with effect from 28 January 2016. The Company's existing investment management agreement with Mars Asset Management Limited has been terminated.
As previously announced, Phoenix will not earn an ongoing annual management fee but will be paid an annual performance fee equal to one third of the outperformance of the Company's net asset value total return (including dividends and adjusted for the impact of share buybacks and the issue of new shares) over the FTSE All-Share Total Return for each financial year. The Company's net asset value return will be based on the weighted number, and net asset value, of the shares in issue over the relevant period.
The total annual performance fee will be capped at 4 per cent. per annum of the net asset value of the Company at the end of the relevant financial year, in the event that the net asset value per share has increased in absolute terms over the period, and 2 per cent., in the event that the net asset value per share has decreased in absolute terms over the period. Any outperformance that exceeds these caps will be carried forward and only paid if the Company outperforms, and the annual cap is not exceeded, in subsequent years.
The performance fee will be subject to a high water mark so that no performance fee will be payable in any year until all underperformance of the Company's net asset value since the last performance fee was payable has been made up. The performance fee will also be subject to a clawback if over a rolling period of three years following the end of the last financial year for which a performance fee was payable the Company underperforms.
The performance fee will be paid to Phoenix in ordinary shares (issued at the net asset value per share on the date of issue) and such shares must be retained by Phoenix for a minimum period of three years from the date of issue.
As clients of Phoenix currently hold approximately 23.2 per cent of the current issued share capital of the Company (excluding treasury shares) Phoenix is deemed to be a substantial shareholder of the Company and therefore a related party of the Company under Chapter 11 of the Listing Rules. Accordingly, the entering into of the new investment management agreement with Phoenix amounts to a smaller related party transaction as defined in Listing Rule 11.1.10.
As a result of these changes James Barstow has resigned from the Board and Tristan Chapple, research director of Phoenix, has been appointed as a non-executive director of the Company with effect from 28 January 2016. There is no further information required to be disclosed under Listing Rule 9.6.13 in relation to this appointment.
Posted on 29 January 2016