Proposals re Investment Manager & Shareholdings
30/03/2023 07:00
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RNS Number : 6835U Investment Company PLC 30 March 2023
The information contained within this announcement is considered by The
Investment Company plc to constitute inside information pursuant to Article 7
of EU Regulation No. 596/2014 as it forms part of domestic law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via a Regulatory Information Service, this inside information
will be considered to be in the public domain.
The Investment Company plc
("The Investment Company" or the "Company")
Proposed appointment of Investment Manager, proposed board changes, proposed
purchase by the Company of its own ordinary shares
and
Proposed issue of ordinary shares in the Company
Further to the Company's announcement on 20 February 2023, the board of The
Investment Company is pleased to announce that, following a thorough review of
available opportunities, the Company has entered into discussions to:
· appoint Chelverton Asset Management Limited ("Chelverton") to act
as investment manager ("Investment Manager") to the Company with a new
investment strategy of investing primarily in quoted equities of UK small and
mid-cap quoted companies to achieve long-term capital growth;
· provide an opportunity for shareholders to either retain some or
all of their shareholding in the Company with the proposed Investment Manager
offering a new investment strategy or, alternatively, to realise their
investment in cash (at the prevailing net asset value per ordinary share,
adjusted for transaction costs); and
· undertake an issuance of ordinary shares to existing and new
shareholders with the aim of increasing the size and liquidity of the Company,
(together the "Proposals").
Founded in 1998, Chelverton is an independent, employee-owned fund management
firm with a strong focus on performance and investor outcomes. As at 28(th)
February 2023 Chelverton managed c.£1.7bn across a number of mandates
encompassing both open-ended and closed-ended UK and European focused-funds
including the MI Chelverton UK Equity Growth Fund, managed by the UK Equity
Growth Team. By focussing on long-term investor returns that can be generated
by companies with rising cashflows, the team seeks to take advantage of the
potential for superior long-term capital performance of certain UK small and
mid-cap quoted companies.
Should the Proposals become effective, in order to generate long-term capital
growth, the Company intends to pursue an investment strategy of investing in
cash-generative UK small and mid-cap quoted companies that are expected to
grow faster than the UK stock market as a whole over the long term and which
can finance their own organic growth.
This strategy has been successfully deployed by the MI Chelverton UK Equity
Growth Fund, which has returned 222.05% since launch in October 2014 (Source:
Morningstar, NAV to NAV, B Shares Acc, Total Return to 28.02.2023).
It is intended that the Chelverton UK Equity Growth Team, comprising of James
Baker, Ed Booth and Henry Botting would be responsible for the management of
the Company's portfolio.
As part of the Proposals, certain employees of Chelverton intend to subscribe
for ordinary shares in the Company.
It is also intended that David Horner (founder and Managing Director of
Chelverton) will be appointed to the board of the Company (the "Board") as a
non-executive director. David has indicated to the Board that he intends to
waive his remuneration entitlement. Michael Weeks intends to step down from
the Board on completion of the Proposals. The other directors of the Company
are expected to remain as directors following completion of the Proposals.
The Board believes that the Proposals will provide shareholders with the
opportunity to either remain in a vehicle managed by an award-winning asset
manager with a strong track record of creating value for its investors, or to
receive a full cash alternative for those shareholders who wish to realise
their investment (through a process which is comparable in terms of cost, but
more timely, than a liquidation of the Company).
Should the Proposals become effective, the continuing directors of the Company
have expressed their intention to retain their full shareholdings in the
Company.
The Proposals are conditional, inter alia, on shareholder approval and further
announcements will be made as and when appropriate.
Ian Dighé, Chairman of The Investment Company, said:
"Having reviewed a number of potential opportunities and options available to
the Company, we are pleased to be putting these proposals to shareholders.
The directors believe that the proposals offer existing shareholders two
appropriate alternatives: either to retain their shareholding in the Company
whilst it pursues a growth mandate managed by a team with a proven track
record, or to have their capital returned to them. The continuing directors
look forward to retaining their shareholdings in the Company and working with
the Chelverton team."
David Horner, Managing Director of Chelverton, said:
"We are investors with a long history of, and expertise in, investment in UK
small- and mid-cap quoted companies who believe in the positive long-term
compounding effect of rising corporate cashflows on shareholder returns. It
feels to us that we are at a point in time where valuation levels in our
investable universe are extremely attractive as we believe that interest rates
are set to peak and economic growth is set to pick up."
Enquiries
The Investment Company plc +44 (0) 20 3934 6630
Ian Dighé, Chairman info@theinvestmentcompanyplc.co.uk (mailto:info@theinvestmentcompanyplc.co.uk)
Singer Capital Markets - Sponsor +44 (0)20 7496 3000
James Moat / Alex Bond / Alex Emslie
Chelverton Asset Management Limited +44 (0) 7222 8989
David Horner/ Al Rae
ISCA Administration Services Limited +44 (0) 1392 487056
Company Secretary
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