REG-MIGO Opportunities Trust plc: Change of co-manager and new portfolio approach

Migo Opportunities TrustAnnouncement

18/06/2025 07:02

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

 

This announcement contains information that is inside information for the
purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as
amended (the "Market Abuse Regulation"). The person responsible for arranging
for the release of this announcement on behalf of MIGO Opportunities Trust plc
is Frostrow Capital LLP acting as corporate secretary.

 

18 June 2025

 

MIGO Opportunities Trust plc ("MIGO" or the "Company")

 

Change of co-manager and new portfolio approach

 

 

MIGO's board has been notified by Asset Value Investors Limited ("AVI"), its
AIFM and investment manager, that Nick Greenwood wishes to step back from his
role as MIGO's co-manager after over 20 years' involvement with the Company.

 

The board has agreed with AVI that, effective from 18 June 2025, Charlotte
Cuthbertson will be joined in co-managing MIGO by Tom Treanor, Director and
Fund Manager at AVI. Charlotte and Tom will continue to be supported by AVI's
wider 11-strong research team. Nick remains an AVI employee and will become a
consultant to the team.

 

 

More focused and activist approach

 

The board and AVI have concurrently decided to implement a higher conviction
approach to managing MIGO, to align with the current opportunities in the
investment trust sector. This will see MIGO's portfolio concentrating over
time to focus on 10-15 core holdings. MIGO currently has 40 holdings in total.
The board and AVI believe that larger stakes in a more targeted investment
company portfolio will enable more influential engagement with boards, aiming
to accelerate superior returns from the wide discount opportunities in the
sector. 

 

 

Performance-driven fee structure and capital return mechanism

 

To align MIGO shareholders' interests with this more targeted approach, the
board has agreed a revised fee structure with AVI1. This will reduce the
management fee to 0.35% per annum on the lower of MIGO's market capitalisation
and net asset value (NAV) (currently 0.65% per annum on market capitalisation)
and add a performance fee of 15% of NAV total returns in excess of a SONIA2 +
3% hurdle, subject to a high watermark. Overall fees payable by the Company in
any year will be capped at 2.5% per annum of the lower of MIGO's market
capitalisation and NAV3. The Company estimates that the overall fee payable to
AVI in any year will be lower under the new arrangement until NAV total return
exceeds approximately 9% per annum4.

 

The board is pleased to note that AVI proposed, as part of the revised fee
structure, to reinvest 25% of any performance fee paid into MIGO shares. This
proposal has been agreed by the board, subject to an aggregate 5% cap on AVI's
interest in MIGO shares, and a minimum 3-year hold period for shares acquired
under this mechanism.

 

To ensure that MIGO remains nimble and is best able to exploit the relevant
opportunity set, the board also expects to introduce a capital return
mechanism in the future to limit NAV rising above £150m. To be implemented at
the board's discretion to optimise shareholder alignment, this will also
potentially provide liquidity for shareholders. The board believes a capital
return mechanism, combined with the revised fee structure, will avoid a
misaligned incentive for AVI to gather assets rather than focus on delivering
shareholder returns.

 

These changes reinforce MIGO's commitment to leading investment company best
practice, by proactively aligning the portfolio to the investment opportunity,
and strengthening alignment between shareholders, manager and board. Portfolio
changes will be implemented over time to avoid sacrificing returns from
existing maturing investments, for example where a holding is in run-off. The
management team, however, expects that the bulk of these changes will be
completed within 12 months, subject to market conditions. The board also
reiterates its ongoing commitment to MIGO's existing share buyback approach,
dividend policy and 3-yearly realisation opportunity. 

 

 

Richard Davidson, MIGO's Chairman, commented:

"The current market conditions and a more focused portfolio are expected to
give MIGO a powerful lever to exploit dislocations more quickly. Fully
exploiting the opportunity set requires MIGO to stay nimble, so we propose to
cap NAV at £150m, returning excess capital to shareholders. The updated fee
structure incentivises performance versus asset-gathering. We expect these
changes to strengthen the delivery of higher and sustainable returns.

 

"Under Nick's leadership, MIGO has successfully navigated myriad sector
evolutions. While there will be a suitable future moment to formally mark the
occasion, and celebrate his 45 years in the industry, the board is incredibly
grateful to Nick for over two decades' service to MIGO as he hands over to
Charlotte and Tom.

 

"With Charlotte and Tom at the helm, and a more focused and activist approach,
we're confident that MIGO will remain at peak fitness to capitalise on the
substantial current opportunities in the sector."

 

 

Charlotte Cuthbertson, co-manager of MIGO, said:

"The UK investment companies' market is ripe with inefficiencies, with too
many funds, some subscale, in a diverse and complex range of asset classes.
Share prices can be impacted by selling from non-fundamental sellers and
corporate events can have substantial share price impacts, which are often
slow to be fully priced in.

 

"Exploiting inefficiencies takes expertise, detailed research and engagement,
particularly for the lower-profile, smaller investment companies which often
provide the best investment opportunities but require a more concentrated
approach.  I'm excited to be working with Tom to deliver this updated
approach to MIGO."

 

 

Tom Treanor, co-manager of MIGO and AVI Head of Research, said:

"Delivering returns in these conditions, with double digit discounts prevalent
across the sector, takes thorough analysis, a deep understanding of what
causes discounts and what steps are needed to remove them. It also takes a
degree of impatience to identify and exploit catalysts while they last.

 

"Effective activism involves dealing with boards, managing relationships with
other shareholders, knowledge of the legal framework, as well as having a
talent pool of directors to call upon when boards need improving. Already
specialising in investment companies across AVI, particularly in activist
engagement, and knowing MIGO's portfolio well, I look forward to working with
Charlotte to put our combined experience and skill sets at the heart of MIGO's
investment process."

 

 

Nick Greenwood added:

"Having worked closely with Charlotte for eight years and with Tom for the
past two, I know MIGO is in excellent hands as I hand over full portfolio
responsibility to them. Charlotte and Tom are well known in the sector, and to
many of our investors, as tough but fair champions of shareholder value. As a
longstanding MIGO shareholder, I look forward to seeing the returns from their
hard work."

 

 

Investor Webinar, video and slides

Charlotte and Tom will host a Zoom webinar for investors at 11am on Monday 23
June to run through the new approach. To access the webinar, please use the
following link:  https://us02web.zoom.us/j/88492789088.

 

The webinar audio can also be accessed by dialling +44 (0)330 088 5830 and
webinar ID: 884 9278 9088.

 

A further explanatory video from the team is on the MIGO website,
www.MIGOplc.co.uk.  Presentation slides outlining the changes are also
available via the same link.

 

 

ENDS

 

For further information, please contact:

 

 MIGO Opportunities Trust plc                                                                 
 Richard Davidson, Chairman                        Via KL Communications or Deutsche Numis    
                                                                                              
 Deutsche Numis - Corporate Broker                                                            
 Nathan Brown Matt Goss                            +44 (0)20 7547 0569 +44 (0)20 7547 0541    
                                                                                              
 KL Communications - Financial PR                  MIGO@kl-communications.com                 
 Charles Gorman Adam Westall Amy Levingston Smith  +44 (0)20 3882 6644 / +44 (0)7795 977 967  
 Frostrow Capital - Company Secretary                                                         
 Richard Plaskett Kerstin Rucht                    +44 (0)20 3709 2407 +44 (0)20 3709 8732    

 

 

Notes to Editors

 

About MIGO

MIGO's updated objective is to outperform SONIA2 plus 3% (the "Benchmark")
over the longer term, principally through exploiting inefficiencies in the
pricing of closed-end funds. This objective is intended to reflect the
Company's aim of providing a better return to shareholders over the longer
term than they would get by placing money on deposit. The Benchmark is a
target only and should not be treated as a guarantee of the performance of the
Company or its portfolio.

 

MIGO was launched on 6 April 2004, with Nick Greenwood as its lead investment
manager. MIGO's net asset value is currently £82m. Since December 2023, MIGO
has been managed by AVI. Further information on MIGO can be found
at: https://www.migoplc.co.uk/

 

About Asset Value Investors (AVI)

AVI is an investment management company established in London, United Kingdom,
in 1985. AVI manages AVI Global Trust (£1.3bn), and AVI Japan Opportunity
Trust (£267m), both public companies whose shares are listed and traded on
the main market of the London Stock Exchange.

Website: https://www.assetvalueinvestors.com/

LinkedIn: https://www.linkedin.com/company/asset-value-investors-limited/about/

 

 

Biographies

 

Charlotte Cuthbertson joined AVI in July 2023 as a Fund Manager and has been
co-manager of MIGO Opportunities Trust since it transitioned to AVI in late
2023. Charlotte has 10 years' experience in the finance industry, with the
last 7 years specialising in investment trusts.  Prior to AVI she worked at
Tyndall Investment Management and Premier Miton plc, where she assisted Nick
Greenwood in managing MIGO.  Charlotte holds a BA in Modern History from St
Anne's College, Oxford.

 

Tom Treanor joined AVI in February 2011 and was appointed to the board of
Asset Value Investors in September 2017. He is a Portfolio Manager and Head of
Research, working closely with the analyst team providing support and guidance
on prospective and current investments across the portfolio. Tom has
specialised in closed-end funds over the past 20 years, particularly in
activist engagement. He spent nine years working for Fundamental
Data/Morningstar in various roles involving closed-end fund analysis. He has a
degree in Economics from the University of Leicester and is a CFA
charterholder.

 

Nick Greenwood joined Asset Value Investors from Premier Miton in December
2023. He began his career in private client stockbroking and was a founder
member of Christows' stockbroking operation in 1991. He joined Christows'
Investment Trust team, setting up their London office in 1995 and became lead
manager in November 1997. Nick subsequently joined Premier Miton.  Nick has
managed MIGO Opportunities Trust since its Initial Public Offering in April
2004.

 

 

Notes

 

1) Under the UK Listing Rules, AVI is a related party of MIGO and the changes
to the investment management agreement constitute a relevant related party
transaction under Listing Rule 11.5.4(1). The board of MIGO considers the
proposed changes to the investment management agreement to be fair and
reasonable as far as the MIGO shareholders are concerned and the MIGO
directors have been so advised by Deutsche Numis acting in a sponsor capacity.

 

2) SONIA is the Sterling Overnight Index Average, the Sterling Risk-Free
Reference Rate preferred by the Bank of England for use in Sterling
derivatives and relevant financial contracts.

 

3) Any performance fees earned that exceed the 2.5% annual cap will be carried
forward for up to three years. During that period, AVI would only receive the
deferred amount if a performance fee is earned in a subsequent year and
subject to the total fee for that year remaining below the cap.

 

4) Based on SONIA at current levels.

 

5) Numis Securities Limited ("Deutsche Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
exclusively for MIGO and no one else in connection with the matters referred
to in this announcement. In connection with such matters, Deutsche Numis will
not regard any other person as its client, nor will it be responsible to any
person other than MIGO for providing the protections afforded to clients of
Deutsche Numis or for providing advice in relation to the contents of this
announcement or any other matter referred to herein. Neither Deutsche Numis
nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct, indirect, consequential, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Deutsche Numis in connection with the matters referred to in this
announcement, any statement contained herein or otherwise.

 

This document does not constitute an offer to sell or a solicitation of an
offer to buy or subscribe for any securities and neither is it intended to be
an investment advertisement or sales instrument of AVI. The distribution of
this document may be restricted by law in certain jurisdictions. Persons into
whose possession this document comes must inform themselves about and observe
any such restrictions on the distribution of this document. In particular,
this document and the information contained therein is not for distribution or
publication, neither directly nor indirectly, in or into the United States of
America, Canada, Australia or Japan.



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