Circ re investment policy/subscription shares
Schroder UK Growth Fund plc
1 July 2013
Publication of a circular - amendment to investment policy and subscription share cancellation
Schroder UK Growth Fund plc (the "Company") has today published a circular (the "Circular") seeking shareholder approval for the amendment of the Company's investment policy, the redesignation as Deferred Shares of all the Outstanding Subscription Shares and the cancellation of such Deferred Shares immediately following the Redesignation and to update the Company's articles of association (together the "Proposals").
The reasons for the Proposals are: i) to adjust the Company's investment policy following the appointment of a new lead portfolio manager; ii) to enable the Company to continue to be in a position to be approved as a UK investment trust; and iii) to amend the Company's articles of association to reflect recent changes to the company law and tax regime in the UK applying to investment trust companies.
The Proposals require the approval of Ordinary Shareholders at the Company General Meeting and also, in the case of the Subscription Share Proposals, the approval of the Subscription Shareholders at the Class Meeting. Both General Meetings will be held on Tuesday, 30 July 2013 following the conclusion or adjournment of the 2013 AGM.
Investment Policy Proposals
On 15 March 2013 the Company announced that Richard Buxton and Errol Francis were to leave Schroders in June 2013. Following that announcement the Board reviewed the options for the future management of the Company's portfolio and after careful consideration agreed to Julie Dean assuming the role of the Company's lead portfolio manager. Julie will join Schroders in July 2013 as part of the Cazenove Capital Acquisition, which was approved by the shareholders of Cazenove Capital Holdings Limited on 17 May 2013.
Julie Dean is the Citywire AAA-rated manager of the Cazenove UK Opportunities Fund and the Cazenove UK Equity Fund. The Cazenove UK Opportunities Fund has been ranked in the top quartile of its UK Growth peer group over the past 5 years and has also outperformed its benchmark, the FTSE All-Share index, over the same period (source - Lipper: B Acc Class, mid to mid at 31 March 2013, net income reinvested).
The Company's investment objective, namely to achieve capital growth predominantly from investment in UK equities, with the aim of providing a total return in excess of the FTSE All-Share Index, will not be changed. However, the Board is proposing to amend the Company's investment policy so that the Manager is able to manage the Company in the style which Julie Dean applies to the Cazenove UK Opportunities Fund.
The key changes to the current investment policy are: an expansion to the investable universe allowing the Company to invest up to 5 per cent. of net assets at the time of investment in each of smaller capitalisation stocks and AIM stocks; a clarification that stocks are principally selected for their potential to provide attractive returns relative to the FTSE All Share index; and an increase in the number of stocks (although still remaining a relatively concentrated portfolio) in which the Company is able to invest.
It is expected that, subject to shareholder and other regulatory approvals, the Cazenove Capital Acquisition will become effective on or around 2 July 2013 and, from the effective date, Julie Dean will assume portfolio management responsibilities for the Company. Julie Dean will commence the transition of the Company's portfolio from that date, within the boundaries of the current investment policy, until the Investment Policy Proposals are approved by Shareholders at the Company General Meeting.
The Manager has agreed to reduce the management fee charged to the Company. With effect from 1 July 2013, this will be 0.60 per cent. (previously 0.65 per cent.) of the Company's net assets less current liabilities and, from that date, the Company will also no longer be charged a separate secretarial fee. The Manager has agreed to waive its management fee for a period of 6 months, commencing on 1 July 2013, as a contribution to portfolio transition costs.
Subscription Share Proposals
On 7 August 2009 the Company issued 31,374,859 Subscription Shares by way of a 1 for 5 bonus issue to its Ordinary Shareholders. The subscription rights attaching to the Subscription Shares lapsed out of the money on 31 July 2012 but the listing of the remaining 21,349,803 Subscription Shares has been maintained, albeit suspended, since 31 July 2012 so as to preserve the Company's eligibility for the UK investment trust status.
Notwithstanding that the Outstanding Subscription Shares have no purpose or meaningful rights, in order to preserve the Company's UK investment trust status, the Company has had to maintain the existing listing of the Outstanding Subscription Shares. However, if the Resolutions are passed at the General Meetings, the Outstanding Subscription Shares will be redesignated as Deferred Shares and, since there will no longer be any Outstanding Subscription Shares, it will be possible for the standard listing on the Official List of the Subscription Shares to be cancelled while preserving the Company's eligibility for UK investment trust status.
Cancellation of the listing of the Subscription Shares
Accordingly, in the event that the Proposals are approved at the General Meetings and the Outstanding Subscription Shares are redesignated as Deferred Shares, the Company has requested that the standard listing of the Subscription Shares be cancelled. It is expected that the cancellation of the listing will take place at 8.00 a.m. on Friday 9 August 2013.
Other changes to the Company's Articles
The Company is also seeking Shareholder approval for other amendments to the Articles to reflect recent changes to the company law and tax regime in the UK applying to investment companies.
Full details of the Proposals are set out in the Circular, a copy of which will shortly be available for inspection at the National Storage Mechanism which is located at http://www.morningstar.co.uk/uk/nsm and on the Company's website at http://schroderukgrowthfund.com. Terms used and not defined in this announcement shall have the meanings given to them in the Circular dated 1 July 2013.
Enquiries:
John Spedding, Schroder Investment Management Limited
020 7658 3206
Jane Lewis/Neil Morgan, Winterflood Investment Trusts
020 3100 0295/0292
This information is provided by RNS
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