Trust Archives - Majedie

The Edinburgh Investment Trust plc – Dividend Announcement 27 October 2021

The Directors of The Edinburgh Investment Trust plc (the “Company”) announce that they have declared a first interim dividend for the year ended 31 March 2022 of 6.00 pence per ordinary share (2021: 6.00p).  The dividend is payable on 26 November 2021 to Ordinary Shareholders on the register on 5 November 2021.  The shares will be quoted ex-dividend on 4 November 2021. 

The Company’s proposed dividend schedule for the current financial year may be viewed at the Company’s website: edinburghinvestmenttrust.com

PraxisIFM Fund Services (UK) Limited

Company Secretary

27 October 2021

The Edinburgh Investment Trust plc – Issue of £120 million of unsecured Notes

The Board of the Company announces that it has agreed to issue £120m of long-term, fixed rate, senior, unsecured privately placed notes (“the Notes”) as follows:
• £35m 2.26% Notes maturing in 2037 settling on 29 September 2022
• £35m 2.49% Notes maturing in 2047 settling on 29 September 2022
• £20m 2.53% Notes maturing in 2051 settling on 7 October 2021
• £30m 2.53% Notes maturing in 2057 settling on 29 September 2022

Three tranches, totalling £100m, will settle on 29th September 2022. The proceeds of these Notes will be used to repay the Company’s £100m 7.75% debenture, which matures in exactly a year’s time on 30 September 2022. A fourth tranche of £20m is new debt and will settle on 7 October 2021. The weighted average cost of the Notes from 1 October 2022 will be 2.44%. The Company also has a £25m bank revolving credit facility which is currently undrawn.

There is no change to the Company’s gearing policy. The Company is committed to the strategic use of borrowings with the aim of enhancing long-term returns to shareholders over time. The level of net gearing* on 31 August 2021 was 8.2% of net assets.

Glen Suarez, Chairman of The Edinburgh Investment Trust, said:
“We are delighted to have arranged attractively priced long-term debt to replace the existing debenture next year and to expand the amount of long-term debt available. A key differentiating feature of investment trusts is their ability to borrow to enhance long-term shareholder returns. This new debt, at a much lower cost than that of the debenture, will help us achieve this goal.”

James de Uphaugh, portfolio manager of the Company, commented:
“The additional £20m of debt comes at an opportune time when we have several strong investment ideas competing for positions in the portfolio. We expect to put this capital to work progressively in the months ahead.”

Centrus Financial Advisors Limited acted as the arranger of the issue of the Notes.

*Net gearing is defined as the amount of net borrowings invested, i.e. borrowings less cash and cash equivalents (including investments in money market funds).

PraxisIFM Fund Services (UK) Limited

Company Secretary

30 September 2021

The Edinburgh Investment Trust plc – AGM: joining instructions

The Annual General Meeting (“AGM”) of The Edinburgh Investment Trust plc (the “Company”) is to be held on 22 July 2021 at 11am as previously announced.

As stated in its Annual Report on 27 May 2021 the Company has planned for the AGM to take place in person.   The Company’s highest priority is the wellbeing of its shareholders and therefore, given the status of the COVID-19 pandemic and in order to comply with the requirements of the Scottish Government on public gatherings, the number of shareholders able to attend in person will be restricted.   Although we will do everything we can to accommodate shareholders who attend, if the number exceeds the limitations of the venue it is possible that some shareholders may be denied entry to the AGM.

Shareholders will also be able to attend the AGM virtually via a live webcast and to submit questions to the directors in writing during the meeting.  The AGM will also include a presentation from the Investment Manager.  To join the AGM virtually, shareholders will need to visit the Company’s website www.edinburghinvestmenttrust.com and click on the link titled “AGM on-line access – 22 July 2021”. Shareholders will not be required to provide an Investor Code as previously announced.  This change will allow those who do not have an Investor Code, such as shareholders through investor platforms or through a nominee company, to attend the AGM virtually and submit questions to the Directors and Manager in writing during the meeting.

In addition, questions can be submitted by shareholders in advance of the meeting if they are sent to the Company’s email address edinburghinvestmenttrust@majedie.com by 11.00am on 19 July 2021.  The Company will collate the questions received and a representative sample will be answered on the Company’s website shortly after the meeting. The Company will also provide answers directly to the shareholders who asked the questions.

Voting

Shareholders will not be able to vote during the AGM and are therefore requested to vote by proxy and are recommended to appoint the “Chairman of the Meeting” as their proxy rather than another person who may not be permitted to attend the meeting.  Details of how to vote, either electronically, by proxy form or through CREST, can be found in the Notes to the Notice of AGM contained in the Annual Report.

The outcome of all resolutions will be determined by shareholder vote based on the proxy votes received and all valid proxy appointments (whether submitted electronically or in hard copy form) will be included. The results of the AGM will be announced to the London Stock Exchange and placed on the Company’s website, as soon as practicable after the conclusion of the AGM.

 

For further information please contact:

Jenny Thompson/Brian Smith

PraxisIFM Fund Services (UK) Limited
Company Secretary
020 7653 9690

 

15 July 2021

The Edinburgh Investment Trust plc – Declaration of Third Interim Dividend

The Directors of The Edinburgh Investment Trust plc (the “Company”) announce that they have declared a third interim dividend for the year ended 31 March 2021 of 6.00 pence per ordinary share (2020: 6.40p).  The dividend is payable on 28 May 2021 to Ordinary Shareholders on the register on 7 May 2021.  The shares will be quoted ex-dividend on 6 May 2021.

The first interim dividend of 6.00 pence per share was paid on 27 November 2020 to shareholders on the Company’s register on 13 November 2020 (ex-dividend date being 12 November 2020).  The second interim dividend of 6.00 pence per ordinary share was paid on 26 February 2021 to shareholders on the Company’s register on 5 February 2021 (ex-dividend date being 4 February 2021.)

As announced to shareholders on 3 November 2020, the Directors expect to declare total dividends, comprising four ordinaries and a special, for the year ended 31 March 2021 of 28.65 pence per share (2020: 28.65p).

The Company’s proposed dividend schedule for the current financial year may be viewed at the Company’s website: edinburghinvestmenttrust.com

PraxisIFM Fund Services (UK) Limited

Company Secretary

28 April 2021

Appointment of New Director

The Board of The Edinburgh Investment Trust plc (the ‘Company’) is pleased to announce the appointment of Patrick Edwardson as an independent Non-Executive Director of the Company with immediate effect.

Patrick has 27 years of investment experience as a fund manager with Baillie Gifford, where he was a Partner and Head of the Multi-Asset Team before his recent retirement.  Mr Edwardson is also a Non-Executive Director of JP Morgan Multi-Asset Trust plc.

Glen Suarez, Chairman of the Company, said: “On behalf of all the Directors, we are delighted that Patrick has agreed to join the Board; we welcome him and very much look forward to working with him. Along with his knowledge of the UK equity market and deep knowledge of investment companies, Patrick brings extensive experience of income investing from his role as the Fund Manager of the Scottish American Investment Company from 2004 to 2014. I have no doubt that he will rapidly become an extremely valuable member of the Board.”

As is the case with all Directors of the Company, shareholders will have the opportunity to vote on Patrick’s continuing directorship at the AGM in July this year. It should be noted two long serving directors, Max Ward and Gordon McQueen, will not be seeking re-election at the AGM as they will be retiring.

11 February 2021

The Edinburgh Investment Trust plc – Declaration of Second Interim Dividend

The Directors of The Edinburgh Investment Trust plc (the “Company”) announce that they have declared a second interim dividend for the year ending 31 March 2021 of 6.00 pence per ordinary share (2020: 6.40p).  The dividend is payable on 26 February 2021 to Ordinary Shareholders on the register on 5 February 2021.  The shares will be quoted ex-dividend on 4 February 2021.

The first interim dividend of 6.00 pence per share was paid on 27 November 2020 to shareholders on the Company’s register on 13 November 2020 (ex-dividend date being 12 November 2020).

PraxisIFM Fund Services (UK) Limited

Company Secretary

28 January 2021

The Edinburgh Investment Trust plc – Dividend Announcement 3 November 2020

The Directors of The Edinburgh Investment Trust plc (“the Company”) announce that they have declared a first interim dividend for the year ending 31 March 2021 of 6.00 pence per share (2020: 6.40p). They also announce that they intend to declare total dividends, comprising four ordinaries and a special, for the year ending 31 March 2021 of 28.65 pence per share (2020: 28.65p).

The first interim dividend will be paid on 27 November 2020 to shareholders on the register on 13 November 2020. The shares will be quoted ex-dividend on 12 November 2020. The Directors expect to declare two further interim dividends of 6.00 pence per share, a final dividend of 6.00 pence per share and a special dividend (paid at the same time as the final dividend) of 4.65 pence per share. These dividends will, as usual, be paid in November, February, May and July.

The Board of the Company recognises the importance of dividends to shareholders, especially in an uncertain environment and at a time when other sources of income are under pressure. The Company is in a strong position to support dividend distributions to shareholders by using the significant revenue reserves built up over many years. The Board believes that maintaining the total dividend per share at the 2019/20 level with revenue reserves for this financial year is the appropriate approach.

The Board also recognises the importance of sustainable dividends. Even before the current economic crisis, the overall yield on the UK market had become increasingly dependent on a small number of companies and sectors. The effect of the crisis caused by the Covid-19 pandemic, and ongoing structural changes to the economy, has been to further erode the income available from the UK equity market. While there remain elevated levels of uncertainty over the speed at which market earnings and dividends will recover, the Board has concluded that the previous level of Company dividends is unlikely to be sustainable. The Board has therefore resolved to re-set annual dividends to 24.00 pence per share, a level from which we believe they can grow progressively in future years.

Glen Suarez, Chairman of the Company, commented:

“The Board recognises the importance that investors place on a sustainable source of income. While we are keeping the dividend unchanged in total for the current financial year, we are also re-setting the dividend for future years to a level that is more sustainable and offers the potential for future dividend progression. Our investment strategy seeks both capital growth and income and our manager’s total return approach is well placed to navigate the current market environment.”

Dividend timetable for financial year to 31 March 2021

Pence per share Declaration date Ex-dividend date Record date Payment date
First interim dividend 6.00 3 Nov 2020 12 Nov 2020 13 Nov 2020 27 Nov 2020
Second interim dividend 6.00 Jan 2021 Feb 2021 Feb 2021 Feb 2021
Third interim dividend 6.00 April 2021 May 2021 May 2021 May 2021
Final dividend 6.00 June 2021 July 2021 July 2021 July 2021
Special dividend 4.65 June 2021 July 2021 July 2021 July 2021

The Edinburgh Investment Trust plc – Declaration of Third Interim Dividend

The Directors of The Edinburgh Investment Trust plc announce that they have declared a third interim dividend for the year ending 31 March 2020 of 6.40 pence per ordinary share (2019: 6.25p), payable on 29 May 2020 to Ordinary Shareholders on the register on 11 May 2020. The shares will be quoted ex-dividend on 7 May 2020.

The first interim dividend of 6.40 pence per share was paid on 29 November 2019 to shareholders on the Company’s register on 15 November 2019 (ex-dividend date being

14 November 2019). The second interim dividend of 6.40 pence per ordinary share was paid on 28 February 2020 to shareholders on the Company’s register on 7 February 2020 (ex-dividend date being 6 February 2019).

PraxisIFM Fund Services UK Limited

Company Secretary

29 April 2020

The Edinburgh Investment Trust plc – Portfolio Update

Since assuming management of the Company’s portfolio on 4 March 2020, we have repositioned its holdings into a portfolio of UK and overseas listed companies. James de Uphaugh is the Company’s portfolio manager and his colleague Chris Field is the deputy. In keeping with the Company’s requirements, at least 80% of the portfolio by value is in UK equities.

Despite the extremely volatile market conditions since 4 March the reorganisation process has largely concluded, with 98% of intended trading complete. The desired portfolio of shares is thus in place, bar a small rump of legacy positions. We worked closely with the transition manager over the period to ensure that if our views of individual investments changed, these were incorporated into the transition manager’s trading. Net of all costs, the portfolio performed in-line with the index over the period of the reorganisation (6 March to 25 March inclusive).

As the Company’s Chairman described when announcing our appointment in late 2019, at Majedie we take a flexible, total-return approach to investing. We believe investment flexibility – our approach of identifying and buying different types of shares according to the economic and stock market cycle – is well suited to highly uncertain market conditions. From December 2006 to February 2020, James’ portfolio outperformed the FTSE All-Share index net of fees by 2.8% per annum.[1] In the notes at the end of this statement is a description of the investment process underpinning our management of the Company’s portfolio and the types of company in which we seek to invest.

Since the start of the reorganisation, unprecedented measures have been put in place across societies to address the COVID-19 pandemic and its very real healthcare consequences. These vital measures to protect the health and welfare of society are also having a significant economic impact. The financial wellbeing of many members of the global workforce and their families are directly affected. Attempts to address the economic impact are underway through monetary and fiscal stimulus on a scale that would have been unthinkable only two weeks ago. For all these reasons, we do not propose to indulge in a lengthy introduction to the new portfolio and its features. Shareholders and other interested parties will have more pressing concerns. The rest of this statement is therefore deliberately brief; the portfolio is set out in full at the end. Before that is a description of the current shape of the portfolio and our thoughts on the Company’s borrowings.

Current Portfolio
We have set out the portfolio by stock and major sector positions: these tables are at the end of this statement. The COVID-19 virus has imposed a hard stop on chunks of the UK and the developed world economies and we are in a period of extreme uncertainty that exposes weak links and interconnectedness. Companies have pulled all levers to conserve cash and increase liquidity. This includes passing dividends in many instances. Employment levels have mostly been maintained as government support schemes have in many countries been substantial. Against this backdrop we have constructed a diversified portfolio of shares, with a focus on companies with strong market positions. Many of the larger positions are holdings that we judge to be leaders in their fields. Examples include Tesco, Smith & Nephew, Hays and Marshalls: they and other holdings should emerge from this crisis in even stronger shape. Despite the massive monetary and fiscal stimulus, weaker companies are likely to close or be taken over at depressed prices. In short, the competitive landscape will tighten yet further: this will be corporate Darwinism on steroids. Our focus on strong and sustainable business models will be even more important than before the crisis.

Table 3 illustrates that amongst the largest sectoral positions we have are: the food retailers – selling essentials; telecoms – where the change in working habits brings home the consumer surplus and trading up to packages with higher speeds is likely; and defence – these are companies with long duration earnings. We have also modestly used our ability to buy non-UK listed stocks by investing in selected US-listed gold stocks as fiscal stimulus gets into full swing.

Given the highly uncertain outlook for dividends across the corporate sector, we will update shareholders on our thoughts on the Company’s dividend income outlook with the full year results in May 2020.

Following the payment of this financial year’s third interim and final dividends, payable in May and July 2020, the Board will review the Company’s dividend for the following year.

Overall, in these unprecedented times, we have worked hard to balance the portfolio across robust, well run businesses with strong management teams that we believe are well placed to ride out this volatility. We remain alert to the evolution of the market and will act swiftly to take advantage of attractive pricing opportunities or rebalance the portfolio as the situation dictates.

Borrowings
Historically, one of the advantages of an investment trust is the ability to borrow funds to boost long term investment returns. This relies on investment returns exceeding the cost of the borrowed funds (borrowings plus falling investment values boosts losses too). Despite the current uncertainty, we believe that borrowing against the assets of the Company (“gearing”) remains attractive strategically, and potentially tactically too after the recent market sell-off. The opportunity to invest in a number of shares with sustainable business models at highly attractive valuations may be a sound reason to deploy additional gearing in time.

The Company has in place a £100m debenture which matures in 2022. It carries an annual coupon of 7.75%. When this debenture matures in 2022, we anticipate looking to replace it with a similar instrument with a lower annual coupon.

In the meantime, shareholders should expect the portfolio to be largely fully invested and, through the debenture, to have inbuilt gearing. Current gearing (defined as the market value of the debenture divided by the Company’s Net Asset Value) is 13.2%. The level of gearing net of cash (or cash equivalent) is 5.7%.

We are also able to access a 364-day revolving credit facility at the Bank of New York Mellon. This facility is not currently being used but we stand ready to draw down on it.

Closing statements
From the end of this month onwards, we will revert to the Company’s usual practice of publishing the full portfolio at each month end, lagged by two months. A factsheet will be published monthly to the Company’s website: edinburghinvestmenttrust.com.

A statement to accompany the Company’s financial year end results will follow in May. We intend to use that statement to provide greater clarity on the outlook for the portfolio.

Our team of investors continues to focus on the rapidly evolving investment landscape and specific investment opportunities. Our workforce is at full strength and we are all working from home in a fully connected and compliant environment. This is a well-rehearsed procedure and is operating smoothly.

Lastly, at Majedie we have deliberately structured our own business to enable us concentrate on delivering long-term outperformance for clients. We are an independent standalone business, well financed with capital reserves many multiples of the regulatory minimum. We have a single focus on active equities. All staff are shareholders in our business: succeeding for clients matters across the organisation. In these highly uncertain times, we trust this stability and focus on Edinburgh Investment Trust’s portfolio will enable us to protect and grow the long-term value of the Company.

We look forward to speaking (if, alas, not meeting) with shareholders in the weeks ahead.

Majedie Asset Management Limited
27 March 2020

NOTES FOR EDITORS

Majedie investment process
As active managers, we believe that markets are inefficient and that equity values, ultimately, follow fundamentals. Where we believe we have an edge is in having a flexible yet repeatable investment approach to identifying these opportunities. Our combination of experience (James de Uphaugh has investment experience dating back to 1988), teamwork (James and Chris are supported by a larger team of investors and analysts, with a global perspective, operating a ‘one investment team’ ethos) and our proven investment process enables us to rigorously assess and identify undervalued opportunities, regardless of market and economic backdrop. We therefore expect our actively managed portfolios to generate sustainable outperformance for the Company over the long term, after fees.

We are primarily stock pickers. Around three quarters of our investment work is typically geared to company specific research. The balance is spent considering the political, economic and equity market backdrop; a higher proportion in times of macroeconomic dislocation, such as now. Our research is deep and fundamental, targeting shares with favourable risk/reward profiles. We take a global perspective. Major aspects of a company’s Environmental, Social and Governance profile are assessed as part of our work. Our flexible investment approach means we are not bound by a rigid or dogmatic style bias. We are open to holding shares with both ‘growth’ and ‘value’ characteristics, as well as those that we identify as having scope for recovery through management change, business transformation or an improving business environment. Clearly, an important dimension to our work in the months ahead will be identifying those companies with sufficiently robust business models, balance sheet and liquidity profiles to weather the current social and economic storm. We see a role in Edinburgh Investment Trust for both shares with attractive long-term earnings growth profiles, as well as businesses that may be out of favour but with the potential to recover. We also aim to hold businesses at attractive valuations. By blending together companies with these features, the overall portfolio should deliver attractive relative returns. In short, outperformance is expected to be driven by a long-term combination of corporate results exceeding medium term expectations, and revaluation.

Risk management is carefully integrated in our investment process. Never has it been more important than now. The downside is considered for each position: protecting the Company’s capital over the long term is critical. Thus those shares in which we consider the downside to be more limited typically represent larger positions in the portfolio. In addition, an Investment Oversight Committee, chaired by our CEO, governs a separate risk oversight process which provides further challenge of individual stock selection as well as macroeconomic and market risks.

 

Enquiries

Edinburgh Investment Trust plc
Glen Suarez (Chairman)                                 via Tulchan below
Investec Bank plc
Tom Skinner                                                       + 44 20 7597 4000
Majedie Asset Management Limited     
James Mowat                                                    + 44 20 7618 3900
Harry Steel
Tulchan Group (Financial PR)
Simon Pilkington                                              + 44 20 7353 4200
Lisa Jarrett-Kerr                                                EIT@tulchangroup.com
Marta Parry-Jones

Table 1: Portfolio at 25 March 2020 (weightings expressed as a percentage of gross assets)

Royal Dutch Shell 5.2
Unilever 5.2
Tesco 4.9
AstraZeneca 4.5
BAE Systems 4.1
BP 4.0
GlaxoSmithKline 3.9
Mondi 3.5
Anglo American 3.4
Smith & Nephew 3.4
Legal & General 3.3
Direct Line Insurance 3.1
Associated British Foods 2.8
Hays 2.5
Ashtead 2.4
HSBC 2.3
Vodafone 2.2
Royal Bank of Scotland 2.1
Newmont 1.9
Barrick Gold 1.9
Orange 1.9
Hargreaves Lansdown 1.8
Rio Tinto 1.8
Lloyds Banking Group 1.8
Royal KPN 1.8
Barclays 1.6
Electrocomponents 1.4
QinetiQ 1.4
3i 1.4
WPP 1.3
Diageo 1.2
Sage 1.2
Wm Morrison Supermarkets 1.2
Daily Mail & General Trust 1.2
Weir 1.1
Marshalls 1.1
Dunelm Group 1.1
Travis Perkins 1.1
CLS* 0.8
Marks and Spencer 0.8
Bellway 0.6
Raven Property 12% Cum Red Pref* 0.2
Vectura* 0.1
Eurovestech* 0.0
Cash 5.0
Total 100.0

*Legacy holdings.

 

Table 2: Top ten and bottom ten positions relative to the index weight

Tesco +3.7
Mondi +3.2
BAE Systems +3.1
Direct Line Insurance +2.9
Unilever +2.7
Legal & General +2.7
Smith & Nephew +2.7
Anglo American +2.5
Associated British Foods +2.4
Hays +2.4
Royal Dutch Shell -1.2
London Stock Exchange -1.3
Prudential -1.5
BHP Group -1.6
National Grid -1.8
RELX -1.8
Diageo -2.1
Reckitt Benckiser -2.1
British American Tobacco -3.4
HSBC -3.6

Table 3: Top ten and bottom ten sector positions relative to the index weight

Food & Drug Retailers +4.1
Aerospace & Defence +3.7
Forestry & Paper +3.2
Fixed Line Telecommunications +2.9
Mining +2.6
Support Services +2.6
Personal Goods +2.4
Health Care Equipment & Services +2.3
Food Producers +2.1
Nonlife Insurance +2.0
Media -1.2
Pharmaceuticals & Biotechnology -1.3
Banks -1.8
Beverages -2.4
Real Estate Investment Trusts -2.5
Gas, Water & Multiutilities -2.8
Household Goods & Home Construction -3.0
Travel & Leisure -3.3
Tobacco -4.1
Equity Investment Instruments -5.8

 

[1] Source: Majedie/FactSet. Data from James’ sub-portfolio within the Majedie UK Equity strategy; to 29 February 2020, GBP, total return (with gross dividends reinvested). Since this return series is only available on a gross basis, a deduction has been made on an annual basis to provide an estimation for costs and charges using the proposed management fee rate, transaction costs and actual OEIC expenses. Past performance is not necessarily a guide to future performance.

 

The Edinburgh Investment Trust plc – Appointment of Investment Manager and Company Secretary

The Board of The Edinburgh Investment Trust plc (the “Company”) is pleased to announce that it has entered into an investment management agreement with Majedie Asset Management Limited (“Majedie”), the Company’s new Alternative Investment Fund Manager (“AIFM”), effective as of today, Wednesday 4 March 20201.  The investment management agreement reflects the heads of terms announced on 11 December 2019.

The Board is also pleased to announce that it has appointed PraxisIFM Fund Services (UK) Limited (“PraxisIFM“) as the Company’s new Company Secretary, following a competitive process.  This appointment has also become effective as of today, Wednesday 4 March 2020.

Invesco Fund Managers Limited’s appointment as the Company’s AIFM and Company Secretary has therefore terminated.  There will be no other changes to the Company’s service providers nor its gearing facilities.2

A further update on the Company’s portfolio following its transition is expected to be published before the end of March.

James de Uphaugh, the Company’s portfolio manager, commented: “Majedie’s investment process is founded on rigorous, bottom-up, fundamental research.  We are confident that this approach is well suited to the next phase of the market cycle, particularly given the significant valuation opportunities available in UK equities.  We are excited to take on the Edinburgh mandate and look forward to engaging further with shareholders as we implement our strategy.”

Glen Suarez, Chairman of the Company, commented: “We are delighted that Majedie has now taken over the portfolio.  We believe James has the skills and experience, coupled with the right total returns approach, to capitalise on the great opportunities currently available in the market.  Majedie’s flexible investment approach and team culture, which clearly distinguished its offer during the selection process, should enable it to meet our objectives of capital appreciation and dividend growth over the long term.”

The Company wishes to again place on record its appreciation for the service provided by Invesco as AIFM and Company Secretary since 2008.

Enquiries

The Edinburgh Investment Trust plc
Glen Suarez (Chairman)                 via Tulchan below

Investec Bank plc
Tom Skinner                                       +44 20 7597 4000

Tulchan Group (Financial PR)
Simon Pilkington                              +44 207 353 4200
Lisa Jarrett-Kerr                             EIT@tulchangroup.com
Marta Parry-Jones

 1 As required under the UK’s AIFM rules, Majedie will notify the FCA promptly following its appointment as the Company’s AIFM and has submitted its application to the FCA to vary its permission from being a small authorised AIFM to a full-scope AIFM.

2 The Company’s website address remains edinburghinvestmenttrust.com.

Notes to editors

PraxisIFM
PraxisIFM Fund Services (UK) Limited forms part of PraxisIFM Group Limited (“PraxisIFM”), an independently owned financial services group which listed on The International Stock Exchange on 12 April 2017.  PraxisIFM currently employs over 550 staff across its office network providing a range of bespoke services to funds and management companies.  For further information please visit the website: https://www.praxisifm.com/

Past performance is not necessarily a guide to future performance. Since 31 December 2006, at inception of sub-portfolio total returns measurement. Source: Majedie/FactSet. Data from James’ sub-portfolio within the Majedie UK Equity strategy; to 29 February 2020, GBP, total return (with gross dividends reinvested). Since this return series is only available on a gross basis, a deduction has been made on an annual basis to provide an estimation for costs and charges using the proposed management fee rate, transaction costs and actual OEIC expenses.

The Edinburgh Investment Trust plc – Declaration of Second Interim Dividend

The Directors of The Edinburgh Investment Trust plc announce that they have declared a second interim dividend for the year ending 31 March 2020, of 6.40 pence per ordinary share (2019: 6.25p). The dividend is payable on 28 February 2020 to Ordinary Shareholders on the register on 7 February 2020. The shares will be quoted ex-dividend on 6 February 2020.

The first interim dividend of 6.40 pence per share was paid on 29 November 2019 to shareholders on the Company’s register on 15 November 2019 (ex-dividend date being 14 November 2019).

Kelly Nice

for and on behalf of

Invesco Asset Management Limited

Corporate Company Secretary

27 January 2020

Edinburgh Investment Trust plc

Majedie Asset Management today announces that it has entered into heads of terms with the Board of the Edinburgh Investment Trust plc, to appoint Majedie as the Company’s new Investment Manager.

The Company’s stock market announcement on 11 December is set out below. Also set out below is performance data from James de Uphaugh’s sub-portfolio within the Majedie UK Equity strategy; to 30 November 2019.

Edinburgh Investment Trust plc

Change of Investment Manager

The Board of The Edinburgh Investment Trust plc (the “Company”) is pleased to announce that, after an extensive review of the Company’s investment management arrangements, it has entered into heads of terms to appoint Majedie Asset Management (“Majedie”) as the Company’s new AIFM.

Glen Suarez, Chairman, The Edinburgh Investment Trust plc, commented:

“I am disappointed by another weak result for the Company in today’s Interim Results, extending the period of underperformance to beyond three years. Since 2018 your Board has worked hard to understand the causes of this underperformance, cognisant of the long-term investment objective of this Company and the recent trends in the UK equity market. Following a detailed assessment, thorough review and selection process, the Board has decided to change the Company’s Investment Manager and I am pleased to report that we have chosen Majedie. James de Uphaugh will be the Portfolio Manager and he is a highly experienced active manager with a flexible investment approach. The Board believes that James has the right approach to meet our Company’s objectives of capital appreciation and dividend growth over the long-term.

I wish to take the opportunity to thank Invesco, and Mark Barnett in particular, for their services to the Company and to wish them well for the future.”
James de Uphaugh, CIO of Majedie Asset Management, commented: “Majedie’s long-term, flexible investment approach, incorporating a commitment to Responsible Capitalism backed by fundamental analysis, is well suited to an investment trust that seeks total returns from both income and capital growth. The team here looks forward to working with the Board to build the value of the Company in the years ahead.”

Information on the new Investment Manager

Majedie is an independent equity investment management firm with proven expertise in UK equities.

The Company’s portfolio will be managed by James de Uphaugh supported by Chris Field as the deputy manager. Adopting a total return approach and based on fundamental company research, the managers will build a high conviction portfolio of c.40 positions which they believe will deliver the Company’s twin objectives1 of NAV growth and dividend growth over the long term.

 

The Board believes that as the Company’s Investment Manager, Majedie will provide the following benefits to the Company’s shareholders:

  • UK equity expertise: James de Uphaugh, CIO of Majedie, is responsible for co-managing both the Majedie UK Equity and Majedie UK Focus strategies; combined assets in these strategies amounted to approximately £8.5 billion as at 30 September 2019. James directly manages £3 billion of these assets.
  • Total return strategy: Majedie takes a total return approach, where income is one important component rather than the primary driver of investment return, and therefore aligns with the Company’s twin objectives.
  • Long-term track record: James has successfully co-managed Majedie’s UK Equity strategy from launch. Majedie has recorded sub-portfolio total returns from 31 December 2006, since when James’ sub-portfolio has outperformed the FTSE All-Share Index by 3.0% net per annum2. The Company’s portfolio will be closely aligned with this sub-portfolio, which has not previously been directly available to retail investors.
  • Deep investment resource: James leads a highly experienced investment team of twenty fund managers and analysts, with a collegiate culture. All Majedie employees own equity in the business, encouraging both challenge and collaboration.
  • Disciplined investment and oversight processes: The Majedie team conducts rigorous investment analysis with an integrated and holistic approach to ESG issues; James has been a longstanding advocate of Responsible Capitalism. Challenge and debate are encouraged within a structured risk control environment.
  • Marketing and promotion: Employee ownership also underpins a genuine focus on client service and Majedie’s experience across the retail and wealth management spheres – which account for over half the firm’s clients by value – will support the marketing and promotion of the Company.

 

Background to the change of investment manager
As detailed in the Interim Results announcement also published today, the Company has experienced another period of weak investment performance. This extends the period of under performance relative to the Company’s benchmark to over three years and is a major disappointment for the Board as well as our shareholders.
The Board understands that all good conviction fund managers experience periods of underperformance and a focus on long-term results requires shareholders sometimes to bear bouts of relative weakness especially during times when the fund manager’s style is out of favour.

However, your portfolio has suffered from a number of stock specific issues: that is to say large falls in prices of stocks held in the portfolio, the cause of which is specific to each stock rather than resulting from broad market movements. Collectively these stocks have been a significant contributor to the weak performance of the Company and increasingly has led the Board to question the effectiveness of the investment process. That is why the Board intensified its scrutiny of the way that the portfolio is managed more than a year ago, as set out in the Chairman’s statement in the 2019 Report and Accounts.

Since 2018, the Board has examined more closely the approach used to select stocks, as well as the methods and approach to portfolio construction. Then the Board extended its appraisal to cover all aspects of investment oversight. In the spring of 2019, an external investment consultant, Willis Towers Watson, was engaged by the Board to bring an independent perspective, alongside Investec Bank, its financial adviser. In addition, the Board undertook a process to consider alternative managers and has now concluded that it is in the best interests of shareholders to change Investment Manager.

Details on the appointment of Majedie
As set out in the heads of terms signed by the Company and Majedie, Majedie will receive an annual management fee of 0.48% of the market capitalisation of the Company up to £500 million and 0.465% on amounts above £500 million. This represents a significant reduction from the current levels of fees paid to Invesco of 0.55% of market capitalisation.

As a contribution to the costs of the change of Investment Manager, Majedie will waive the management fee payable to it for the aggregate period of three months from its appointment as AIFM.

The investment management agreement shall be terminable by either party serving three months’ notice.

The appointment of Majedie on the terms set out in the heads of terms is conditional on the execution of a new investment management agreement and other contractual documentation. Majedie will seek the required FCA regulatory clearances to act as the Company’s AIFM.

Expected Timing
The Company has provided notice to terminate the appointment of Invesco Fund Managers Limited as the Company’s AIFM, company secretary and administrator. Majedie’s appointment as AIFM is expected to become effective in Q1 2020.

Analyst call
There will be a conference call for analysts at 10.30am this morning, hosted by Glen Suarez, Chairman, The Edinburgh Investment Trust plc and James de Uphaugh, CIO, Majedie Asset Management.

To register for the call, please email Tulchan at EIT@tulchangroup.com

1 The investment objectives of the Company are, over the long term, an increase of the Net Asset Value per share in excess of the growth in the FTSE All-Share Index; and growth in dividends per share that at least matches the rate of UK inflation

2 Since 31 December 2006, at inception of sub-portfolio total returns measurement. Source: Majedie/Factset. Data from James’ sub-portfolio within the Majedie UK Equity strategy; to 30 November 2019, GBP, total return (with gross dividends reinvested). Since this return series is only available on a gross basis, a deduction has been made on an annual basis to provide an estimation for costs and charges using the proposed management fee rate, transaction costs and actual OEIC expenses.

Enquiries

Edinburgh Investment Trust plc
Glen Suarez (Chairman) via Tulchan below

Investec Bank plc
Tom Skinner + 44 20 7597 4000

Tulchan Group (Financial PR)
Simon Pilkington +44 207 353 4200
Lisa Jarrett-Kerr EIT@tulchangroup.com
Marta Parry-Jones

Notes to editors

Edinburgh Investment Trust plc
Founded over 130 years ago, The Edinburgh Investment Trust plc is an investment trust, with assets of approximately £1.3 billion. The Company’s investment objective for the long term is to outperform the FTSE All-Share Index on a Net Asset Value (NAV) capital return basis and to produce dividend growth in excess of the rate of UK inflation, by investing primarily in a portfolio of UK listed shares. It is listed on the London Stock Exchange and is included in the FTSE 250 index. The management of the portfolio is contracted out to external specialists under the terms of an investment management Agreement (“IMA”) and the current manager is Invesco Asset Management.

Majedie Asset Management
Established in 2002, Majedie is an independent, specialist investment boutique. It actively manages equities for institutional investors, wealth managers and endowments across a range of UK, US and Global strategies. Its assets under management were £10.8 billion as at September 2019. It has a team of 20 fund managers and analysts, out of a total of 60 employees.

James de Uphaugh will act as the Company’s Portfolio Manager.

James is Chairman and Chief Investment Officer of Majedie Asset Management. He is a fund manager and analyst with 31 years’ investment experience in UK and international equity markets.

James is responsible for co-managing both the UK Equity and UK Focus funds.

Before co-founding Majedie in 2002, James was a Managing Director at Mercury Asset Management (now BlackRock), where he was also Chairman of the UK Investment Group and Alpha Team Leader.

Chris Field will act as the Company’s Deputy Portfolio Manager.

Chris is an Executive Director of Majedie Asset Management. He is a fund manager and analyst with 32 years’ investment experience in UK and international equity markets. Chris is responsible for co-managing both the UK Equity and UK Focus funds.

Before co-founding Majedie in 2002, Chris had been a Director at Mercury Asset Management (now BlackRock), where he was also a member of the UK Investment Group.

Chris joined Rowan Investment Managers (a predecessor firm to Mercury Asset Management) in 1980. He holds the ASIP qualification and is an Associate Member of the CFA Society of the UK.  James joined Mercury Asset Management in 1988. He holds a Master of Arts degree in Economics from Jesus College, Cambridge. He holds the ASIP qualification and is an Associate Member of the CFA Society of the UK.

Past performance is not necessarily a guide to future performance. Since 31 December 2006, at inception of sub-portfolio total returns measurement. Source: Majedie/FactSet. Data from James’ sub-portfolio within the Majedie UK Equity strategy; to 30 November 2019, GBP, total return (with gross dividends reinvested). Since this return series is only available on a gross basis, a deduction has been made on an annual basis to provide an estimation for costs and charges using the proposed management fee rate, transaction costs and actual OEIC expenses.