Jupiter will take over the Rights and Issues Investment Trust following the retirement of longstanding manager Simon Knott.
Knott, who has been at the helm of the UK smaller companies trust for the last 39 years, will step down on 1 September at which point he will be replaced by Jupiter’s Dan Nickols (pictured). Knott will remain a non-executive director on the trust.
Nickols, who joined the fund group after it acquired Merian, currently runs the £934m Jupiter UK Smaller Companies fund. He will be supported by Matt Cable, who sits with him in the Jupiter UK equity small and mid-cap (Smid) team.
Rights and Issues will be the second investment trust in Jupiter’s product line-up, alongside Chrysalis Investments, which is also run by former Merian Smid managers Nick Williamson and Richard Watts.
While Chrysalis is on its way to becoming a self-managed trust, Rights and Issues will be ceding its independent structure, with Jupiter appointed as the alternative investment fund manager (AIFM).
Despite having few closed-ended investment companies in its stable, the board said shareholders would benefit from the £55.3bn fund group’s UK Smid expertise and “continuity of investment style”.
Jupiter’s brand power in the retail space was cited as another boon, which should help to maintain the share price at a low discount to net asset value.
Rights and Issue is currently trading at an 11.5% discount, according to the Association of Investment Companies. Chrysalis, which specialises in late stage growth companies, is lumbering under an even bigger discount of 38.7%.
Additionally, the board also plans to shake up the trust’s fee arrangement. Jupiter will receive a combined fee for its services as AIFM and investment manager which, together with the operating expenses, will not exceed 0.8% per annum of net assets.
The board said this would provide Rights and issues with the lowest ongoing charges figure of any trust with a market cap below £500m in the UK small and mid-cap sector.
Commenting on the appointment, Magnus Spence, head of investment trusts at Jupiter, said: “Jupiter is delighted to be chosen to manage the investment portfolio of the company following Simon Knott’s long and distinguished career. We are excited to be given the opportunity to manage a closed-ended fund at this time in a segment of the market which has many outstanding investment opportunities.”
