The Finsbury Growth & Income Trust managed by Nick Train has introduced an additional tier to its fee structure as it nears £2bn in market cap.
For assets beyond £2bn, the investment trust, which currently has a market cap of £1.8bn, will reduce to 0.48%. Lindsell Train Limited will take 0.36% of that fee, while Frostrow Capital, the alternative investment fund manager, will take 0.12%.
The existing tiers on the fund fees are 0.60% on the first £1bn, reducing to 0.54% on a market cap between £1bn and £2bn. The investment trust hit £1bn in February 2017 and £1.5bn in March this year, according to Association of Investment Companies data.
The board of the investment trust said the changes come into effect immediately.
Under the arrangements, Frostrow Capital now takes tiered fees of 0.15%, 0.135% and, for the newest tier, 0.12%. Lindsell Train Limited’s fees will be 0.45%, 0.405% and 0.36% at each tier.
In 2019, 25 investment trust boards have negotiated lower fees, according to AIC communications director Annabel Brodie-Smith.
“Since 2013, over a third of investment companies have reduced their charges to benefit shareholders by cutting management fees, eliminating performance fees or introducing a tiered fee structure,” Brodie-Smith said.
Unlike the Lindsell Train Investment Trust, Finsbury Growth & Income does not have a performance fee. The former trust has come under criticism in the past for using a government bond benchmark, landing Lindsell Train £2.4m in performance fees in the last financial year.
The Lindsell Train Investment Trust currently trades at a 27.7% premium, less than a third of the 88% it was trading at in May, according to AIC data. Finsbury Growth & Income currently trades at 0.7% premium.
