Shareholders in Richard Buxton’s soon to be liquidated Jupiter UK Growth trust will be rolled over into an open-ended Brown Advisory fund unless they opt for an alternative option.
The board of the investment trust announced in September it was planning to pull the plug on the closed-ended fund due to dwindling assets, which at the time were £26m.
On Thursday it announced shareholders would be rolled over into the $1.4bn Brown Advisory Global Leaders fund. The fund aims to achieve capital appreciation by investing primarily in global equities, unlike Jupiter UK Growth, which focuses on UK equities. It is an Irish-domiciled Ucits.
Rollover into the Brown Advisory fund would be the default option for shareholders and would be done on a tax efficient basis, the filing said. The trust board anticipated investors would be issued with sterling class B distribution shares, which were first launched in May 2018.
Alternatively, shareholders will be able to opt for a cash exit.
Brown Advisory Global Leaders performance
| 1m | 3m | 6m | 1yr | 3yr | 5yr | |
| Brown Advisory Global Leaders C Acc USD in US | 13.91 | 5.28 | 22.20 | 21.09 | 54.29 | 96.59 |
| IA Global sector in GB | 8.59 | 7.15 | 14.66 | 14.63 | 32.10 | 80.27 |
Source: FE Analytics
Switch into global fund with rival asset manager raises eyebrows
While it fairly common for an investment trust to rollover into an open-ended fund, it is less common for that fund to be managed by another asset manager.
A Numis analyst note said it would have been good to see a rollover option into another investment company but that the costs may have been relatively high given the small size of the potential assets rolling over. The market capitalisation today is £30m and the investment trust trades at a 7.08% discount, according to Hargreaves Lansdown data.
Numis also highlighted that the Brown Advisory fund is invested in global equities, while the Jupiter UK Growth trust sits in the AIC UK All Companies sector. The Jupiter UK Growth trust filing said the Brown Advisory fund had been picked following shareholder feedback. Hargreaves Lansdown is the largest shareholder with 34.8%, while Interactive Investor holds 9.1% and AJ Bell 2%.
Buxton (pictured) had been at the helm of the investment trust since May after the board sacked manager Steve Davies in February following a prolonged performance slump.
“It was always going to be an almost impossible task to turn around sentiment and attract sufficient demand to make the fund meaningful proposition for investors,” Numis said. “The threshold for what is considered a small investment company has increased in recent years with many investors focusing on those with market caps of at least £200m.”
Shareholder information on the proposals will be sent out “in due course”.
See also: Jupiter to shut Richard Buxton’s UK Growth trust
