Richard Staveley will once again take the reins of Gresham House Strategic, following the board’s decision to sack the trust’s manager Gresham House.
Following a four-month long strategic review of the trust, the board said it had decided to terminate Gresham House with immediate effect and install Harwood Capital, subject to regulatory approval.
Portfolio Adviser contacted Gresham House for comment on the decision but did not hear back in time for publication.
The £59m trust, which will rebrand to Rockwood Strategic, becomes the fourth investment company in Harwood’s stable. The London boutique is home to the £878m North Atlantic Smaller Companies trust, run by founder Christopher Mills, as well as the £145m Odyssean Investment Trust.
In a surprising turn of events, the board revealed GHS’ former lead manager Staveley (pictured) would return to take up the reins of the UK smaller companies trust once again. The River and Mercantile founding partner abruptly resigned from Gresham House in May, days after the board announced it was initiating a strategic review of the trust.
See also: Gresham House Strategic shares skid as board responds to Richard Staveley resignation
Tensions had been brewing between Gresham House and the board over longstanding governance concerns, including the 18-year tenure of chairman David Potter. On 21 May Gresham House called for an emergency shareholder meeting to vote on a proposed board shakeup but dropped its request after Potter bowed out in June.
Harwood slices management fees
GHS interim chair Helen Sinclair said Harwood’s “exceptional expertise” as a long-term investor in public and private equity and its commitment to invest more heavily in marketing the trust would help reverse its stubborn discount. Shares in the company are currently trading 10.7% below net asset value.
Under the terms of the agreement, Harwood will lower the management fees from 1.5% of net asset value per annum to 1.25% of NAV up to £25m and 1% of NAV thereafter per annum, a move which will result in an annualised cost reduction of £270k.
It has also agreed to a revised performance fee equal to 10% of outperformance over the higher of a 6% total return hurdle and the high watermark, which Sinclair said “should be even more material for shareholders”.
Shares in GHS rose modestly on Monday by 0.2% to £17.03.
