Notice of EGM

MITON WORLDWIDE GROWTH INVESTMENT TRUST PLC

NOTICE OF EGM

Miton Worldwide Growth Investment Trust plc (the “Company”) announced on 24 July 2015 that it intended to recommend proposals (the “Proposals”) which, conditional on the continuation vote being passed at the AGM, introduced provisions providing Shareholders with opportunities to elect, in 2018 and then at three year intervals, to realise all or part of their Shareholding.

The Company today announces that it is convening a General Meeting of the Company to be held on 9 September 2015, immediately preceding the AGM, to consider proposals as detailed below.

Introduction

The Company’s Articles require currently that a continuation vote is held at every third Annual General Meeting. The next continuation vote is due to be proposed at the 2015 Annual General Meeting to be held immediately after the General Meeting convened by this Circular. For the reasons explained in more detail below and in the Annual Report of the Company for the year ended 30 April 2015 the Board is recommending that Shareholders vote in favour of continuation at the 2015 Annual General Meeting and the Board is also putting forward in this Circular, and recommending that Shareholders vote in favour of, Proposals on the future structure of the Company. Under these Proposals, conditional on the continuation vote being passed at the 2015 Annual General Meeting, the Articles will be amended to remove the requirement for future continuation votes and instead to include provisions enabling Shareholders to elect, with effect from the 2018 Annual General Meeting, for the realisation of their Shares as described below.

It is also proposed at the General Meeting to amend the management fees and the performances fees payable to the Manager under the Management Agreement.

Continuation vote and future structure of the Company

The Board is recommending that at the 2015 Annual General Meeting the Shareholders vote in favour of continuation.  We are aware that we are a smaller investment trust whose shares have traded at a discount since the last continuation vote and, with a view to addressing this, we are therefore at the same time recommending Proposals on the future structure of the Company, conditional on the continuation vote being passed.

The Directors believe that the Company has a differentiated mandate adopting an investment approach that is not replicated by other trusts. As the investment trust sector continues to evolve, so too the Board believes it has to ensure our mandate and structure remain relevant. We believe the changes in the investment companies market mean the investment case for a broadly based mandate exploiting inefficiencies across all parts of the investment companies market, delivering capital growth whilst being aware of downside risks, is a strong as ever.

We also recognise that many potential investors are now reluctant (or even unable) to invest in smaller less liquid vehicles. Those who may want to invest may find it hard to build a meaningful position. The discount therefore remains frustratingly wide and the Company cannot grow.

We are therefore putting forward proposals to change the Articles, as described under “Realisation Opportunity” below, so that Shareholders will be offered the opportunity to elect to exit the Company at three year intervals. Our intention is to use the revised structure of the Company as a platform for a marketing strategy, but we believe we have to give existing Shareholders and potential new investors the opportunity of an unconditional realisation opportunity, if they are to have the confidence to commit more capital to the Company.

The Board believes this opportunity will give potential investors greater confidence that they will not be trapped in a small illiquid trust trading at a discount. Importantly, this new structure (unlike tenders or buybacks) is aligned with the Manager’s investment approach where the underlying investments are less liquid and Shareholder value can be best delivered by managing a closed-ended pool of investments and thereby not having to sell to meet short-term cash requirements.

We believe and expect that many Shareholders will wish to remain invested in three years’ time and continue to benefit from the investment strategy. At that stage there may be a new group of investment companies that have fallen out of favour and will have the potential to deliver attractive returns for our specialist approach.  Equally, we recognise that if insufficient Shareholders decide to remain invested in 2018, or at subsequent election dates, it will be appropriate for the entire portfolio to be realised rather than to perpetuate the Company’s life. We believe smaller investment companies need to be bold or they will gradually lose appeal with the result that discounts and illiquidity become entrenched to the detriment of Shareholder value.

The Board believes the Company’s investment offering has wider appeal. We believe the structural changes should give potential investors reassurance on the liquidity of the Company and the running costs as expressed in the Ongoing Charges figure. If we continue to perform and market our shares effectively, we believe the Company can grow and become a more attractive vehicle to our Shareholders.

In the event that the Company’s Shares continue on average to trade at a material discount to NAV during the 30 calendar days preceding the date of the 2016 Annual General Meeting, the Board will further review the Company’s discount management policy, in consultation with the Company’s major shareholders.

Realisation Opportunity

The Board is proposing that the Company’s Articles be amended, conditional on the continuation vote being passed at the 2015 Annual General Meeting, to remove the requirement for future continuation votes and to include provisions enabling Shareholders to elect, with effect from the date of the 2018 Annual General Meeting, for the realisation of their Shares in accordance with the procedure described below. 

A reminder of Shareholders’ rights to elect to realise their Ordinary Shares at the 2018 Annual General Meeting and at each Annual General Meeting in every third year thereafter, will be sent to Shareholders with the notice of the Annual General Meeting to be held on each Reorganisation Date.

It is intended that the Company will seek admission of the Realisation Shares to the Official List and, if required at the time the prospectus rules of the UK Listing Authority or by other law or regulation, a prospectus in relation to the Realisation Shares will be produced and sent to Shareholders at that time. It is anticipated that the cost of producing any such new prospectus will be apportioned to the Pools pro rata to the number of Ordinary Shares and Realisation Shares. Shareholders may elect to realise all or part of their holdings of Ordinary Shares in the Company by electing for Realisation with effect from the Reorganisation Date. Subject to the aggregate NAV of the continuing Ordinary Shares at the close of business on the last Business Day before the Reorganisation Date being not less than £30 million, each Ordinary Share in respect of which an election for Realisation has been made will be redesignated as a Realisation Share. The rights of holders of Ordinary Shares (being Shares in respect of which no election for Realisation has been made) and of Realisation Shares will be as follows: the Portfolio will be split into two separate and distinct Pools namely the Continuation Pool comprising the assets attributable to the continuing Ordinary Shares and the Realisation Pool comprising the assets attributable to the Realisation Shares (which assets will be managed in accordance with an orderly realisation programme with the aim of making progressive returns of cash to holders of Realisation Shares as soon as practicable) with effect from the Reorganisation Date. Elections for Realisation must be made not less than seven nor more than 28 days before the relevant AGM. Ordinary Shares held by Shareholders who do not submit a valid and complete election in respect of those Shares in accordance with the Articles during the Election Period will remain Ordinary Shares.

It is anticipated that the Portfolio will be divided pursuant to the Realisation, as at the close of business on the Reorganisation Date between the Continuation Pool and the Realisation Pool with assets comprised in the Portfolio being apportioned to the Realisation Pool pro rata to the number of Ordinary Shares in respect of which elections for Realisation have been validly received and the remainder of the assets being apportioned to the Continuation Pool. The liabilities of the Company will be similarly apportioned as between the Pools with liabilities being apportioned to the Realisation Pool pro rata to the number of Ordinary Shares in respect of which elections for Realisation have been validly received and the remainder of the liabilities being apportioned to the Continuation Pool save that the costs and expenses of the realisation of the assets comprising the Realisation Pool will be attributed to the Realisation Pool and the costs and expenses of the Realisation will be apportioned between the Pools as the Board in its discretion deems fair and reasonable. Assets that are not divisible pro rata, due to their nature, will be apportioned between the Pools as the Board in its discretion deems fair and reasonable. Upon a future disposal of such assets, the disposal value will be similarly apportioned between each Pool. 

The precise mechanism for any return of cash to holders of Realisation Shares will depend upon the relevant factors prevailing at the time and will be at the discretion of the Board, but may include a combination of capital distributions, share repurchases and tender offers.  The resolution to be proposed at the General Meeting to amend the Articles as described above will authorise such share repurchases and tender offers.  Shares repurchased from time to time will be cancelled. A resolution to renew the authority will be proposed at the Annual General Meeting of the Company to be held in 2017 and every third year after that.

If one or more Realisation Elections are duly made and the net asset value attributable to the continuing Ordinary Shares (being those Ordinary Shares in respect of which Realisation Elections have been made) at the close of business on the last Business Day before the Reorganisation Date is less than £30 million, the Realisation will not take place, no Ordinary Shares will be redesignated as Realisation Shares and the Portfolio will not be split into the Continuation Pool and the Realisation Pool.  In this circumstance, with effect from the Reorganisation Date, unless the Directors have previously been released from this obligation by an extraordinary resolution, the investment objective and investment policy of the Company will become to realise the Company’s assets on a timely basis with the aim of making progressive returns of cash to Shareholders as soon as practicable. The Directors will seek to realise the Company’s assets as efficiently and at as much value as is possible.

Related party transaction

If the proposal to amend the Articles is approved, then the management and performance fees payable by the Company to the Manager will be amended to reflect new fee arrangements in respect of the share reorganisation (the “Related Party Transaction”) as follows:

Charge based on:	Management fee	Performance fee - based on cash realised
Ordinary Shares	The management fee relating to the Ordinary Shares shall be calculated at an annual rate of 0.65% (increased from 0.5%) of the adjusted market capitalisation of the Ordinary Shares valued at the close of business on the last Business Day of each month. The management fee accrues daily and is payable in arrears in respect of each calendar month.	The existing performance fee will cease to be payable. Performance fees will only be payable in future by the Company in respect of the realisation of assets in the Realisation Pool or the realisation of assets where the Company as a whole moves onto a realisation basis.
Realisation Shares	The management fee relating to Realisation Shares shall be calculated at an annual rate of 0.5% of the adjusted market capitalisation of the Realisation Shares valued at the close of business on the last Business Day of each month. The management fee accrues daily and is payable in arrears in respect of each calendar month.	The performance fee will be 15% of all cash realised and returned to holders of Realisation Shares from the realisation of assets in the Realisation Pool in excess of the Hurdle* and will become payable once the aggregate net asset value of undistributed assets (including cash) remaining in the Realisation Pool is less than 5% of the aggregate net asset value of the assets in the Realisation Pool on relevant Reorganisation Date. There will be no annual cap on this fee.
Where Company as a whole moves onto realisation basis	The management fee will be calculated at an annual rate of 0.5% of the adjusted market capitalisation of the Company valued at the close of business on the last Business Day of each month. The management fee accrues daily and is payable in arrears in respect of each calendar month.	The performance fee will be 15% of all cash realised from the realisation process in excess of the Hurdle* and will become payable once the aggregate net asset value of undistributed assets (including cash) is less than 5% of the aggregate net asset value of the Company on the relevant Reorganisation Date. There will be no annual cap on this fee.

*Hurdle: the Hurdle shall be an amount per share equivalent to interest at a rate equal to 3 month sterling LIBOR on Reorganisation Date plus 5% per annum, measured from the date on which Resolution 1 to be proposed at the General Meeting becomes effective and calculated by reference to the net asset value per Ordinary Share as at that date, until to the date when the aggregate net asset value of undistributed assets (including cash) remaining in the relevant pool is

(a) where the Company operates a continuation pool and a realisation pool,  less than 5% of the aggregate net asset value of the assets in the Realisation Pool on the relevant Reorganisation Date; or

(b) where the Company as a whole has moved onto realisation basis, less than 5% of the aggregate net asset value of the Company on the relevant Reorganisation Date.

These changes to the Management Agreement are classified as a related third party transaction under the UK Listing Rules and therefore the Board is required to seek Shareholders’ approval for the amendments by way of an ordinary resolution at the General Meeting.

Benefits of the Proposals

The Proposals which Shareholders are being asked to consider and approve at the General Meeting are intended to have the following benefits for Shareholders:

• the liquidity of the Shares is expected to be enhanced as Shareholders will have the opportunity to elect for realisation at three year intervals;
• the demand for the Shares in the market is expected to grow, as potential investors will have greater confidence as to liquidity, which other things being equal, should influence the discount to NAV at which the Shares trade; and
• the new structure will be aligned with the Manager’s investment approach where the underlying investments are less liquid and Shareholder value can be best delivered by managing a closed-ended pool of investments.

General Meeting

The Resolutions are conditional on the approval by Shareholders of resolution numbered 10 set out in the notice of the Annual General Meeting of the Company to be held on 9 September 2015.

Resolution number 1 will be proposed as a special resolution to amend the Articles as described above and to authorise the Company to repurchase Realisation Shares. Resolution number 2 will be proposed as an ordinary resolution to approve the proposed amendments to the Management Agreement.

All Shareholders are entitled to attend and vote at the General Meeting. In accordance with the Articles, all Shareholders present in person or by proxy shall upon a show of hands have one vote and upon a poll shall have one vote in respect of each Share held. In order to ensure that a quorum is present at the General Meeting, it is necessary for two Shareholders entitled to attend and vote to be present, whether in person or by proxy (or, if a corporation, by a representative).

All holders of Ordinary Shares are entitled to vote on the Resolutions.  However, the Manager has undertaken to abstain from voting on Resolution number 2 and to take all reasonable steps to ensure that its associates and funds managed by it and its associates abstain from voting on that Resolution.

Enquiries

Miton Group plc
David Barron
DDI: [phone]
Email: [e-mail]

Numis Securities Limited
Nathan Brown, Corporate Broking and Advisory
DDI: [phone]
Email: [e-mail]