Statement re strategic review

RNS Number : 7158T

Aurora Investment Trust PLC

01 October 2010

 



Aurora Investment Trust plc

Strategic review.  Additional continuation votes.  Provision for a tender mechanism

Aurora Investment Trust plc ("the Company") announces that the Board has carried out a review of the Company's strategy, following consultation with a number of shareholders, particularly in the light of the strong investment performance over the last three years.  The review, which was led by the independent directors, focussed both on the discount to NAV at which the shares trade and on reducing the volatility of the net asset value ("NAV") performance in the past.

Discount control

The Board has considered the provisions that exist for shareholders to consider the future of the Company.  It believes that the Company should move to a schedule of more frequent continuation votes, on a three-yearly basis, starting in 2011.  An ordinary resolution that the Company should continue as an investment trust will therefore be put to shareholders at the AGM in 2011 and, if that is passed, similar resolutions will be put forward at the AGMs in 2014 and every three years thereafter.  (An ordinary resolution will also be put to the AGM in 2011 to cancel the continuation vote which is currently scheduled for 2012).

Furthermore, the Board considers that the Company should henceforth hold tenders so as to facilitate the liquidity of the Company's shares under certain conditions.  If, during the period of six months prior to calling the AGM (the date that the annual report is signed off), the discount to the NAV at which the Company's shares trade has exceeded 10% based on the daily average discount, the Company will implement a tender for 10% of the shares at a discount of 9%.

These new arrangements provide shareholders, as a group, the opportunity to liquidate the Company if it is their collective wish but to offer any individual shareholder with the possibility of selling his/her shareholding at a fixed discount if the market place cannot accommodate the sale.      

Investment policy

The Board's review considered what if any changes to the investment policy could be made to reduce the volatility of the net asset value returns without handicapping the fundamental investment style of the Manager.  It is currently enjoying very good success with the net asset value performance (total return) over the twelve months and three years to the end of August as follows:

                                                            12 Months                     3 Years

NAV:                                                    + 40%                           +  4%

AIC Peer Group:                                    + 10%                           - 11%

FTSE All-share Index:                            + 11%                           -   7%

Peer Group Ranking                               1^st/18                            3^rd/18

Source:  AIC Monthly Stats Publication

The investment style of the Manager includes concentrated portfolios with a relatively short list of holdings and exposure to relatively few sectors (often referred to as a "conviction" style of investing).  It is a style that is likely to produce relatively volatile returns and indeed it has, experiencing excellent positive returns at times but poor negative returns at other times.  The Board's review concluded that it would not be in shareholders' interest to change either the fundamental style of investment or the investment policy itself.

Enquiries to:

Will Rogers, Cenkos Securities plc, 0207 397 1920

Alex Hammond-Chambers, 0131 228 2233

John Luetchford, Cavendish Administration Limited, 0207 490 4355

 

END

 

 

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