Changes to Management Contract

RNS Number : 2347P

British Empire Sec & Gen Tst PLC

01 October 2013

 



British Empire Securities & General Trust plc

1 October 2013

British Empire Securities & General Trust plc (the "Company")

CHANGES TO MANAGEMENT CONTRACT AND INTENDED APPOINTMENT OF AVI AS ALTERNATIVE INVESTMENT FUND MANAGER

Following the annual review of the Company's investment management contract with Asset Value Investors (AVI), it has been agreed that no further performance related fees will be payable and that the annual management fee will be 0.7% of net assets. In addition, AVI will, in due course, be appointed the Company's  Alternative Investment Fund Manager under the EU's Alternative Investment Fund Managers Directive. AVI's additional costs of compliance with the Directive will be absorbed by AVI.

The new, simplified, fee arrangements will take effect from 1^st October 2013, the first day of the Company's 2013/14 accounting year.  The management fee will be payable monthly at a rate of 1/12 of 0.7% of net assets, measured as at the preceding calendar quarter end. In future the Company will meet the cost of corporate secretarial services provided by Phoenix Administration Services Limited. The management agreement will remain terminable on one year's notice, other than for "cause", and the other provisions of the management agreement are unchanged.

Under the previous arrangement AVI was entitled to an annual management fee of 0. 6% of the net assets of the Company as at the end of the preceding financial period. A performance fee of 6% was also payable for any outperformance in the net asset value (on a total return basis) over the benchmark at the year end, with a cap on aggregate management fees of 1% of net assets of the Company per annum.

The Directors believe that these changes, which were agreed constructively with AVI, will result in lower potential total expenses for the Company when the previous performance fee structure is taken into account and are consistent with the trend in the closed-ended funds market, following the Retail Distribution Review , to have greater simplicity and transparency in costs.

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For further information please contact:

Asset Value Investors: John Pennink / Joe Bauernfreund 020 7659 4800

Winterflood Securities: James Moseley 020 3100 0250

 

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