Investment Management Arrangements

RNS Number : 7479V

Schroder UK Growth Fund PLC

30 October 2014

 



30 October 2014

Schroder UK Growth Fund plc

Investment Management Arrangements

The Board of Schroder UK Growth Fund plc (the "Company") announced on 11 September 2014 that, following the departure of Julie Dean from Schroders, it was conducting a full review of its investment management arrangements.

The Board is pleased to announce that, following the conclusion of this review, the Company has decided to retain Schroder Unit Trusts Limited as its manager.

Philip Matthews will assume the responsibility of lead portfolio manager with immediate effect.  Philip has managed the £1.5bn Schroder UK Alpha Plus Fund since taking over from Richard Buxton in October 2013.  Prior to joining Schroders in 2013, he ran the Jupiter Growth & Income Fund for seven years, where his performance exceeded the return on the  FTSE All-Share benchmark index, and was placed in the top quartile over one, three, five and seven year horizons. (Source: Morningstar, bid to bid, net of fees and expenses, net income reinvested, periods to 30 April 2013).

The Board was very impressed by Philip's disciplined investment process which focuses on long term earnings and valuations in a rigorous and objective way enabling him to generate consistent outperformance for investors.  The Board also recognises the strength and depth of the Schroder UK equities investment team that works alongside Philip; and the experience of the investment trust team, with which it has worked for many years, that supports and promotes the Company.

Management Review Process

The Board's decision follows a comprehensive and wide ranging review of investment management options over the last few weeks. A substantial number of managers indicated an interest in managing the Company's portfolio and the Board acknowledges and appreciates the work done by the various management groups involved in preparing and submitting detailed proposals. In this review process the Board has been guided by the Company's major shareholders' wish to maintain the Company's current investment objective and mandate. The Board was also mindful of seeking to maintain the stability of the Company's share register and rating throughout and following this review.

The Board narrowed down the proposals through several rounds of written submissions and extensive due diligence, culminating in final presentations by a short-list of managers.  In assessing the options, the Board considered a number of factors, including management track record, risk management, investment process, depth of investment resource, administration, shareholder relations and marketing capabilities.

While a number of highly credible options were put forward, the Board unanimously concluded that Philip Matthews and Schroders demonstrated the most compelling combination of a strong long-term track record, a well-resourced management team in the UK equity sector and a commitment and capability to supporting the Company both in marketing and administration.

Investment management fee

In connection with its retention, Schroders has agreed to reduce the management fee charged to the Company. With effect from 1 November 2014, the annual management fee will be 0.5% of the Company's net assets, reduced from 0.6%.

Transitional arrangements

Philip will assume the portfolio management responsibilities with immediate effect and the Company's assets will be managed in line with its existing investment objective and policy.

Schroders have agreed to bear all the costs associated with the change of lead manager by way of a management fee waiver.

Alan Clifton, Chairman commented: "The decision to remain with Schroders reflects the fact that they put forward a highly rated manager in Philip Matthews with an excellent and consistent investment process and performance record and a world class support team. We have also been impressed with Schroders' commitment actively to promote the Company and their strong desire to retain this mandate. This has been demonstrated by the proposed fee reduction and the offer to pay for all the costs of transition to ensure that this process will not have any adverse cost impact on our shareholders. The Board and its advisers have worked to minimise the period of uncertainty following Julie Dean's departure, and is confident that the Company is now well positioned to deliver strong performance for our investors."

Enquiries:

Schroder UK Growth Fund plc Alan Clifton (Chairman)	07712 137 120
Winterflood Investment Trusts Joe Winkley Neil Langford	020 3100 0000

 

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