Company Update

RNS Number : 1600U

Henderson Asian Growth Trust plc

21 December 2012

 



HENDERSON ASIAN GROWTH TRUST PLC (the 'Company')

21 December 2012

Company Update

Further to the Company's announcements on 22 October and 5 December 2012, the Board has now concluded its review of the Company's investment management arrangements after a thorough and rigorous process involving its advisers Mercer and Winterflood.

The Board has decided to appoint Schroders to manage the Company's assets.  In connection with Schroders' appointment, the Board will seek shareholder approval to change the Company's investment policy to one which seeks a high rate of total return from companies operating primarily in Asia, including Australasia but excluding Japan.  The investment strategy also provides downside protection.

The Company's assets would be managed by Robin Parbrook and King Fuei Lee, two of Schroders' senior portfolio managers based in Hong Kong and Singapore respectively.  They currently jointly manage Schroder ISF Asia Total Return to this objective.  It has US$1.9 billion of assets and has maintained a top quartile performance record since its inception in November 2007.  From inception to 30 November 2012 Schroder ISF Asia Total Return has generated an annualised 12.9% return for its investors (in US$) and low volatility of returns with annualised standard deviation of 21.1% (Source: Lipper, Schroders).   The Board was very impressed both by the strength and depth of Schroders' research team in Asia and by the rigorous and innovative approach to portfolio construction and capital protection employed by the portfolio managers.  The investment strategy employed by ISF Asia Total Return would be modified for the Company to accommodate a bias towards small and mid cap companies.

If shareholders approve the investment policy change summarised above, the Company would actively defend a discount to NAV on the Company's shares of no greater than nine per cent., in normal market conditions, through the use of the Company's share buyback authorities.   Shareholders would have the opportunity to vote on the Company's continuation every three years, with the first opportunity being at the AGM in 2016.  Schroders has agreed to waive its proposed base management fee and any performance fee in respect of the first six months of its appointment.   The Company's current management arrangements will be revised and the terms will be set out in full in a shareholder circular.

In addition to proposing the changes described above, the Board will seek shareholder approval for a tender offer for up to 50 per cent. of the Company's shares in issue at Formula Asset Value (namely Net Asset Value less applicable costs of conducting the tender offer, including portfolio realisation costs).  The record date for participation in the tender offer will be at close of business on Friday 28 December 2012.

The Board believes that the proposed tender offer combined with the appointment of Schroders and the proposed revisions to the Company's investment policy are all in the best interests of shareholders.   Together they will provide shareholders with an opportunity to participate in a successful absolute return focussed strategy which is differentiated from other closed-ended Asian investment companies while allowing shareholders wishing to realise their investment in the Company to do so.  Schroder ISF Asia Total Return strategy is currently closed to investment and has not been widely available to retail investors.

It is expected that a circular setting out the proposals in full and convening a general meeting to approve both the changes to the Company's investment objective and the tender offer will be sent to shareholders in early 2013.  Realignment of the portfolio in accordance with the new investment policy will commence upon completion of the tender offer. 

Enquiries:

David Robins

Chairman

07774 732 955

Jane Lewis

Winterflood Investment Trusts

020 3100 0295

 

END

 

 

DOCLLFLFFLLLFIF