TIDMINV
RNS Number : 6835U
Investment Company PLC
30 March 2023
The information contained within this announcement is considered
by The Investment Company plc to constitute inside information
pursuant to Article 7 of EU Regulation No. 596/2014 as it forms
part of domestic law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement via a
Regulatory Information Service, this inside information will be
considered to be in the public domain.
The Investment Company plc
("The Investment Company" or the "Company")
Proposed appointment of Investment Manager, proposed board
changes, proposed purchase by the Company of its own ordinary
shares
and
Proposed issue of ordinary shares in the Company
Further to the Company's announcement on 20 February 2023, the
board of The Investment Company is pleased to announce that,
following a thorough review of available opportunities, the Company
has entered into discussions to:
-- appoint Chelverton Asset Management Limited ("Chelverton") to
act as investment manager (" Investment Manager ") to the Company
with a new investment strategy of investing primarily in quoted
equities of UK small and mid-cap quoted companies to achieve
long-term capital growth;
-- provide an opportunity for shareholders to either retain some
or all of their shareholding in the Company with the proposed
Investment Manager offering a new investment strategy or,
alternatively, to realise their investment in cash (at the
prevailing net asset value per ordinary share, adjusted for
transaction costs); and
-- undertake an issuance of ordinary shares to existing and new
shareholders with the aim of increasing the size and liquidity of
the Company,
(together the "Proposals").
Founded in 1998, Chelverton is an independent, employee-owned
fund management firm with a strong focus on performance and
investor outcomes. As at 28(th) February 2023 Chelverton managed
c.GBP1.7bn across a number of mandates encompassing both open-ended
and closed-ended UK and European focused-funds including the MI
Chelverton UK Equity Growth Fund, managed by the UK Equity Growth
Team. By focussing on long-term investor returns that can be
generated by companies with rising cashflows, the team seeks to
take advantage of the potential for superior long-term capital
performance of certain UK small and mid-cap quoted companies.
Should the Proposals become effective, in order to generate
long-term capital growth, the Company intends to pursue an
investment strategy of investing in cash-generative UK small and
mid-cap quoted companies that are expected to grow faster than the
UK stock market as a whole over the long term and which can finance
their own organic growth.
This strategy has been successfully deployed by the MI
Chelverton UK Equity Growth Fund, which has returned 222.05% since
launch in October 2014 (Source: Morningstar, NAV to NAV, B Shares
Acc, Total Return to 28.02.2023).
It is intended that the Chelverton UK Equity Growth Team,
comprising of James Baker, Ed Booth and Henry Botting would be
responsible for the management of the Company's portfolio.
As part of the Proposals, certain employees of Chelverton intend
to subscribe for ordinary shares in the Company.
It is also intended that David Horner (founder and Managing
Director of Chelverton) will be appointed to the board of the
Company (the "Board") as a non-executive director. David has
indicated to the Board that he intends to waive his remuneration
entitlement. Michael Weeks intends to step down from the Board on
completion of the Proposals. The other directors of the Company are
expected to remain as directors following completion of the
Proposals.
The Board believes that the Proposals will provide shareholders
with the opportunity to either remain in a vehicle managed by an
award-winning asset manager with a strong track record of creating
value for its investors, or to receive a full cash alternative for
those shareholders who wish to realise their investment (through a
process which is comparable in terms of cost, but more timely, than
a liquidation of the Company).
Should the Proposals become effective, the continuing directors
of the Company have expressed their intention to retain their full
shareholdings in the Company.
The Proposals are conditional, inter alia, on shareholder
approval and further announcements will be made as and when
appropriate.
Ian Dighé, Chairman of The Investment Company, said:
"Having reviewed a number of potential opportunities and options
available to the Company, we are pleased to be putting these
proposals to shareholders. The directors believe that the proposals
offer existing shareholders two appropriate alternatives: either to
retain their shareholding in the Company whilst it pursues a growth
mandate managed by a team with a proven track record, or to have
their capital returned to them. The continuing directors look
forward to retaining their shareholdings in the Company and working
with the Chelverton team."
David Horner, Managing Director of Chelverton, said:
"We are investors with a long history of, and expertise in,
investment in UK small- and mid-cap quoted companies who believe in
the positive long-term compounding effect of rising corporate
cashflows on shareholder returns. It feels to us that we are at a
point in time where valuation levels in our investable universe are
extremely attractive as we believe that interest rates are set to
peak and economic growth is set to pick up."
Enquiries
The Investment Company plc +44 (0) 20 3934 6630
Ian Dighé, Chairman info@theinvestmentcompanyplc.co.uk
Singer Capital Markets - Sponsor +44 (0)20 7496 3000
James Moat / Alex Bond / Alex Emslie
Chelverton Asset Management Limited
David Horner/ Al Rae +44 (0) 7222 8989
ISCA Administration Services Limited
Company Secretary +44 (0) 1392 487056
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