Change of Manager
February 01 2012 - 2:00AM
UK Regulatory
TIDMFAME
Framlington AIM VCT PLC
Change of investment manager
As reported in the announcement of the results of the Company for the year
ended 30 September 2011 released today, the Board has, given the disappointing
performance of the AIM market, been considering for some time a new strategic
direction for the Company. Experience over the last few years has shown that
AIM is not necessarily the best place for VCT funds with VCTs specialising in
unquoted investments in general having offered better returns.
The Board has, therefore, decided to change the manager of the Company to a
manager that specialises in managing both AIM and unquoted investments. The
Board invited a number of experienced investment managers to submit their
proposals for taking over the management of the Company and after due
consideration, has decided to appoint Downing LLP as the Company's investment
manager. The appointment of Downing LLP is currently expected to be effective
from 1 March 2012.
Following this appointment, the name of the Company will be changed to Downing
Income VCT 4 PLC.
As part of this agreement, Downing has committed to conduct an additional
fundraising for the Company which should make the running of the Company more
economic and provide additional funds for investment. This should also enable
the Company to operate a share buy back policy nearer to net asset value, which
may also have a positive impact on the Company's share price.
Downing has also agreed to manage the Company for a lower annual fee of 1.8%,
and to institute a lower overall cost cap of 3%, which is one of the lowest in
the VCT industry.
Downing LLP is an experienced and successful VCT manager with funds under
management of approximately GBP285m. It proposes, subject to shareholder
approval, to follow a different investment strategy. Downing will, over time,
transfer around half of the qualifying investments into unquoted companies
which have the potential to generate attractive returns. It will in the process
manage a careful selling programme of a number of the Company's AIM stocks and
will focus upon the AIM stocks where it believes there is the most opportunity
for upside. This change of strategy will reduce the Company's exposure to the
AIM market, which has been volatile, and broaden the investments in the
portfolio to include private equity backed businesses. This change of strategy
will require shareholder approval and accordingly a resolution to amend the
Company's investment policy will be put to shareholders at the Annual General
Meeting to be held on 13 March 2012.
The Board would like to thank AXA Framlington for its work as investment
manager to the Company since launch and for its co-operation in the change of
investment manager. In October 2011 the Board gave 12 months' notice to AXA
Framlington in accordance with the investment management agreement. AXA
Framlington has kindly agreed to waive payment of the final seven months' worth
of its fee due to 31 October 2012.
Framlington AIM VCT PLC
31 January 2012
Enquiries:
Framlington AIM VCT PLC
Chris Kay, Director: 020 7486 7599
Downing LLP
Judith MacKenzie 020 7416 7780
Colin Corbally 020 7416 7780
END
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