Henderson Investors has launched its European Micro trust, which invests in the very smallest Europe...
Henderson Investors has launched its European Micro trust, which invests in the very smallest European companies, following its raising of £85.6m in a placing with institutional investors.
The trust, Hendersons first new closed ended fund in five years, will be run by the same team as the TR European Growth trust, with Stephen Peak as investment director and Simon Savill as portfolio manager responsible for implementing the investment strategy.
Shares in the trust are available in the Henderson Investors share plan and Isa. Initial commission of up to 3% is available to intermediaries on investments in the share plan and Isa, and annual renewal commission of 0.5% is available on the Isa.
The Micro trust will pay Hendersons an annual management fee of 1% of net assets and there is a performance fee in the event that the managers achieve performance in excess of a benchmark.
The fee is 20% of any outperformance in total return compared with the total return on the HSBC Smaller Europe (ex UK) index plus three percentage points over any accounting period. The fee is limited to 5% of assets as at the end of relevant accounting period. The group has used performance related fees in the past, the most notable of which is on the Henderson Technology investment trust.
The technology trust charges 10% of the amount by which the increase in the undiluted NAV exceeds the increase in the benchmark and 5% of the amount by which the undiluted NAV over each three year period exceeds Libor plus 5% over the same period.
For the year ending 30 April, this amounted to a performance related fee of £43.1m or 7.3% of NAV, according to UBS Warburg.
The Micro Trust's share capital will consist solely of ordinary shares and authority will be sought annually for the company to buy back its own shares if they trade at a significant discount in the market.
Shareholders will have the opportunity to vote on the continuation of the company at the annual general meeting of the company in 2005 and every three years thereafter.
The portfolio will consist of European companies with market capitalisations of up to £250m.
As the investment policy is expected to focus on capital growth, it is not expected the trust will pay significant dividends.
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