10 November 2022
Majedie Investments PLC (the “Company” or “Majedie”)
Change of Investment Management Arrangements
· Company to appoint Marylebone Partners LLP (“Marylebone Partners”) as investment manager.
· Proposed change to the Company’s investment objective and policy to follow a liquid endowment investment strategy.
· Board to target an annual dividend, paid quarterly, of approximately 3 per cent. of Net Asset Value.
· Company to become a Member of Marylebone Partners, entitling Majedie to 7.5 per cent. of the residual profits and capital interest in Marylebone Partners, for no consideration.
· New demand for the Company’s shares identified.
The Board of the Company is pleased to announce that, following an extensive review of the Company’s investment management arrangements, it has entered into a conditional agreement to appoint Marylebone Partners as the Company’s investment manager and AIFM.
Founded in 2013, Marylebone Partners is an independent firm, currently managing approximately US$ 400 million for professional and institutional clients who include charities, foundations, family offices, high-net worth individuals, and trusts.
With equities at its heart, Marylebone Partners’ long-term, fundamental approach is aligned with Majedie’s ethos. Their proposition met the Board’s criteria for an investment manager who could deliver strong investment outcomes and bring a new and relevant proposition to the investment trust sector, whilst developing the Company’s culture and history.
The Board selected Marylebone Partners for its ability to identify differentiated investment opportunities and reputation for protecting and growing the wealth of its clients. Marylebone Partners’ investment approach includes three core strategies, comprising eclectic special investments, allocations to specialist funds managed by third parties and a focused portfolio of listed equities. Marylebone Partners sources investments through a global network, which its principals have built over nearly three decades at industry leading firms. The Board believes it will be increasingly important to identify differentiated sources of performance from the large and growing set of less researched opportunities that are available within this wider investment mandate, in addition to the those in the major asset classes.
In conjunction with the appointment of Marylebone Partners, the Company intends, subject to shareholder approval, to amend its investment policy to pursue a high-conviction, long-term approach that is unconstrained by geographic limitations or any formal benchmark (the “New Investment Policy”).
Following adoption of the New Investment Policy, the Company will target annualised total returns (net of fees and expenses, in GBP) of at least 4 per cent. above the UK Consumer Price Index, measured over rolling five-year periods. The target total return will include an annual dividend, paid quarterly. Each quarterly dividend payment is initially expected to comprise 0.75 per cent. of the relevant quarter-end Net Asset Value, leading to an annual dividend of approximately 3 per cent. of Net Asset Value.
The Company intends to seek shareholder approval of the New Investment Policy at a general meeting of the Company expected to be held alongside the Company’s Annual General Meeting in January 2023 (the “General Meeting”). Assuming shareholders approve the New Investment Policy, Marylebone Partners will be appointed as the Company’s investment manager and AIFM immediately following the General Meeting.
The Board believes the change in investment manager and the adoption of the New Investment Policy will provide the following benefits to shareholders:
· Potential for strong and repeatable investment performance, enabled by a transition to a liquid endowment model. Over the three years to 30 September 2022, Marylebone Partners’ representative track record has delivered net annualised performance in GBP of +8.4 per cent., some 4 per cent. ahead of the U.K. Consumer Price Index.
· A differentiated return profile, designed to complement shareholders’ other investments. Given the opportunity across its three core activities, Marylebone Partners believes it should be possible to deliver capital appreciation, whilst funding a dividend out of a combination of underlying income and capital growth.
· Alignment of interests and participation in the future growth of Marylebone Partners. The Company will receive, for no consideration, an interest in Marylebone Partners entitling it to 7.5 per cent. of residual profits and capital.
· New demand for the Company’s shares. The Board is aware of investors (including parties connected to Marylebone Partners) who have expressed an interest in becoming shareholders. The Board and Marylebone Partners believe this may help narrow the discount to Net Asset Value at which the Company’s shares trade currently, whilst potentially improving liquidity and paving the way for future growth.
· Cost mitigation. Marylebone Partners will reduce the management fee payable by Majedie by 50 per cent. for a period of twelve months and make a significant ongoing contribution to the cost of marketing the Company.
Christopher Getley, Chairman, commented:
“Following its review of the Company’s investment objective together with the range of assets to be included within the Company’s portfolio, the Board of Majedie Investments is very pleased to appoint the team at Marylebone Partners to manage the Company’s assets. Marylebone’s appointment will allow all shareholders to benefit from their successful track record in investment in a differentiated, but relatively liquid multi-asset portfolio and also position the Company to grow over time. The Company’s portfolio will bring together Marylebone Partners’ best opportunities in listed equities as well as the large and growing universe of less researched assets where skilled investors are able to add more value.
Dan Higgins, Founder of Marylebone Partners, commented:
“We are extremely excited to be appointed as the investment manager of an investment trust with such a long and distinguished history. The listed and closed-ended format will enable us to take advantage of the full range of investments within our scope, giving a new client base access to these opportunities. After the recent dislocations caused by economic and geopolitical concerns, we see greater opportunity than for many years. We look forward to working with the Board and will work hard to deliver for Majedie’s shareholders.”