LONDON (Alliance News) - Aurora Investment Trust PLC on Friday said its portfolio showed "some welcome outperformance" amid a tough time for stock markets, brought on by concerns about Greek debt, a looming US interest rate rise and concerns about China's economic slowdown.
The trust invests primarily in equities listed in the main on the London Stock Exchange. It also puts some of its assets into fixed interest investments. The news comes within week's of the trust saying that a deal was agreed for its investment manager, Mars Asset Management Ltd, which had been set to retire, to be acquired by Phoenix Asset Management Partners Ltd.
The net asset value, referring the difference between assets and liabilities, of the portfolio fell by 5.7% to 161.64 pence per share over the course of the six months to August 31. In that time, the trust said, the FTSE All-Share index declined by 8.3%, while the FTSE 100 Index fell by 10.0% due to its exposure to oils and commodities.
"The proposal is for the company's existing manager to be acquired by Phoenix. It is then intended that the company's investment policy and strategy will reflect the successful investment style adopted by Phoenix since its establishment in 1998," Chairman Lord Flight said in a statement.
According to Phoenix it "aims to deliver excellent long term returns investing in UK listed equities by identifying great companies managed by honest and aligned managers and buying them when they trade at attractive prices. Phoenix takes a long term view and ignores interim market volatility. Phoenix intends to build a portfolio consisting of 15 to 20 holdings with a concentration in the top holdings."
"Since its founding in 1998, the Phoenix UK Fund has risen by 435.1% compared to 110.6% for the FTSE All-Share Index, including dividends."
The plan is for Phoenix to receive no basic management fee each year. The new investment manager will be entitled to a performance fee based on annual outperformance of the FTSE All-Share Total Return.
Aurora intends to make a tender offer for all shareholders at a 2% discount to the NAV per share, less the direct costs of the tender offer, provided the tender offer offers shareholders a lower discount to NAV than can be achieved through the market.
The proposals are subject to shareholder approval.
Shares in Aurora were untraded on Friday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Aurora Inv.tst. (ARR)