(Alliance News) - Private equity fund LMS Capital PLC said Monday the independent members of its board have unanimously recommended the re-appointment Gresham House Asset Management Ltd as the company's investment manager.
LMS is holding an extraordinary general meeting on November 28, where shareholders will decide on whether or not to extend GHAM's tenure as manager.
GHAM supports the recommendation and has said it has so far received indications of support from LMS shareholders representing over 30% of the shareholder base.
The former LMS chief executive, and current non-independent board member, Robert Payne has opposed GHAM's proposal, and is instead proposing a self-managed solution - which would see him become chair.
GHAM said Payne's proposal poses "significant" risks to shareholder value. LMS agreed, saying GHAM offers the "best option for maximising long-term shareholder value". The asset manager said LMS underperformed the FTSE All Share by 95% over a 10-year period under a previous self-managed scheme led by Rayne.
GHAM is proposing a 12% to 15% target for annual returns, with income in excess of operating costs. The asset manager said it also has "credible plans" to scale up LMS in the future, which will further reduce cost ratios.
Since appointing GHAM in 2016, LMS said the asset manager has "delivered substantial benefits".
GHAM also acts as investment manager to London-listed Gresham House PLC, Gresham House Strategic PLC, Gresham House Energy Storage Fund PLC, Baronsmead Venture Trust PLC and Baronsmead Second Venture Trust PLC.
Shares in LMS Capital were 0.1% higher in London on Monday at 54.82 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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