2 Oct 2019 17:10
Jupiter European Opportunities Trust PLC
Legal Entity Identifier: 549300XN7RXQWHN18849
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014. This announcement has been authorised for release by the Board of Directors (the "Board").
2 October 2019
Management update
Since the Company's announcement on 1 July 2019 regarding Alexander Darwall's intention to establish a new investment management company, Devon Equity Management Limited ("Devon"), the Board has undertaken a consultation with major shareholders and also appointed a firm of specialist professional advisers to conduct a due diligence exercise on both Devon and also on a proposed new Alternative Investment Fund Manager ("AIFM") for the Company, FundRock Management Company ("FundRock"). Under the proposed new fund management arrangements FundRock would act as the AIFM and Devon as the delegated investment manager to the Company. It is intended that these appointments will take effect, subject to satisfactory completion of the due diligence exercise noted above, regulatory approval and signing of contracts, from a date in November 2019.
FundRock is a leading independent UCITS Management Company and AIFM, offering solutions for UK, Luxembourg and Ireland based funds. They manage over 500 funds with assets under management of more than £80 billion. The team who would be responsible for acting as AIFM to the Company are based in London.
The Board is pleased to announce that, conditional on the appointment of FundRock and Devon becoming effective, it has reached an agreement with Jupiter regarding the termination of the existing management arrangements. In the event that FundRock and Devon are not appointed by the Company it is likely that the Company would engage with Jupiter and negotiate fees to be paid thereafter. Under the terms of the existing management arrangements, Jupiter is entitled to a quarterly base management fee of 0.1875 per cent (equivalent to 0.75 per cent per annum) of the total assets of the Company (including drawn down borrowings under the Company's loan facilities) plus an annual performance fee equal to 15 per cent of the outperformance of the benchmark, the FTSE World Europe ex UK Total Return Index (subject to a high water mark and an annual cap). Under the early termination arrangements agreed with Jupiter, the base management fee will continue to accrue and be payable to Jupiter after termination but only up until 31 May 2020. It has also been agreed that Jupiter will waive any entitlement to a performance fee from the termination date.
Under the proposed new management arrangements, Devon and FundRock will be paid aggregate management fees of 0.90 per cent per annum of net assets (i.e. excluding drawn down borrowings under the Company's loan facilities) up to £1 billion and 0.80 per cent per annum on any net assets over this amount. No performance fee will be payable. These new fee arrangements will commence with effect from 1 June 2020.
In the period from the date of their appointment up to and including 31 May 2020, in addition to the quarterly management fee continuing to be paid to Jupiter, the Board has agreed to pay a fee of 0.03 per cent per annum of net assets to Fundrock with effect from its appointment as AIFM and also a base management fee of 0.10 per cent per annum of net assets to Devon with effect from the date of its appointment up until 31 May 2020. Neither Devon nor Fundrock will be entitled to receive a performance fee during this period. From 1 June 2020, the fee due to Jupiter will cease and the management fee due to Devon will be as set out above (with FundRock's fee being deducted from amounts due to Devon).
There will be no change in the Company's depositary, custodian, administrator, fund accounting or registrar arrangements.
There will be no change in the Company's investment objective or policy under its new management arrangements. It is anticipated by the Board that there will be no break in the availability of Mr Darwall to manage the Company's investment portfolio in his transition from employment by Jupiter Asset Management Limited to Devon.
The Board would like to take this opportunity to thank the team at Jupiter Asset Management Limited who have supported the Company throughout the past nineteen years and for their ongoing assistance in facilitating the orderly transition of our management arrangements to Devon.
The Board believes that the appointment of FundRock and Devon is supported by shareholders based on consultation undertaken and the feedback provided to the Company to date. In particular, the Board believes that these new fee arrangements, and specifically the removal of the performance fee entitlement, will over time result in a material cost saving to shareholders.
Further information will be announced in due course.
Enquiries
Cenkos Securities PLC
Will Rogers 020 7397 1920
Will Talkington 020 7397 1910
Andrew Worne 020 7397 1912