The embattled Schroder UK Growth investment trust has taken a hit as its second-largest shareholder Rathbones has slashed its stake.
The £278.8m trust has lost two star managers in as many years, after Richard Buxton left Schroders to join Old Mutual Global Investors and then Julie Dean quit the firm.
The trust’s board recently awarded management of the trust to Schroders’ Philip Matthews, in a sign of faith in the City-based asset manager.
But Rathbones’ head of multi asset David Coombs has disposed a 3.7 per cent position in the trust from his Strategic Growth portfolio and has halved the holding in his Global Alpha fund.
He explained: “Matthews is dependable, but benchmark aware. Buxton and Dean were both punchy managers and we aren’t convinced by Matthews’ strategy.
“Plus both Buxton and Dean had a following in the retail market and that helps the discount risk. We are not convinced that with Matthews running the fund the discount will tighten.
“[Selling out] was not personal and it wasn’t an anti-Schroders call, but we think the board should have opted for a bigger retail name.”
A Schroders spokesperson said the trust’s board had been “very impressed by [Philip Matthews’] disciplined investment process” and “recognised the strength and depth of the UK equities investment team that works alongside Philip.”
