BlackRock Throgmorton trust halves management fee

BlackRock Throgmorton trust halves management fee

The board of the BlackRock Throgmorton Investment trust have announced a halving of the annual management fee to 0.35 per cent.

The new base management fee, down from 0.7 per cent, will be effective from 1 August 2017.

However the performance fee for the trust will increase from 10 to 15 per cent of any net asset value total return outperformance over the benchmark, measured on a two-year rolling basis. This will be applied on the average level of gross assets over two years.

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The BlackRock Throgmorton Investment trust, which has asset of £311m, takes both ‘long’ positions, that is, seeks to profit from shares going up in value, and ‘short’ positions, seeking to profit from shares falling.

The ‘long’ part of the portfolio is managed by Mike Prentis, who also runs the BlackRock UK Smaller Companies Investment trust. Another of the co-managers is investment veteran Richard Plackett, who runs the BlackRock UK Special Situations fund.

Of the changes to the performance fee, the company’s statement to the market said: "The previous cap on the performance fee of 1 per cent of average gross assets over a one year period has been replaced with a cap of 0.9 per cent of average gross assets over a two year period.

"The new performance fee will be effective 1 December 2017 to coincide with the start of the new financial year of the Company.

"These arrangements will be reflected in the Investment Management Agreement between the Company and the manager as a cap of 1.25 per cent of average gross assets over a two year period which will apply on the total base and performance fee payable from 1 December 2017."

The trust sits in the AIC UK Smaller companies sector. It has returned 66 per cent over the past three years, compared with 51 per cent for the sector average in the sector over the same time period.

In the same statement the trust announced that it will now permit the managers to invest up to a maximum of 35 per cent of the assets of the trust into shares listed on the Alternative Investment Market (AIM), the permitted level of exposure to AIM had previously been 25 per cent.