The board of the Temple Bar Investment Trust has chosen RWC Asset Management to take over the fund's management following an “exhaustive” review.
In an update to the stock exchange this morning (September 23), the board said it hoped RWC would “reinvigorate the trust” and return it to its former position as “one of the leaders” in the UK equities market.
The trust will be managed by the long-term partnership of Nick Purves and Ian Lance, each of whom has around 30 years investment experience.
They employ a long-term, value-oriented approach and have a 20-year fund total return of 234 per cent compared to 122 per cent for the FTSE All Share.
Arthur Copple, chairman of Temple Bar, said: “Up until recently Temple Bar had a long history of providing attractive investment returns.
“In selecting RWC as investment manager we aim to reinvigorate the trust and return it to its former position as one of the market leaders in the sector.”
Temple Bar’s board announced in April it was reviewing the management of the trust after Alastair Mundy, the trust’s long-term manager and head of value at Ninety One, took a leave of absence for health reasons.
The trust had also experienced “disappointing performance” in recent years. It has lost 45 per cent in share price terms over the past year, compared to a sector average loss of 19 per cent in the AIC UK Equity Income sector.
Over five years, it has lost 24 per cent while the sector saw a positive return of 2 per cent.
The trust follows a value strategy, which tends to do well when the economy is growing and inflation and interest rates are rising, but this has been out of favour for the past decade.
Despite this the board said it was “not a time in the cycle of returns to abandon this value style bias”.
It added shareholders would benefit from “exposure to UK equities which are trading at their greatest discount to world equities for 50 years and in particular to UK value stocks which are trading at their greatest ever discount to growth stocks”.
Management fees will remain at 0.35 per cent of total assets.
Dan Mannix, RWC's chief executive, said it was a “real privilege” to be appointed as only the third manager of Temple Bar in its 94-year history.
He added: “Our appointment comes at an interesting moment as investors consider whether there will be a change of leadership in equity markets, and where to allocate capital in a world of low interest rates and high valuations.
“We are honoured to now have the opportunity to start building a track record with Temple Bar, at what feels like a very exciting juncture in the world of true value investing.”
The trust also announced it was recommending a total dividend for the current year of 38.5 pence per share and the final dividend to be 8.25 pence per share — a cut of 25 per cent.
However, the board said it would be possible to “renew dividend growth” going forward.
imogen.tew@ft.com
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