Shareholders urged to vote in Scottish battle over trust

The Herald Scotland

a day ago

It has also recommended that investors should vote for the resolutions to reappoint the existing directors, ahead of crunch meetings which will determine the future path for the fund.
Mr Jourdan and other shareholders have requisitioned a general meeting of Maven Renovar VCT, which will be held on August 13. They have put forward resolutions seeking to remove the board of the trust and appoint four replacement directors, including Mr Jourdan, in their place.
The management contract for the venture capital trust, formerly known as Amati AIM VCT, was moved by the board from Amati to Glasgow-based private equity house Maven Capital Partners with effect from May.
The board then faced shareholder opposition at the trust's annual meeting on June 19.
Bill Nixon, managing partner of Maven, declared the private equity house had 'a proven track record to turning round a VCT in a near-identical situation'.
He told The Herald: 'It is clear that the last time there was a disproportionately small number of shareholders - about 100 - voted against the board at the AGM which arguably created a distorted outcome relative to the [total] number of shareholders.
'All we would say is whatever way you vote, get out and vote.'
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Mr Nixon observed that the Bluehone AIM VCT2 fund had delivered an 84% total return and its total net asset value had 'grown 3.6 times' since its management was taken on by Maven in 2011.
He said: 'It has got very similar parallels to the Amati fund [now Maven Renovar VCT]. It was an AIM VCT which had lost a lot of value and we materially turned it around.'
Mr Nixon added: 'I would like to emphasise we have done this before. We have done this turnaround. We understand that when managers are terminated they don't like it, but I am afraid that is just business.
'We have a much larger resource. We have the capability. We have 11 offices across the UK to execute on this recovery plan.'
Mr Jourdan told The Herald: 'There are a significant group of shareholders who were upset at what happened and they want a capital return strategy.
'This is not about me. It is not about trying to get the contract back. It is just about what is the best strategy to pursue from here for the shareholders.'
He highlighted his view that the situation 'shouldn't have got as heated as it has'.
Flagging the key point of difference from his perspective, he noted the board wanted to let Maven do more unquoted investments for the VCT whereas his group of investors believed shareholders would be better off having capital returned.
Mr Nixon said: 'The most important thing is people vote. Shareholder democracy will prevail. Rather than leave the decision to a small group of shareholders, it is important as many shareholders as possible vote.
'We believe that the best approach is to adopt the plan which the experienced board have concluded is best for the company, and where we have a proven track record to turning round a VCT in a near-identical situation.'
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Claiming the alternative was 'going with a new...board who have a strategy to progressively wind down the company', he declared: 'There is common acceptance in the risk asset space it is better to have large, vibrant portfolios than wind down a VCT which has a significant fixed cost base.
'What this should really be about is performance and capability.'
In a response to a circular issued on July 21 by the directors of Maven Renovar VCT, Mr Jourdan, Charles McMicking, Kathleen McLeay and Hector Kilpatrick, the four proposed replacement directors, say: 'At its heart, the question being asked of shareholders is whether they wish the VCT to continue to make new qualifying investments, which involve substantial risks, where these will be mostly in private companies, despite not having any requirement to do this under the VCT legislation; or whether they would prefer to have all surplus capital returned, whilst maximising shareholder value by keeping exposure to the best companies in the existing portfolio, potentially for many years.
'The requisitioning shareholders are proposing the latter and have proposed a new board of directors to implement this strategy. It's that simple.'
Mr Nixon said: 'We are encouraging shareholders to vote. Whatever way people vote, the most important thing is they vote and they decide what strategy they want to adopt, and what board they want to run or determine the future strategy for this VCT.'
He added: 'To give the company the best prospects of restoration in shareholder value, we think a broader investment policy would be helpful. This is not a policy that is going from AIM to private equity. It is a policy that is going from AIM to AIM and private equity.
'Shareholder democracy will prevail. They will have a choice to appoint the existing experienced board or the choice to appoint a new board including the former investment manager.'