Jupiter to close Buxton's UK Growth trust as market cap plummets
Market cap falls to £26m
The board of the Jupiter UK Growth trust has opted to liquidate the vehicle as a result of a substantial decline in its total market capitalisation, following a period of sustained poor performance.
Richard Buxton was handed management duties of the trust in June, with the announcement coming in February following a period of poor performance under Steve Davies, who has now left Jupiter to pursue other opportunities.
The trust is currently trading on a 12% discount to its net asset value of £198m, according to Association of Investment Companies data, with its share price having fallen by around 40% since the start of 2020.
Jupiter said in March it "would keep the management arrangements under review over the coming months while the economic and market backdrop evolves and to remain cognisant of the reduced market capitalisation".
At £26m, the board said the trust's market cap was now "very low", "materially smaller" than £47.5m when Buxton was appointed manager, and "well below the minimum size generally considered investable by wealth managers and other prospective investor".
The board also noted that "while the stockmarket has recovered some of its losses", which reached their peak in March in response the first wave of the coronavirus pandemic, "the economic outlook remains uncertain".
As a result, the board decided "that it is no longer likely to be able to grow the trust in its present form by attracting significant new investors", and it would therefore liquidate the company "so that shareholders will have the option to receive cash or, if possible, the ability to roll over their investment into another investment vehicle".
The board said it is currently discussing these options with its advisors and "establishing the interest of investment managers in offering rollover options", and encouraged shareholders to share opinion on the future of the trust.
It added that it will aim to update shareholders shortly, and would do so no later than the trust's November AGM.
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