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Investment trust insider on manager change at Temple Bar

Investment Trust Insider on Capital Gearing Trust

Investment trust insider on manager change at Temple Bar – James Carthew: Temple Bar board good value, even if investors want style change

There is a lot resting on the decision of Temple Bar (TMPL) to appoint another value fund manager – RWC Partners – to replace Alastair Mundy. Shareholders in the UK equity income trust are being asked to take the pain of a 25% dividend cut on top of a poor run of share price performance. They will hope RWC’s Nick Purves and Ian Lance can turn things around.

There used to be a perception that boards had a pretty cushy life. Four or five meetings a year and a nice lunch – how were they justifying their fees? The reality is far from that, however. On top of an ever-increasing regulatory burden, anything remotely out of the ordinary within the business of the company can require many additional meetings and hours of scrutiny of dense and lengthy documents, all while knowing that the slightest mistake could have serious legal and perhaps financial repercussions.

Changing the investment manager is one of the more complex jobs that the board of an investment company might face. About five months elapsed between Temple Bar announcing that it had served protective notice on Ninety One and the appointment of RWC.

When I spoke to the chairman Arthur Copple after the announcement last week, he said in some ways the process had begun well before Mundy’s departure on ill health pushed the board to serve notice on his employer. In the face of the trust’s extended period of poor performance, he had met shareholders late last year and early this to canvass their views.

The trust had a fairly stark choice between…   read more here