The company intends to invest the majority of its capital in a concentrated portfolio of between 10 to 15 smaller UK/European publicly traded companies typically with market capitalisations of less than GBP 250m and would typically expect a holding period of 3 to 5 years. It may also invest in interests in privately held companies, primarily in equity/equity-related instruments and also in preferred equity, convertible/non-convertible debt instruments. The company will seek to acquire influential block stakes (typically between 10% and 25%) for cash or share consideration. The company invests in assets that will typically have a number of the following characteristics: investments that can generate a 15% IRR over the medium to long term principally through capital appreciation and investments where the manager believes there are value creation opportunities through strategic, management or operational changes.
Manager receives a management fee equal to 1.5% of the NAV. In addition, the Company will pay the Manager a performance fee at a rate of 15% of the amount by which the NAV per share exceeds the High Watermark. Agreement is terminable on 12 months notice in writing by either party.
The initial intention is to distribute up to 50% of profits on realisations through dividends, share buybacks or other returns of capital. Any material change to the new investing policy by the company will require prior shareholder approval in accordance with the AIM Rules.