Pre-Annual General Meeting Information • Dec 20, 2022
Pre-Annual General Meeting Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you should immediately consult your stockbroker, bank manager, solicitor, accountant or other appropriately qualified independent financial adviser, authorised under the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom, or another appropriately authorised independent financial adviser if you are in a territory outside of the United Kingdom.
If you have sold, transferred or otherwise disposed of all of your Shares in Majedie Investments PLC (the "Company") you should pass this document but not any personalised form of proxy (the "Form of Proxy") as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale, transfer or disposal was effected for transmission to the purchaser or transferee. If you have sold, transferred or otherwise disposed of only part of your holding of Shares in the Company, you should retain this document and the accompanying Form of Proxy and consult the stockbroker, bank or other agent through whom you effected the sale, transfer or disposal.
(Incorporated in England & Wales with registered number 00109305 and registered as an investment company within the meaning of section 833 of the Companies Act 2006)
Recommended proposals for the appointment of a new investment manager and adoption of a new investment objective and policy
and
Notice of General Meeting
Notice of a general meeting of the Company to be held at the City of London Club, 19 Old Broad Street, London EC2N 1DS on 25 January 2023 at 11.45 a.m. (the "General Meeting") is set out at the end of this document.
Shareholders who wish to vote on the Resolution to be considered at the General Meeting are encouraged to submit the Form of Proxy accompanying this document in advance of the General Meeting. To be valid, the Form of Proxy must be completed, signed and returned in accordance with the instructions printed thereon so as to be received by the Company's registrar, Computershare Investor Services PLC (the "Registrar") at The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible and, in any event, by no later than 11.45 a.m. on 23 January 2023.
Alternatively, you may submit your proxy electronically by using the following link and the details provided on the Form of Proxy: www.investorcentre.co.uk/eproxy. Proxies submitted electronically must be transmitted so as to be received by the Registrar by no later than 11.45 a.m. on 23 January 2023. If you hold your Shares in uncertificated form (that is, in CREST) you may vote using the CREST electronic voting service in accordance with the procedures set out in the CREST Manual (please also refer to the accompanying notes to the Notice of General Meeting set out at the end of this document). Proxies submitted via CREST for the General Meeting must be transmitted so as to be received by the Registrar as soon as possible and, in any event, by no later than 11.45 a.m. on 23 January 2023.
This document should be read as a whole. Nevertheless, your attention is drawn, in particular, to the letter from the Chairman of the Company which is set out on pages 3 to 7 of this document and which recommends that you vote in favour of the Resolution to be proposed at the General Meeting.
Publication of this document and Notice of General Meeting 20 December 2022 Latest time and date for receipt of Forms of Proxy from Shareholders 11.45 a.m. on 23 January 2023 General Meeting 11.45 a.m. on 25 January 2023 Results of General Meeting announced 25 January 2023 Notes
References to times in this document are to London times.
The above times and/or dates may be subject to change and, in the event of such change, the revised times and/or dates will be notified to Shareholders by an announcement made by the Company through a Regulatory Information Service.
(Incorporated in England & Wales with registered number 00109305 and registered as an investment company within the meaning of section 833 of the Companies Act 2006)
Directors
Christopher Getley (Chairman) William Barlow Richard Killingbeck Jane Lewis Mark Little
Registered Office
1 Kings Arms Yard London EC2R 7AF
20 December 2022
Dear Shareholder,
On 10 November 2022, the Board announced that, following an extensive review of the Company's investment management arrangements, the Company had entered into a conditional agreement to appoint Marylebone Partners LLP ("Marylebone Partners") as the Company's investment manager. The Board further announced that, in connection with the proposed appointment of Marylebone Partners and subject to Shareholder approval, the Board was proposing to amend the Company's investment objective and policy to follow a liquid endowment investment strategy.
The purpose of this document is to set out further detail on the New Investment Objective and Policy and the proposed appointment of Marylebone Partners (the "Proposals"), and to convene a general meeting of the Company (the "General Meeting") at which Shareholders will be asked to approve the New Investment Objective and Policy.
The General Meeting will be held at the City of London Club, 19 Old Broad Street, London EC2N 1DS on 25 January 2023 at 11.45 a.m. The Resolution to be considered and voted upon at the General Meeting is set out in the Notice of General Meeting on pages 14 to 15 (inclusive) of this document.
Majedie Investments PLC was originally founded as an endowment to provide both income and capital growth over the long-term by adopting a broad approach to asset allocation. The Company's culture has remained consistent with this aim, its most successful investment being the seed investment in Majedie Asset Management ("MAM") in 2003 which at its peak in 2017 represented 28 per cent. of the Company's portfolio. The Company's investment performance in recent years has been more challenging and, as a result, the Shares have traded at a substantial discount to the Company's investment company peers. Following the sale of MAM in 2022 to Liontrust Asset Management PLC ("Liontrust") the Company's assets, being a broad selection of global equities, are no longer fulfilling the Company's endowment purpose. The Board therefore considered the strategy of the Company with the three key objectives being development of the Company's culture, improved performance and a reduction in the discount.
In the Company's interim report for the six months ended 31 March 2022, following the sale of MAM to Liontrust, the Board noted that it was considering the Company's investment objective along with the range of assets that should be considered for inclusion in the Company's portfolio and its own responsibilities for portfolio allocation. The Board conducted an extensive review of the Company's management arrangements which concluded with the Company entering into a conditional agreement to appoint Marylebone Partners as the Company's investment manager.
Founded in 2013, Marylebone Partners is an independent firm, managing approximately US\$ 400 million (as at 1 December 2022) for professional and institutional clients who include charities, foundations, family offices, high-net worth individuals and trusts. The Board believes that Marylebone Partners' long-term, fundamental approach, with equities at its heart, is aligned with the Company's ethos. The Board believes that the proposition offered by Marylebone Partners can deliver strong investment outcomes and bring a new and relevant proposition to the investment trust sector, whilst developing the Company's culture and history.
Marylebone Partners' investment approach includes three core strategies, comprising Special Investments, allocations to specialist funds managed by third parties and a focused portfolio of listed equities. Marylebone Partners sources investments through a global network, which its principals have built over nearly three decades at industry leading firms. The Board believes it will be increasingly important to identify differentiated sources of performance from the large and growing set of less researched opportunities that are available within this wider investment mandate, in addition to those in the major asset classes.
In conjunction with the appointment of Marylebone Partners, the Company intends, subject to Shareholder approval, to amend its investment objective and policy to pursue a high-conviction, long-term approach that is unconstrained by geographic limitations or any formal benchmark.
Assuming the appointment of Marylebone Partners becomes effective, the Company will be admitted as a member of Marylebone Partners, with an entitlement to 7.5 per cent. of residual profits and capital granted to the Company for no consideration.
The Company's current investment objective is to maximise total Shareholder return whilst increasing dividends by more than the rate of inflation over the long-term. The Company has sought to achieve this objective through investing principally in securities of publicly quoted companies worldwide and in funds managed by its investment manager.
However, the Board believes a move to a 'liquid endowment' investment strategy offers a more attractive investment opportunity for Shareholders. Accordingly, it is proposed that, subject to Shareholder approval, the Company's investment objective and policy be changed to delivering long-term capital growth whilst preserving Shareholders' capital and to pay a regular dividend.
Under the New Investment Objective and Policy, the Company will target annualised total returns (net of fees and expenses, in GBP) of at least 4 per cent. above the UK Consumer Price Index, measured over rolling five-year periods. The target total return will include an annual dividend, paid quarterly. Each quarterly dividend payment is initially expected to comprise approximately 0.75 per cent. of the relevant quarter-end Net Asset Value per Share, leading to an aggregate annual dividend of approximately 3 per cent. of Net Asset Value.
The full text of both the Company's existing investment objective and policy and the New Investment Objective and Policy are set out in Part 2 of this document.
The Listing Rules require any proposed material changes to the Company's published investment policy to be submitted to the FCA for prior approval; the FCA has approved the New Investment Objective and Policy. The Listing Rules also require Shareholder approval prior to any material changes being made to the Company's published investment policy; this approval will be sought at the General Meeting. Any future material changes to the New Investment Objective and Policy will also require the prior approval of the FCA and Shareholders.
It is intended that, following the appointment of Marylebone Partners and the completion of the portfolio's transition to the New Investment Objective and Policy, the Company will join the AIC Flexible Investment sub-sector.
As noted above, following an extensive review of the Company's investment management arrangements, the Company has entered into a conditional agreement to appoint Marylebone Partners as the Company's investment manager. For the avoidance of doubt, the appointment of MAM as the Company's investment manager will terminate with effect from Marylebone Partners' appointment as portfolio manager. The Company's status as an internally managed AIF is expected to continue until this role is also transitioned to Marylebone Partners in Q2 2023.
The appointment of Marylebone Partners as the Company's investment manager is conditional upon Shareholders voting in favour of the Resolution to adopt the New Investment Objective and Policy at the General Meeting. In addition, Marylebone Partners requires certain operational transition steps to have been completed prior to its appointment taking effect. It is therefore expected that, subject to these conditions being met, Marylebone Partners' appointment as investment manager will take effect from 11.59 p.m. on 25 January 2023 and its appointment as AIFM is expected to take place in Q2 2023.
Marylebone Partners will receive an annual management fee of 0.90 per cent. of the market capitalisation of the Company up to £150 million; 0.75 per cent. of market capitalisation between £150 and £250 million; and 0.65 per cent. of market capitalisation above £250 million. The market capitalisation for the calculation of this fee shall be subject to a cap of a 5 per cent. premium to Net Asset Value.
As a contribution to the costs of the Proposals, Marylebone Partners will waive one half of the management fee payable by the Company for a period of 12 months from Marylebone Partners' appointment as investment manager and make a significant contribution to the cost of marketing the Company.
In addition, the Company will become a member of Marylebone Partners, entitling it to 7.5 per cent. of residual profits and capital and this is to be granted to the Company for no consideration.
Following an initial term of two years, the investment management agreement between the Company and Marylebone Partners will be terminable by either party serving six months' notice.
Public equities lie at the heart of the Marylebone Partners approach because they represent an investment in human progress and ingenuity. In addition to the benefits of capturing long-term 'equity risk premium', Marylebone Partners seeks to add further value through security selection and by biasing portfolios towards the styles, industries, regions, and factors that Marylebone Partners believes should outperform over time. Marylebone Partners believes in the power of a portfolio that combines three differentiated investment strategies. If appointed as the Company's investment manager, Marylebone Partners will build a bespoke portfolio for the Company, which will combine the three core strategies that have driven returns for Marylebone Partners' flagship open-ended strategy since inception in 2013. These are as follows:
Marylebone Partners has designed a repeatable investment process to identify differentiated opportunities, then monitor and manage risks at both an investment and portfolio level. All such work is documented and saved in a searchable, customised database which reflects Marylebone Partners' beliefs about what drives outcomes. A series of proprietary systems and reports support the process and decision-making.
Marylebone Partners identifies new ideas through established channels, the precise nature of which differ somewhat to reflect the category of investment.
For Special Investments, Marylebone Partners taps into an extensive network built over three decades.
For External Managers, Marylebone Partners sources ideas through many of the same channels and performs quantitative screens for the attributes and characteristics it seeks.
For Direct Investments, the process begins by defining the investible universe, following which Marylebone Partners performs screens for the qualities it believes drive long-term outperformance.
Marylebone Partners performs in-house fundamental research, which is informed by external sources. The work focuses on identifying (a) the key variables that will determine the success of a thesis, (b) the risks to the thesis and how to quantify and monitor them, and (c) the impact that any investment would have on the broader portfolio and how this might affect position sizing and exposures.
Risk Management and Risk Monitoring are distinct, yet inter-related, functions. The risk framework is designed to limit the likelihood of permanent loss, whilst leaving upside potential largely unconstrained. When considering Risk, Marylebone Partners distinguishes between any threats that are intrinsic to the investments ("Internal Risks") and others that are exogenous ("External Risks").
Marylebone Partners' principals have previously held senior positions at industry-leading firms and have prior experience of managing investment companies. As set out below, Marylebone Partners' Investment Committee comprises its three senior investment professionals and three experienced non-executive partners.
Dan Higgins: Dan was formerly Chief Investment Officer of Fauchier Partners LLP, a multi-billion AUM alternatives firm with a reputation for uncorrelated returns and capital preservation in difficult markets. At Fauchier Partners, he gained extensive experience of the closedended fund structure through the firm's flagship listed vehicle, The Absolute Return Trust Limited. Previously, Dan was a Senior Fund Manager at Mercury Asset Management plc, where he ran equity portfolios for large pension-fund clients. He holds a degree in Philosophy, Politics and Economics from Magdalen College, University of Oxford.
Olivia Macdonald: Olivia joined Marylebone Partners in 2017 from The Wellcome Trust's investment team, where she focused on private and public direct investments. Prior to this, she worked for Goldman Sachs in both sell-side equities research and in their asset management division. Olivia holds a degree in Philosophy, Politics and Economics from New College, University of Oxford, and is a CFA charter holder.
Robert Elliott: Robert joined Marylebone Partners in 2014. Previously, at THM Partners, he advised companies on operational and financial restructurings. Prior to this, he was a lawyer working on corporate finance and M&A transactions for Jones Day. Robert holds a degree in Law from the University of Nottingham, a Masters in Finance from the London Business School and a corporate finance qualification from the Institute of Chartered Accountants (England & Wales).
Stuart Roden (non-executive): Stuart has chaired Marylebone Partners' Investment Committee since inception in 2013. Until January 2019 he was Chairman of Lansdowne Partners, having previously co-managed the firm's Developed Markets funds. He began his career at SG Warburg & Co, McKinsey & Company and Mercury Asset Management plc. He is non-executive Chairman of Hetz Ventures and non-executive Chairman of Tresidor Investment Management. Stuart received a first-class honours degree in Economics (BSc) from the London School of Economics.
Marc Jonas (non-executive): Marc is a co-founder of Sun Capital Partners and has extensive experience as an investor in the Leisure, Financial Services and Real Estate sectors. He served as Chairman of Pearl Group's Asset/Liabilities Investment Management Committee and co-founded Wellington Pub Company in 1997 (where he was Managing Director) and Punch Group in 1997, serving as a nonexecutive director until 2004. Mr. Jonas is a director of Carnegie Capital Estates and holds several other directorships. He holds a degree in Philosophy, Politics and Economics from Christ Church, University of Oxford.
David Haysey (non-executive): David was formerly Head of Marylebone Partners' public equities investments and has held senior positions at prior firms including as head of European equities for SG Warburg plc and Deutsche Bank AG and CIO and co-CEO of Deutsche Asset Management's European Absolute Return business. Before joining Marylebone Partners, David worked for RIT Capital Partners plc, where he was a board member and head of public equities. He is a non-executive director of Augmentum Fintech plc and an advisory board member of Cluny Capital Limited. He has a degree in Philosophy, Politics and Economics from the University of Oxford.
Conditional on Marylebone Partners being appointed as the Company's investment manager, the Company will be admitted as a member of Marylebone Partners. The Company will hold a 7.5 per cent. equity stake in Marylebone Partners, which will entitle it to 7.5 per cent. of (i) the annual income profits (after payment of priority and discretionary profit shares to executive partners), (ii) voting rights and (iii) any capital profit. The equity stake will be subject to customary leaver provisions in the event that the investment management agreement between Marylebone Partners and the Company is terminated. These provisions will entitle Marylebone Partners to cancel the stake for nil consideration if the agreement is terminated within two and a half years of commencement or thereafter to buy back the stake for a cash payment based on the recent financial performance and assets under management of Marylebone Partners (excluding the value of the investment management agreement with the Company). The Company will be entitled to such other rights (including information rights) as are customary for a minority institutional investor.
The Board believes the change in investment manager and the adoption of the New Investment Objective and Policy will provide the following benefits to Shareholders:
After taking account of the estimated reduction in management fees offered by Marylebone Partners following its appointment, the net cost of implementing the Proposals is estimated to be approximately £25,000. This figure includes the costs associated with the Company's investment in Marylebone Partners.
If the Proposals are approved by Shareholders, following the appointment of Marylebone Partners it is proposed that the Company will pay an annual dividend made up of four quarterly payments. Each quarterly dividend payment is initially expected to comprise approximately 0.75 per cent. of the relevant quarter-end Net Asset Value per Share, leading to an aggregate annual dividend target of approximately 3 per cent. of Net Asset Value.
The Company has significant revenue reserves and the ability to pay dividends out of capital. Given the proposed investment strategy's focus on capital growth, it is expected that initially revenue reserves will be utilised to supplement the Company's portfolio revenues in order to pay the target annual dividend. Once the Company's substantial revenue reserves have been exhausted, the Company would then utilise its ability to pay dividends out of realised capital profits to supplement portfolio revenues in order to pay the target annual dividend.
The Company has an outstanding debenture issue of £20.7 million, due for repayment in 2025. Currently, it is expected that this will remain in place until maturity. If appointed, Marylebone Partners and the Board will maintain an active dialogue to ensure that gearing is being appropriately and efficiently used.
The Board is cognisant of the consistent discount at which the Company's Shares have recently traded in relation to their underlying Net Asset Value. The Board believes that the appointment of Marylebone Partners will help narrow this discount in time. It is the Board's aim to see the Shares trade in line with, or at a premium to, their underlying Net Asset Value and in turn grow the Company through future equity issuance. The Board is confident that growing the Company will benefit all Shareholders through reducing costs and enhancing liquidity. Following the announcement of the Proposals on 10 November 2022, there was a positive share price reaction and the Board notes that several new investors have joined the Company's register since then.
The adoption of the New Investment Objective and Policy is subject to Shareholder approval. A notice convening the General Meeting which is to be held at the City of London Club, 19 Old Broad Street, London EC2N 1DS on 25 January 2023 at 11.45 a.m. is set out at the end of this document. The Resolution will, if passed, result in the adoption of the New Investment Objective and Policy as set out in Part 2 of this document, with effect from the appointment of Marylebone Partners as the Company's investment manager. The Resolution will be proposed as an ordinary resolution and will require the approval of Shareholders representing a simple majority of the votes cast at the General Meeting.
If the Resolution is not passed, the Company will continue to be managed under its existing investment objective and policy, Marylebone Partners will not be appointed as the Company's investment manager and the Directors will reassess the options for the future of the Company.
All Shareholders are encouraged to vote in favour of the Resolution and if your Shares are not held directly, you are encouraged to arrange for your nominee to vote on your behalf.
Shareholders are requested to complete and return proxy appointments to the Registrar by one of the following means:
In each case, the proxy appointment must be returned so as to be received by the Registrar by no later than 11.45 a.m. on 23 January 2023. Completion and return of a proxy appointment will not prevent Shareholders from attending and voting in person at the General Meeting, should they so wish.
The Board considers that the Proposals and the Resolution are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution.
The Directors intend to vote in favour, or procure votes in favour, of the Resolution in respect of their own beneficial holdings of Shares, which in aggregate amount to 483,933 Shares (representing 0.9 per cent. of the issued Share capital of the Company as at the date of this document).
Yours faithfully
Chairman
The full text of the Company's current investment objective and policy and proposed new investment objective and policy are set out below:
The Company's investment objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long-term.
General
The Company invests principally in securities of publicly quoted companies worldwide and in funds managed by its investment manager, though it may invest in unquoted securities up to levels set periodically by the Board, including its investment in MAM. Investments in unquoted securities, other than those managed by its investment manager or made prior to the date of adoption of this investment policy (measured by reference to the Company's cost of investment), will not exceed 10 per cent. of the Company's gross assets.
Whilst the Company will at all times invest and manage its assets in a manner that is consistent with spreading investment risk, there will be no rigid industry, sector, region or country restrictions. The overall approach is based on an analysis of global economies, sector trends with a focus on companies and sectors judged likely to deliver strong growth over the long-term. The number of investments held, together with the geographic and sector diversity of the portfolio, enable the Company to spread its risks with regard to liquidity, market volatility, currency movements and revenue streams.
The Company will not invest in any holding that would, at the time of investment, represent more than 15 per cent. of the value of its gross assets save that the Company may invest up to 25 per cent. of its gross assets in any single fund managed by its Investment Manager where the Board believes that the investment policy of such funds is consistent with the Company's objective of spreading investment risk.
The Company may utilise derivative instruments including index-linked notes, contracts for difference, covered options and other equity-related derivative instruments for efficient portfolio management and investment purposes.
Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments, as described above.
For the avoidance of doubt, as a listed investment company, if and for so long as required by the Listing Rules in relation to closedended investment companies, the Company will also continue to comply with the following investment and other restrictions:
The assets of the Company will be allocated principally between investments in publicly quoted companies worldwide and in investments intended to provide an absolute return (in each case either directly or through other funds or collective investment schemes managed by the Company's investment manager) and the Company's investment in MAM itself.
The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently. Any investments made into funds managed by the Company's investment manager will be measured against the benchmark or benchmarks, if any, whose constituent investments appear to the Company to correspond most closely to those investments. It is important to note that in all cases investment decisions and portfolio construction are made on an independent basis. The Board however sets various specific portfolio limits for stocks and sectors in order to restrict risk levels from time to time, which remain subject to the investment restrictions set out in this section.
The Company uses gearing currently via a long-term debenture. The Board has the ability to borrow up to 100 per cent. of adjusted capital and reserves. The Board also reviews the level of gearing (borrowings less cash) on an ongoing basis and sets a range at its discretion, as appropriate. The Company's current debenture borrowings are limited by covenant to 66 2/3 per cent., and any additional indebtedness is not to exceed 20 per cent., of adjusted capital and reserves.
The Company's investment objective is both to deliver long-term capital growth whilst preserving shareholders' capital and to pay a regular dividend.
The performance target is to achieve net annualised total returns (in GBP) of at least 4 per cent. above the UK CPI over rolling five-year periods.
The Company's strategy to achieve its investment objective is to create a balanced portfolio of investments that is diversified both across asset classes and by geography. Holdings will be focussed on the following three main segments:
The Company's underlying investments are expected to be primarily in equities and related instruments (which shall include, without limitation, preference shares, convertible debt instruments, equity-related and equity-linked notes and warrants) issued by quoted and unquoted portfolio companies as well as in partnerships, limited liability partnerships, offshore or un-regulated funds and other legal forms of entity where the investment has equity-like return characteristics. The Company may invest in publicly traded companies (including participating in the IPO of an existing unquoted company investment), subject to the investment restrictions below. The Company is not expected to take majority shareholder positions in portfolio companies but shall not be restricted from doing so.
Though the Company's underlying investments are expected to be primarily in equities, the Company may also invest in securities and financial instruments of any kind, including, without limitation, sovereign debt and related options and/or futures and other fixed income instruments issued by sovereign borrowers or their agencies, equity and equity-related securities, bonds and other fixed-income securities, loans, futures, forward contracts, warrants, options, swaps, contracts for difference and other derivative instruments, currencies, commodities, pooled investment vehicles (which may be open-ended or closed-ended and established in any jurisdiction), money-market funds, commercial paper, certificates of deposit and other cash equivalents. Debt securities in which the Company may invest may be of investment-grade, sub-investment-grade, or unrated. In addition, the Company may pursue any of these strategies through privately negotiated investments as well as public market transactions. From time to time, the Company may acquire assets or securities that are illiquid and the fair value of which may not be readily derived from third-party sources.
The Company may use derivatives and similar instruments, whether for the purpose of capturing specific opportunities, to create return asymmetry, mitigate currency exposure or for capital preservation.
The Company may make investments directly or indirectly through special purpose vehicles, intermediate holding vehicles or other fund or similar structures or other vehicles where the Investment Manager considers that that this would be commercially beneficial or confer legal, regulatory or tax advantages, or provide the only practicable means of access to the relevant investment.
The Company will invest and manage its assets with the object of spreading investment risk. It shall not be restricted in the jurisdictions or sectors in which it may invest. However, no more than 10 per cent. of the Company's gross assets may be directly or indirectly (through derivatives or similar instruments) invested in any one investment or issuer, or allocated to a single external third-party manager, as at the time of investment.
When fully invested, the Company will aim to allocate its assets between the three main investment segments within the below strategic ranges:
The Company will not be required to dispose of any investment or rebalance its portfolio as a result of a change in the respective value of any of its investments.
Not more than 10 per cent. of the Company's gross assets at the time an investment is made will be invested in other closed-ended investment funds which are listed on the Official List.
The Board is empowered to borrow up to 100 per cent. of adjusted capital and reserves. The Board reviews the level of gearing (borrowings less cash) on an ongoing basis and sets a range at its discretion, with an upper limit set at 30 per cent. of the Company's gross assets, measured at time of drawdown. Where the Company invests in portfolio companies indirectly (whether through a thirdparty manager, special purpose vehicles as holding entities or otherwise), notwithstanding the previous paragraph, indebtedness in such holding entity will not be included in the calculation of indebtedness of the Company provided that the provider of such debt only has recourse to the assets of the holding entity and does not have recourse to the other assets of the Company or other investments made by the Company.
The Company may hold cash on deposit and may invest in cash equivalent investments, which may include but shall not be limited to, short-term investments in money market funds, gilts, and tradeable debt securities.
There is no restriction on the amount of cash or cash equivalent investments that the Company may hold or where it is held. When fully invested, the Company will hold an appropriate value of the Company's gross assets in cash or cash equivalent investments for the purposes of making follow-on investments and to manage working capital requirements of the Company.
The Company may also use derivative instruments. The Company may, but shall not be required to, hedge currency exposure in its portfolio.
As required by the Listing Rules, any material change to the investment policy of the Company will be made only with the approval of Shareholders.
In the event of any breach of the investment restrictions applicable to the Company, Shareholders will be informed of the remedial actions to be taken by the Company through an RIS announcement.
The Company's business, operations, financial condition and/or results could be materially and adversely affected by the occurrence of any of the risks described below. In such circumstances, the market price of the Shares could decline and investors could lose all or part of their investment. In particular, Shareholders should note that the past performance of the Company or Marylebone Partners should not be used as a guide to the Company's future performance.
Additional risks and uncertainties which were not known to the Board as at the date of this document or that the Board considers as at the date of this document to be immaterial (based on the assumption that the Resolution is passed at the General Meeting) may also materially and adversely affect the Company's business, operations or financial condition or results.
Shareholders should be aware of the following considerations relating to the New Investment Objective and Policy and the Company:
The foregoing factors are not exhaustive and do not purport to be a complete explanation of all risks and significant considerations relating to the New Investment Objective and Policy or the Company. Accordingly, additional risks and uncertainties not currently known to the Board may also have an adverse effect on the Company's business, operations, financial condition and/or results.
Unless the context otherwise requires, the following words and expressions have the following meanings in this document:
| AIFM | an alternative investment fund manager, within the meaning of the EU AIFM Directive or the UK AIFMD Laws (as applicable) |
|---|---|
| Board | the board of Directors of the Company or any duly constituted committee thereof |
| Company | Majedie Investments PLC, a company incorporated in England and Wales with registered number 00109305 |
| CREST | the facilities and procedures for the time being of the relevant system of which Euroclear has been approved as operator pursuant to the CREST Regulations |
| CREST Manual | the compendium of documents entitled CREST Manual issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, CREST Rules, CCSS Operations Manual and the CREST Glossary of Terms |
| CREST Regulations | the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) |
| Directors | the directors of the Company |
| EU AIFM Delegated Regulation |
Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision |
| EU AIFM Directive | Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 |
| Euroclear | Euroclear UK & International Limited, the operator of CREST |
| FCA | the Financial Conduct Authority of the United Kingdom including any replacement or substitute thereof, and any regulatory body or person succeeding, in whole or in part, to the functions thereof |
| Form of Proxy | the form of proxy for use by Shareholders at the General Meeting, which accompanies this document |
| FSMA | the Financial Services and Markets Act 2000, as amended from time to time |
| General Meeting | the general meeting of the Company to be held at the City of London Club, 19 Old Broad Street, London EC2N 1DS on 25 January 2023 at 11.45 a.m., notice of which is set out at the end of this document |
| Listing Rules | the listing rules made by the FCA under Part VI of FSMA |
| MAM | Majedie Asset Management Limited (now Liontrust Portfolio Management Limited following a name change which took effect on 6 April 2022) |
| Marylebone Partners | Marylebone Partners LLP, a limited liability partnership incorporated in England with registered number OC381480 |
| Net Asset Value | the value of the assets of the Company less its liabilities, determined in accordance with the accounting principles adopted by the Company from time to time |
| New Investment Objective and Policy |
the proposed new investment objective and policy of the Company set out in full in Part 2 of this document |
| Notice of General Meeting |
the notice of the General Meeting set out on pages 14 to 15 of this document |
|---|---|
| Proposals | the proposals to appoint Marylebone Partners as the Company's new investment manager and AIFM and to adopt the New Investment Objective and Policy, details of which are set out in this document |
| Registrar | Computershare Investor Services PLC |
| Regulatory Information Service or RIS |
a service authorised by the FCA to release regulatory announcements to London Stock Exchange plc |
| Resolution | the ordinary resolution to approve the adoption of the New Investment Objective and Policy to the exclusion of all others, to be proposed at the General Meeting |
| Special Investments | a category of investment, as defined by Marylebone Partners, characterised by eclectic situations such as co-investments, thematic ideas or special purpose vehicles. Typically, these investments are somewhat less liquid in profile and have a higher expected return |
| Shareholders | holders of Shares |
| Shares | ordinary shares of 10 pence each in the capital of the Company |
| UK AIFMD Laws | (i) the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773) and any other implementing measure which operated to transpose the EU AIFM Directive into UK law before 31 January 2020 (as amended from time to time including by the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019 (SI 2019/328)); and |
| (ii) the UK versions of the EU AIFM Delegated Regulation and any other delegated regulations in respect of the EU AIFM Directive, each being part of UK law by virtue of the European Union (Withdrawal) Act 2018, as further amended and supplemented from time to time including by the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019 (SI 2019/ 328), the Technical Standards (Alternative Investment Funds Management Directive) (EU Exit) Instrument 2019 (FCA 2019/ 37) and the Exiting the European Union: Specialist Sourcebooks (Amendments) Instrument 2019 (FCA 2019/25) |
(Incorporated in England & Wales with registered number 00109305 and registered as an investment company within the meaning of section 833 of the Companies Act 2006)
Notice is hereby given that a general meeting of Majedie Investments PLC (the "Company") will be held at the City of London Club, 19 Old Broad Street, London EC2N 1DS on 25 January 2023 at 11.45 a.m. to consider and, if thought fit, pass the following resolution, which will be proposed as an ordinary resolution:
THAT the proposed investment objective and investment policy set out in Part 2 of the circular to shareholders of the Company dated 20 December 2022, a copy of which has been produced to the meeting and signed by the chairman for the purpose of identification, be and are hereby adopted as the investment objective and investment policy of the Company to the exclusion of all previous investment objectives and investment policies of the Company with effect from the appointment of Marylebone Partners LLP as the Company's investment manager.
By order of the Board
Company Secretary
Dated: 20 December 2022
Alternatively, Shareholders may cast a vote electronically rather than completing a hard copy Form of Proxy. To do so, Shareholders should go to Computershare's URL: www.investorcentre.co.uk/eproxy where the following details, which can be found on your Form of Proxy or in an email received from Computershare, will be required:
For the electronic proxy to be valid it must be received by Computershare no later than 11.45 a.m. on 23 January 2023.
Registered office: 1 Kings Arms Yard London
EC2R 7AF
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & International Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the Company's registrar, Computershare Investor Services PLC (ID 3RA50), by no later than 11.45 a.m. on 23 January 2023. No such message received through the CREST network after this time will be accepted. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST application host) from which the Company's Registrar is able to retrieve the message by inquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
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