Following the announcement in February that Close Venture Management had taken over the management of the Murray VCT portfolio, the board of Murray VCT4 has decided to stay with Murray Johnstone. The failed management buyout of part of the Aberdeen Group’s private equity and investment business by its senior executives, which was abruptly terminated at the end of September 2004, caused each of the Murray VCT boards (as they are in any event required to do) to review Murray Johnstone’s performance and to consider, as they should, alternatives available from other service providers.
In March this year the boards of all four Murray Johnstone VCTs (Murray VCT, Murray VCT 2, Murray VCT 3, and Murray VCT 4) decided they were going to look for a new manager and Close Venture Management was to take over, but the board of VCT 4 has now decided against this decision. Murray VCT 4 has entered into a new management and administration deed with Murray Johnstone, which confirms Murray Johnstone’s continuing appointment for the portfolio management of the fund. The notice of termination served on Murray Johnstone, which was to expire on August 8, 2005, has now been withdrawn.
Key features of the new management and administration deed with Murray Johnstone include the new management and administration deed, which operates for an initial period to August 31, 2006 and is thereafter able to be terminated by three months’ notice given by either the fund or Murray Johnstone. The fund will pay to Murray Johnstone a performance-related fee, which is subject to a minimum amount being payable (the minimum amount is based on a gross assets test or a net assets test.) Murray Johnstone is also entitled to receive an annual administrative and secretarial fee of £50,000 per annum.
Meanwhile the three Murray VCTs which have broken away from Murray Johnstone are the subject of a campaign to remove the directors of the funds at their next AGM (July for Murray VCT2 and Murray VCT3 and December for Murray VCT). Former money manager and executive director of Panmure Gordon Investments, Charles Clark, a shareholder in the three VCTs, is asking for support from shareholders in each of the three VCTs to remove these directors. Reasons for the campaign he cites are nine years of poor performance; a decrease in net asset value of the trusts with 45% to 65% of capital lost across the three trusts; a failed management buyout of the trusts; and a cost in directors’ fees of over £50,000 per year per trust. Taylor has proposed five candidates to take the place of the current directors.