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Activist shareholder forces concessions from JP Morgan trust

Activist shareholder forces concessions from JP Morgan trust

The JP Morgan Indian Investment Trust has made a number of concessions to shareholders as an activist investor has built a large stake in the fund.

The trust’s board has confirmed that ‘following consultation with the company’s large shareholders and its advisers’ it will cut its fees from 1.2% to 1%, reduce the manager’s notice period from 12 to six months for termination due to underperformance, and institute a regular buyback offer.

The changes will come into effect if the trust survives a continuation vote on 30 January 2014.

In recent months the City of London Investment Group has accumulated a 14% position in the trust, having owned less than 5% in June. In February the group attempted to wind up the Advance Developing Markets trust.

‘When City of London has a significant stake, it is fairly standard for it to look for regular tenders,’ observed Charles Cade, head of investment companies research at Numis Securities. ‘Where it owns 15% the board will typically listen to it, although generally it happens more behind the scenes.’

The JP Morgan Indian Investment Trust lost 5.4% in share price terms and 1.8% of its net asset value through the year to the end of October, during which time its benchmark MSCI India index gained 0.9%. Managed by the Citywire AA-rated pair of Rajendra Nair (pictured) and Rukhshad Shroff, the £425 million trust trades on a discount of 15%.

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Rajendra Nair
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19/19 in Equity - India (Performance over 1 year) Average Total Return: 38.46%
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18/19 in Equity - India (Performance over 1 year) Average Total Return: 38.46%
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