Overview

Please bear in mind that all investments involve risk and the value of, and any potential income from, your investment may fluctuate and are not guaranteed.

Rights and Issues Investment Trust PLC (‘the Company’) is a London listed closed ended investment company which invests in a portfolio of primarily UK Small and Mid-cap companies.
Appointment of the Jupiter UK SMID team
The Board announced on 7th June 2022 that Simon Knott will retire as the investment manager of the Company while continuing as a non-executive director of the Company.

Jupiter will be appointed as the Company’s investment manager with effect from 3rd October 2022, with Dan Nickols appointed as lead manager, supported by Matt Cable. Dan and Matt are highly experienced investment managers within Jupiter’s UK Small and Mid-Cap Equity team.

This appointment will not result in a change to the investment objective or investment policy of the Company and does not require shareholder approval.
Key benefits of Jupiter’s appointment
  • UK small and mid-cap equity expertise – Jupiter’s Small and Mid-Cap Equity team comprises ten investment professionals and manages c.£4bn for clients as at 31st August, 2022.
  • Dan Nickols has a long-term investment track record having managed the Jupiter UK Smaller Companies Fund since 1st January 2004.
  • Continuity of investment style:
    • an approach which seeks both capital appreciation as well as generating sufficient income to maintain the existing dividend policy of the Company
    • a plan to retain a significant proportion of the existing holdings and to maintain the Company’s policy of having a low level of investment turnover. This will ensure that the level of transaction costs continues to be low
  • As part of the new arrangements, the Company will pay Jupiter a combined fee in respect of its services as AIFM and investment manager which, together with the operating expenses of the Company, will not exceed 0.80% per annum of net assets. This cap will remain in place for five years from the date Jupiter is appointed.

Investment objective & policy

The Board’s objective is to exceed the benchmark index over the long term whilst managing risk. The benchmark of the Company is the FTSE All Share in Index.

The Company invests in equities with an emphasis on smaller companies. UK smaller companies will normally constitute at least 80% of the investment portfolio. UK smaller companies include both listed securities and those quoted on the Alternative Investment Market (“AIM”).

The investment portfolio will normally lie in the range of 80% to 100% of shareholders’ funds. The Company will continue with its policy of not employing leverage.

In January 2021 the Board reviewed the performance of the Company in the context of the investment objective, the investment policy and the continuation of the Company. The Directors unanimously supported the continuation for a minimum period of five years to 2026.  
The trust’s investment focus and strategy
Top down and bottom-up process
Dan and Matt operate a blended top down and bottom-up approach to stock selection. They use a macroeconomic framework which considers key UK and global economic indicators, which then determines their thematic and sectorial exposure over time.

Their stock selection process is embedded in fundamental bottom-up research of companies, utilizing their own primary and third-party investment bank research to understand and assess the prospects for companies.

They are focussed on investing in companies which are operated by high quality management teams with strong track-records of execution, and which are fundamentally mispriced.
Style agnostic
The investment management team are style agnostic, which means they build portfolios of companies which exhibit both growth and value characteristics across the small and mid-cap universe.
Portfolio construction
They are seeking to build a high conviction, concentrated portfolio of companies, providing investors with exposure to high-quality, innovative businesses that have developed best-in-class business models. This allows the team to take a longer-term view, holding companies which are less liquid than they would hold in an open-end fund, and which they can commit to holding for a long period of time.

The principal risks are as follows:

  • Market risk – the portfolio will be invested predominantly in listed equities and therefore will be exposed to a range of market risks including economic conditions, market disruptions, accuracy of company information, global health crises, competition and volatility
  • Idiosyncratic risk – the portfolio will be concentrated and therefore will be exposed to the idiosyncratic risks of each underlying investment
  • The portfolio will be exposed to liquidity risk given the focus on smaller companies.
  • The portfolio will be exposed to interest rate risk both as a consequence of any financial leverage within the underlying investments and as a consequence of the impact of interest rates on the market valuation of companies.
  • Currency exposure – The portfolio may invest in companies whose revenues, profits and / or balance sheets may have exposure to foreign currencies.
  • New issues – The AIFM on behalf of the Company may invest in new issues which can pose additional risks related to transient illiquidity, lack of trading history and concentration of ownership.
  • Corporate management and financial reporting risk – The AIFM relies on financial information made available by the companies in which it invests. This information may not be independently verified by the AIFM. Corporate mismanagement, fraud and accounting irregularities relating to the underlying investments may result in material losses.

Meet the team