The board of the trust has said it intends to follow the manager when he jumps ship for Jupiter, and in the meantime it has been decided his F&C US Smaller Companies Oeic and Sicav will be handed to deputy manager Nish Patel following his exit.
Siddles has more than 25 years’ experience as a US equity fund manager and before joining F&C in 2001 he served at Gartmore and Capel-Cure Myers Capital Management. He is head of US smaller companies at F&C and runs around £500m in assets. Looking at the trust in isolation, he has delivered a net asset value (NAV) return of 188%, versus a 150% rise in the Russell 2000 Index in sterling terms. The trust ranks second in its peer group over five years, with Siddles growing the portfolio by 64.7% compared to a 74% gain by its nearest rival, the JP Morgan US Smaller Companies Investment Trust, which is managed by Garrett Fish.
Speaking to investors yesterday, the board was quick to reveal its next move following Siddles’ decision to exit. “The board’s current intention is to serve notice on F&C and to retain the services of Mr Siddles as the company’s investment manager at his new employer,” they said, however analysts immediately pointed out that given the limited information about Siddles’ new investment house, it was hard to assess the impact of the change on the trust’s numbers.
It emerged this morning that Siddles has decided to quit F&C for Jupiter, where he will work alongside Sebastian Radcliffe, a Jupiter veteran of 15 years, who manages large cap US and global equity income portfolios, including the £488m Jupiter North American Income vehicle.
While Jupiter is a high profile name, laying to rest some fears, analysts at Numis have pointed to other threats that shareholders should consider, namely a drop in F&C US Smaller Companies Trust’s premium, which is only slight today at 1.7%, because of an overhang of stock.
Numis said: “F&C holds a stake of 9.77% and 26% of the share capital is held with F&C’S savings plans/ISAs.”
The brokerage acknowledged, however, that F&C would likely offer existing savings plan investors the opportunity to transfer to another fund, and that the board and new manager would no doubt be keen to offer a transfer option allowing them to maintain their investment, which would prevent the overhang weighing on the trust’s rating.