Mandate switched

Rice pulls North American Income Trust from Abrdn

Susan Rice
Dame Susan Rice: switching trust to Janus Henderson (pic: Terry Murden)

Abrdn, the Scottish investment manager, has lost the mandate for the North American Income Trust, with fund manager Fran Radano leaving to join Janus Henderson which has picked up the business.

NAIT chair Dame Susan Rice said the board, having conducted a review, believed the £391 million trust would be better served by Janus Henderson and the “strength and breadth of its US equity capabilities”.

The trust has served notice to Abrdn, and the transfer is expected to complete in the third quarter of this year if it passes a triennial shareholder continuation vote at the annual general meeting next month.

The switch comes just weeks after Abrdn CEO Stephen Bird noted that the outflow of assets under management had been stemmed, with a slight upturn during the first quarter.

The loss of NAIT follows a move on Tuesday by Ashoka WhiteOak Emerging Markets making a hostile bid approach for Asia Dragon, a £600m trust Abrdn had hoped to retain following Dragon’s merger with stablemate Abrdn New Dawn last November.

NAIT is the third Abrdn trust to appoint a new manager in the past 16 months. The NAIT board has negotiated a lower annual management fee from Janus Henderson.

Janus Henderson has also agreed to offset some of the costs of the changeover against its fee for three months.

Shares in NAIT slipped 0.9% to 288.3p on a 14% discount in early trading, with Numis commenting that shareholders ‘may have been hoping for more radical changes’ given the trust’s poor performance.

Mr Radano, a value investor, has run the 4%-yielding trust since May 2012, generating a 242.6% total investment return, equivalent to 10.9% a year. This is still lower than the 343.4% (13.3% a year) from its US benchmark, the Russell 1000 Value index.

Winterflood, NAIT’s broker, gave the manager’s stock picking the benefit of the doubt. It said the trust had delivered 13 consecutive years of dividend growth with an average annual increase of about 8%. In addition, the company had built revenue reserves equal to one year’s payout.

Dame Susan said: “Fran Radano has managed the company’s portfolio for over 10 years and we believe that working closely with Janus Henderson’s broad and experienced equities desk in the US will bolster his ability to continue to find attractive investment opportunities in the North American market.

“Janus Henderson has strong credentials in North American equity income investment and we believe that this will lead to improved NAV performance while maintaining the company’s attractive dividend.”

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