RWC Partners, the UK investment boutique, has been appointed to take over management of one of the UK’s most popular investment trusts following a prolonged period of underperformance.
The 94-year-old Temple Bar investment trust had been overseen by UK star fund manager Alastair Mundy at Ninety One, formerly known as Investec Asset Management, since 2002.
Ninety One announced in April that Mundy was to take long-term sick leave, which prompted the investment trust’s board to begin the search for a new manager.
In a statement on 23 September, the board of Temple Bar announced it had appointed RWC fund manager Nick Purves and Ian Lance to oversee the £513m portfolio.
Arthur Copple, chair of Temple Bar, said: “Up until recently Temple Bar had a long history of providing attractive investment returns. In selecting RWC as investment manager we aim to reinvigorate the trust and return it to its former position as one of the market leaders in the sector.”
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Mundy forged a reputation as a successful manager by following a value approach to investing — buying companies that were out of favour and undervalued on the basis that they would experience high growth.
Temple Bar’s board said it concluded “this is not a time in the cycle of returns to abandon this value style bias”.
Temple Bar has struggled this year with performance, with shares down by more than 50% since January. It is currently trading at a 12.8% discount to NAV. The board also announced a 25% cut to its dividend for the current year to 38.5p.
“Current projections suggest that there will have to be transfers from reserves to enable the 2020 and the 2021 dividend to be paid, but thereafter the dividend should be covered by earnings,” the board said in its statement.
Dan Mannix, chief executive of RWC Partners, added: “Our appointment comes at an interesting moment as investors consider whether there will be a change of leadership in equity markets, and where to allocate capital in a world of low interest rates and high valuations.”
Ninety One said it “respects the decision” of the Temple Bar investment trust board.
“We will work closely with all relevant parties to ensure a smooth transition,” the asset manager said in a statement.
Ninety One added that Mundy has returned to good health but has decided to pursue a teaching career, a move which was unrelated to the management change announced by the investment trust board. The asset manager said his illness was not related to Covid-19.
Domenico Ferrini, co-chief investment officer at Ninety One, said: “For 20 years Alastair has remained dedicated to his contrarian investment style and played a key role in the growth of our business. He will be greatly missed by the industry and his colleagues and we wish him every success as he embarks on a new trajectory”.
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