LEI:
213800PED8RFUBMK1T64
31 May 2024
Castelnau
Group Limited
(“Castelnau”
or the “Company”)
Performance
Fee Arrangements Update
The Board
of the Company announces, that as detailed in its Annual Report
published on 19 April 2024, it has
reviewed the performance fee arrangements under the investment
management agreement with Phoenix Asset Management Partners Limited
(the “Investment
Manager”)
dated 23 September 2021 (the
“IMA”)
and have today entered into a restated and amended investment
management agreement (the “Revised
IMA”) which
includes a number of minor amendments to the way the performance
fee is calculated.
Summary
of changes
The
Investment Manager does not charge a management fee to Castelnau
and is instead incentivised solely via a performance based fee
arrangement. In summary, the performance fee arrangement is
measured over consecutive periods of not less than three years with
first period commencing on the Company’s IPO on 18 October 2021 and ending on 31 December 2024. The performance fee payable is
one third of the outperformance of the Net Asset Value total return
after adjustment for inflows and outflows, over the FTSE All-Share
Total Return Index (the “Benchmark”)
with, subject to certain regulatory considerations, the performance
fee being satisfied through the issuance of new ordinary
shares.
The
directors believe that the performance fee, measured over a three
year period and receivable in shares, remains a significant point
of alignment between the Company, its shareholders and the
Investment Manager; however, the performance fee arrangement has
been reviewed to ensure this alignment is equitable to all parties.
Pursuant to the terms of the IMA, the performance fee is paid based
on the outperformance over the Benchmark, calculated by reference
to the ‘average’ adjusted net assets of the Company over each
performance period. The averaging of the net asset value over the
performance period does not fully take into account the
outperformance that has been delivered by the Investment Manager
and principally for this reason a limited number of adjustments are
being made to the IMA, with the revisions summarised
below:
-
The fee
will remain as one third of the outperformance over the Benchmark,
however, the fee will be calculated by reference to the closing net
asset value (“Closing
NAV”)
rather than the average net asset value, and will be compared to
the ‘Benchmark NAV’.
-
The
Closing NAV is the reported net asset value of the Company at the
period end, excluding any accrued performance fees. This will be
compared to the Benchmark NAV, which is the Company’s opening NAV
for the performance period to which the Benchmark return is
applied. The Benchmark NAV will also be adjusted for the impact of
inflows and outflows to the share capital of the Company, to ensure
that both the Closing NAV and Benchmark NAV reflect performance
adjusted for the impact of these events.
For the
avoidance of doubt, no performance fee for the period to
31 December 2024 would currently be
payable under either the original or revised performance fee
calculation. In addition, no additional changes under the Revised
IMA (other than in respect of the performance fee) are being
made.
As an SFS
company CGL is not required to comply with the provisions of
Chapter 11 of the Listing Rules regarding related party
transactions. However, the Company have adopted a related party
policy which applies to any transaction which it may enter into
with any Director, the Manager or any of their affiliates, which
would constitute a “related party transaction” as defined in, and
to which would apply, Chapter 11 of the Listing Rules. In
accordance with the Company’s related party policy the independent
directors of the Company have considered the terms of the Revised
IMA and have confirmed that they consider the changes to be fair
and reasonable.
Enquiries:
Castelnau
Group
Richard Brown - CEO
info@castelnaugroup.com
Phoenix
Asset Management Limited
+44 (0)
208 600 0100
Gary Channon
Steve Tatters
Gina Bocek
Liberum
Capital Limited
+44 (0) 20
3100 2000
Darren Vickers
Owen Matthews
Will King
Citigate
Dewe Rogerson
+44 (0) 20
7638 9571
Caroline Merrell
Toby Moore
Northern
Trust International Fund Administration Services (Guernsey)
Limited
The
Company Secretary
Trafalgar
Court
Les
Banques
St Peter
Port
Guernsey
GY1
3QL
Tel: 01481
745001
