Amati Aim Strategic Review

[Mainwaring]

https://www.voxmarkets.co.uk/rns/announ ... 08bdc4edae

I’m sure there’s a few here with Amati. Announcement today, some Board independence on view, removing Amati as investment managers, and probably sensibly going to Aim plus (General) strategy via Maven. I had a thought that Maven owned Amati circa 50/50 with Dr Paul Jourdan so no great surprises here. More details and a vote to follow. I hope that shareholders receive any distributable reserves before they consider raising funds under the new Maven brand.

[Kidman]

I had a thought that Maven owned Amati circa 50/50 with Dr Paul Jourdan so no great surprises here.

I think Amati Global Investors is owned jointly with Mattioli Woods not Maven and I think is a 51/49 split with MW the 49%.

[oxmatt]

In my view this is potentially a very poor outcome for existing shareholders unless the terms of the new Investment Management Agreement are not appropriately set. Amati has had a considerable headwind from the poor market environment for AIM in recent years and it would be a terrible outcome for Maven to receive potential significant performance fees purely off the back of an AIM recovery from the market conditions that the existing shareholders have suffered from. Ideally I would like any new performance fee arrangement for Maven to only cover new investments (not withstanding the incentive that might give them to churn the existing investments to make new ones) or at least not kick in until a few years of positive performance. As a reminder there is no current performance fee for Amati.

[UncleEbenezer]

In my view this is potentially a very poor outcome for existing shareholders unless the terms of the new Investment Management Agreement are not appropriately set. Amati has had a considerable headwind from the poor market environment for AIM in recent years and it would be a terrible outcome for Maven to receive potential significant performance fees purely off the back of an AIM recovery from the market conditions that the existing shareholders have suffered from. Ideally I would like any new performance fee arrangement for Maven to only cover new investments (not withstanding the incentive that might give them to churn the existing investments to make new ones) or at least not kick in until a few years of positive performance. As a reminder there is no current performance fee for Amati.

Indeed. As I recollect it, Amati got some praise for dropping the performance fee at the time.

Presumably introducing any new one would require a shareholder vote? To consider voting for that, I'd want to see a sensible hurdle that includes outperforming the benchmark. Especially when it's up against something so volatile as AIM!

[Mainwaring]

Just to clarify my fuzzy historic ownership recollection I’ve gone down the rabbit hole and it seems that Maven/Mattioli/Pollen Street Capital own 100% of Amati Asset Managers.

This a cut and paste from a Citywire article in May 2021

Mattioli Woods has also bought Maven Capital Partners in a deal worth up to £100m, split into an initial £80m payment and up to £20m in deferred consideration.

Maven has £772m of assets under management and runs alternative investments such as the Maven Income & Growth VCT trust range. It also has a management buyout (MBO) fund, seven regional funds that provide equity and debt to SMEs across the UK and Maven Investment Partners, which funds individual private equity deals, including in the property space.

Mattioli Woods said the deal would provide more options for its clients. It currently owns the Custodian REIT and has a 49% stake in Amati, which runs funds such as TB Amati UK Smaller Companies.

Then in September 2024…..

Private equity firm Pollen Street Capital has agreed a £432 million deal to acquire wealth manager Mattioli Woods, owner of Glasgow-based corporate finance house Maven Capital Partners.

Mattioli Woods has a client base of more than 20,000 wealth clients with more than £15bn of assets under management. It acquired Maven in 2021.

Amati and Maven have done at least one VCT deal together in 2023. Perhaps it’s working out?

https://www.finextra.com/pressarticle/9 ... cture-2030

So probably understandable that Maven/Mattioli/Pollen Street Capital would be the manager going forward.

[Kidman]

Very interesting, thank you.
I hadn't realised Maven had sold out to MW.

As to Amati, I thought Paul Jourdan had bought back the option for MW to buy the other 51%.

This sounds like MW has pushed the directors to replace a 49% owned manager by a 100% owned manager!
So that would double the management fees going up the corporate tree?

[Kidman]

Presumably introducing any new one would require a shareholder vote?

I don't think so.
The directors agree the fee with the manager and that is that.

Your only recourse is to vote against directors standing for re-election.

[londoninvestor]

Presumably introducing any new one would require a shareholder vote?

I don't think so.
The directors agree the fee with the manager and that is that.

Your only recourse is to vote against directors standing for re-election.

I remember that AAVC did need a shareholder vote to amend its fee agreement in 2019 (snuck through in a "separate" meeting after the AGM to avoid it appearing on the AGM agenda...)

It may depend on the articles of the company though, so I don't know if it's the same for all VCTs.

[Kidman]

I remember that AAVC did need a shareholder vote to amend its fee agreement in 2019 (snuck through in a "separate" meeting after the AGM to avoid it appearing on the AGM agenda...)

It may depend on the articles of the company though, so I don't know if it's the same for all VCTs.

I can't see it, but maybe I'm not searching on the right phrase,
https://albion.capital/wp-content/uploads/2024/11/AAVC-Articles.pdf
Perhaps they just had a vote out of decency rather than obligation?

I recall votes to change objectives in the Memorandum of Association but I don't recall voting on fee changes.
As you say, I suspect it is up to the individual company.

[barchid]

It is correct that MW bought Maven but I am pretty sure with an agreement that Bill Nixon would stay for at least 5 years, he has been a very good head of Maven over the years & I doubt you will see much of him giving his thoughts on the market as Dr Jourdon did. I certainly felt that in the past few years Dr PJ took every opportunity to puff various stocks in online interviews, which as we see now was singularly ineffective.
Maven is one of my larger holdings (as was Amati until it started shrinking almost daily), I think this is a positive move for the battered shareholders of Amati.

[londoninvestor]

I can't see it, but maybe I'm not searching on the right phrase,
https://albion.capital/wp-content/uploads/2024/11/AAVC-Articles.pdf
Perhaps they just had a vote out of decency rather than obligation?

Fair point. I don't think the Articles themselves require a vote - if it was just about the Articles, the board could have pushed it through without a vote under "General Powers of the Board to Manage Company's Business".

I dug back into the documentation at the time of the change, and it looks like the requirement for a vote comes from the FCA Listing Rules.

From AAVC's original circular:

Under the Listing Rules, the Manager is a related party of the Company and the Proposals constitute a related party transaction, requiring the approval of the Independent Shareholders. The Resolution approving the Proposals, which are set out in the Deed of Variation, will, therefore, be proposed at the General Meeting.

I'm no kind of lawyer, so the rest of this is my extrapolation. I think Albion Capital as the investment manager would be deemed to be a "shadow director" of AAVC, exercising substantial control even if it doesn't formally have board seats, and therefore it's a related party under these rules. So a shareholder vote is needed to safeguard against a conflict of interest.

I guess kicking out the incumbent manager may not be deemed to create the same type of conflict, so wouldn't need a vote?

[sinterklaas]

“Renovar”

Maven Renovar VCT