Doceo Fund Monitor

Achilles (AIC) does what no other fund in London has managed to do in recent years – raise over £50m as part of an initial public offering; Foresight Solar (FSFL) joins the growing ranks of funds adopting more shareholder-friendly management fee structures and is also exploring all options in terms of its future strategy; while Assura (AGR) turns down a 48p per share cash offer from KKR.

By Frank Buhagiar

Achilles, London’s first £50m+ fund IPO since 2021

Achilles (AIC) has done what others have failed to do in recent years – raised over £50m as part of an initial public offering (IPO) in London’s investment company space. As per the press release o21 February 2025, the fund will invest in a “concentrated portfolio of closed-ended investment companies, admitted to trading on a market of the London Stock Exchange, with a focus on alternative assets (being assets other than publicly quoted equities) and to seek to maximise value for Shareholders through constructive activism.” The fund’s managers, Christopher Mills and Robert Naylor have form when it comes to getting the maximum value out of alternative assets – both played key roles in the successful sales of music royalty investors Roundhill Music and Hipgnosis. Investors clearly thinking the pair can repeat the trick elsewhere in the alternatives sector.

Liberum: “There does tend to be less activist involvement in Alternatives. Compared to equity funds, shares are far more widely held by institutions and wealth managers. While AIC’s ticket sizes may not be particularly large, it is likely that it will have the support/backing of some of the largest owners of Alternative funds and will therefore be able to represent the views of a large portion of registers in the funds it targets. We think the more good outcomes that can be delivered, the more chances there are for good strategies caught in the crossfires to come back into favour and the more likely it is for the sector to successfully introduce a wider pool of buyers.” Achilles to the rescue!

Foresight Solar cuts fees and assesses options

Foresight Solar (FSFL) joins the growing ranks of funds adopting more shareholder-friendly management fee structures. “The Board and the Investment Manager are acutely aware of the growing preference from investors for management fee structures to more closely reflect the share price performance experienced by shareholders.” Two “significant improvements” have been made. Under the new arrangements, rather than being wholly applied to net asset value (NAV), the new management fee will be applied to an equal weighting of (i) the average of the closing daily market capitalisation during each quarter and (ii) the published NAV for the quarter.

There’s also been a change to the fee rate charged. Previously, the Investment Manager received an annual management fee calculated at the rate of 1% p.a. of NAV up to £500m and 0.9% p.a. of NAV greater than £500m. From 1 March 2025, new fee rates of 0.95% up to £500m and 0.8% over £500m will be applied. As for what this means in terms of savings, the company helpfully provides an example. Using the 17 February 2025 77.7p share price, £436.3m market capitalisation and 31 December 2024 NAV of £634.4m, the changes would generate an annualised saving of c.£1.2m (19%).

Further changes could be afoot too. That’s because the Board has been talking with shareholders who “have expressed a range of views to the Board. While some have expressed a desire for liquidity, others are seeking ongoing exposure to the listed renewables sector through a vehicle with greater secondary market liquidity and scale to drive efficiencies. The Board’s role is to balance these objectives and deliver value to Shareholders in an efficient and effective manner by exploring all options available.” So, watch this space.

Jefferies: “the fee reduction and the fact that the board is ‘exploring all options available’ in terms of the future strategy of the fund should be welcomed by shareholders, with the hope that a more specific path forward is outlined ahead of this year’s discontinuation vote.”

Assura turns down takeover offer

Healthcare property co. Assura (AGR) put out a press release in response to an announcement from KKR “relating to the indicative, non-binding proposal that it submitted to the Assura Board on 13 February 2025 regarding a possible cash offer for the entire issued share capital of the Company.” The AGR Board however deemed the 48p per share offer “materially undervalued the Company and its prospects and therefore rejected it unanimously.” Ball back in KKR’s court.

Numis: “KKR confirmed that it has to-date made four indicative non-binding proposals to the Board. The latest proposal reflects a 28% premium to Thursday’s closing price, a 27% premium to the three-month volume weighted price, and a 2.8% discount to the September 2024 NTA.”