17 April 2018
BLACKROCK SMALLER COMPANIES TRUST PLC
Change of investment management fee and removal of performance fee
The Board of BlackRock Smaller Companies Trust plc (“the Company”) is pleased to announce that new fee arrangements have been agreed with BlackRock Fund Managers Ltd (“the Manager”) and are being applied with effect from 1 March 2018.
Under the new arrangements, the Company will pay an investment management fee calculated at a rate of 0.60% on the first £750 million of the Company’s total assets less current liabilities, reducing to 0.50% thereafter; and the Company will no longer pay a performance fee. The Company’s Gross Assets less Current Liabilities amounted to £786.7 million at 31 March 2018.
Prior to the introduction of these new fee arrangements, the Company paid an investment management fee calculated at a rate of 0.65% on the first £50 million of the Company’s total assets less current liabilities, reducing to 0.50% thereafter; and a performance fee based on 10% of the annualised excess performance over the benchmark in the two previous financial years, applied to the average of the total assets less current liabilities of the Company. The performance fee was payable annually in April and was capped at 0.25% of the average of the total assets less current liabilities of the Company. The Company’s strong performance since the previous fee arrangements were put in place has resulted in the performance fee being capped each year.
The Board is of the view that these changes are appropriate given the substantial increase in size of the Company since such fees were last agreed. In addition, they are consistent with trends in fees which are being seen across much of the investment trust sector and will make the Company even more competitive within the UK Smaller Companies subsector. The Board also sees merit in the simplicity and transparency of the new fee arrangements.
The Board estimates that if the new fee arrangements had been applied for the year ended 28 February 2018, the total fees payable to the Manager would have been approximately 20% (£1.1 million) lower; and the total operating charges ratio (inclusive of performance fees) would have been reduced from 0.93% to 0.77%.
For further information, please contact:
Nicholas Fry, Chairman, BlackRock Smaller Companies Trust plc
Tel: 07802 610749
Simon White, Managing Director, Closed End Funds, BlackRock Investment Management (UK) Limited
Tel: 020 7743 5284
Lucy Horne, Lansons Communications – Tel: 020 7294 3689 E-mail: [email protected]
This announcement contains Inside Information as defined under the Market Abuse Regulation (EU) No. 596/2014.