Gresham House Renewable EnergyVCT2 Amendment to Investment Advisory Agreement
25 Juni 2024 - 11:25AM
RNS Regulatory News
RNS Number : 7843T
Gresham House Renewable EnergyVCT2
25 June 2024
25 June 2024
GRESHAM
HOUSE RENEWABLE ENERGY VCT 2 PLC
(the
"Company")
Amendment to
Investment Advisory Agreement: smaller related party
transaction
The Board of Gresham House Renewable Energy VCT
2 PLC (the "Company")
announces a variation (the "Variation") to the terms of the
investment advisory agreement dated 7 November 2017 (the
"IAA") entered into between
the Company, Gresham House Renewable Energy VCT 1 PLC and the
Company's Investment Manager, Gresham House Asset Management
Limited (the "Manager"),
pursuant to which the Manager provides investment advisory services
to the Company in exchange for an annual advisory fee.
The annual advisory fee is a net asset value
("NAV") based fee and is
subject to a clawback depending on whether the Company's annual
running costs exceed 3% of NAV (the "Cap"). Following the adoption of a new
investment policy on 13 July 2021, the Company's principal
objective is to realise the remaining assets in the portfolio
through sales or otherwise monetisation of the assets
Following the sale of some assets in April 2023 and
subsequent dividend paid as a result of the 13 July 2021
shareholder vote to wind-down the Company (the "Managed Wind Down"), the Company's net
assets have reduced significantly to a level not anticipated when
the IAA agreement was agreed and signed. Due to this significant
reduction in the NAV as a result of the Managed Wind Down process,
the annual running costs for the financial year ending 30 September
2024 are currently forecasted to be around 4% of NAV, which would
exceed the current 3% cap. This means that running costs, many of
which are largely fixed, now exceed the Cap and the Manager's
annual advisory fee is therefore subject to a clawback (on top of
an already reduced annual advisory fee due to a lower NAV following
asset sales).
To rectify this unintended consequence of the
new investment policy, the Variation seeks to minimise the effect
of the clawback by raising the Cap to 5% of NAV or £625,000,
whichever is the lower.
The Variation constitutes a smaller related
party transaction within Listing Rule 11.1.10 R.
END
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LEI: 213800GQ3JQE2M214C75
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