In March 2016 I wrote a post about North Atlantic Smaller Companies investment trust, A Matter of Trust. A year later I have bought some shares and I will tell you why.
At first sight it doesn’t seem a good idea. It doesn’t pay a dividend and the charges are higher than I like; a flat 1% of NAV and a performance fee on top. I paid £25.85, just shy of the all time high, £26.05. However they are trading at a 19% discount to Net Asset Value and 27% of the trust is in US Treasury Bills so if the stock market turns south that will provide some insulation. It seems rather a bargain to buy T Bills at a 19% discount.
Something else gave me encouragement. The Chairman has been adding to his holding for himself and his family. Peregrine Montcreiffe now has 2.9% of the company, worth more than £10 million, making my purchase insignificant. But the CEO, Christopher Mills, has also been adding to his holding. He bought £600,000 of shares at the end of last month and owns 27.9% of the company. I will save you the trouble and tell you that’s worth over £100 million. They are long term investors and I’m happy to be on board. I sold my holding in two companies to fund this trade and now, hurrah, only have shares in eight companies, as opposed to unit trusts, investment trusts and venture capital trusts.
Let me tell you a bit about them. Both Old Etonians, I was in the same house as Christopher; Peregrine rowed in the Oxford boat, was the first on Wall Street to have earnings over a million dollars, in the early 1980s. He came to dinner on election night in 1983 at my flat in New York and I remember him being a bit wistful seeing his Tory friends being returned to parliament. Christopher is a political animal too, currently business spokesman for UKIP – well we cannot be perfect.