Mike Prentis, manager of BlackRock Smaller Companies Trust (BRSC), is to retire next month calling time on a 32-year career and a near-17-year tenure managing this trust. Roland Arnold, who has been co-manager since May last year, will become sole manager of the trust.
Since Mr Prentis started running BlackRock Smaller Companies Trust in September 2002 it has delivered excellent performance, with a share price total return of 1,340 per cent – well ahead of the 364 per cent rise in Numis Smaller Companies plus Aim ex IT index over this time, and more than double the Association of Investment Companies (AIC) UK Smaller Companies sector average of 600 per cent.
Over one year, since Mr Roland became co-manager, the trust has made a share price total return of 4 per cent, in contrast to a 5.3 per cent fall for Numis Smaller Companies plus Aim ex IT index and a 1.3 per cent loss for the sector average. And the trust's number of investments has fallen from 156 to 122 over the past 12 months, reflecting Mr Arnold’s investment style.
Mr Arnold has managed UK equity funds at BlackRock since 2010 with a focus on small- and mid-cap stocks, and worked at BlackRock since 2000. He has been sole manager of BlackRock UK Smaller Companies Fund (GB00B4LHDZ30) since March 2015. BlackRock Smaller Companies Trust now has a similar investment strategy to this fund and a significant number of the same stocks. Since March 2015, BlackRock UK Smaller Companies Fund has returned 94 per cent versus a 33 per cent rise for Numis Smaller Companies plus Aim ex IT index, and the Investment Association (IA) UK Smaller Companies sector average return of 52 per cent.
Mr Arnold is also co-manager of open-ended funds including BlackRock UK Special Situations (GB00B3V1C060) and BlackRock UK Equity (GB00B410CR74).
BlackRock Smaller Companies Trust chairman Nicholas Fry, who is also stepping down next month, said: “Mr Arnold, who has worked closely with Mr Prentis for 14 years… has an impressive track record managing UK small- and mid-cap portfolios and is supported by the wider BlackRock team.”
Ewan Lovett-Turner, director of investment companies research at Numis Securities, said the change is not surprising given Mr Prentis' tenure.
"We do not expect significant changes to the investment approach, given that the team will continue to focus on quality growth stocks, characterised by strong balance sheets and proven management teams," he added. "And we do not expect the change to have a significant impact on investor demand for the trust, although the current share price to net asset value discount is around 5 per cent and around the narrowest level it has historically been. It may be vulnerable from a hit to sentiment towards UK small-caps.”
BlackRock has been planning for Mr Prentis’ retirement for some time. He had already stepped down as manager of BlackRock Throgmorton Trust (THRG) at the end of 2017, which he had run since 2008. Since then, this trust has been run by Dan Whitestone, head of the UK small and mid-cap team at BlackRock. This trust is different to BlackRock Smaller Companies Trust in that it can short stocks.
Performance
| Fund/benchmark | 1-year total return (%) | 3-year cumulative total return (%) | 5-year cumulative total return (%) | 10-year cumulative total return (%) |
| BlackRock Smaller Companies Trust share price | 5.46 | 73.41 | 82.84 | 631.15 |
| AIC UK Smaller Companies sector average share price | -1.87 | 36.36 | 56.48 | 329.62 |
| BlackRock UK Smaller Companies Fund | -5.72 | 47.74 | - | - |
| IA UK Smaller Companies sector average | -2.65 | 40.89 | 51.55 | 288.91 |
| Numis Smaller Companies + AIM ex IT index | -5.66 | 28.89 | 31.1 | 204.48 |
Source: FE Analytics as at 07/05/2019
