EDGE performance incentives

[Blagdon]

Has anyone managed to find or read the Edge VCT circular on varying the I class performance incentives?

[Converse1]

Performance is not something I associate EDGE with. I haven't seen document.

[127tolmers]

Here it is. Interested in anyone's thoughts.

http://tools.morningstar.co.uk/tsweu6nq ... =171816192

[bnmlp]

First look through suggests an error at 2(a). Surely the £32.6M should be £40.7M. On a separate note I'm note sure where the £40.7M figure is arrived at since it is not 29% more than £32.6M.

I haven't yet done the math but both I and spouse will be voting against if there is any incentive if the total share return is less than 130p per original class share. After all this was the all too often repeated target in prospectus.....and was one of the key reasons many people invested. To miss once or twice was acceptable but it was never on the edge of performance.

Also no incentives should be payable if either Coolabi or Intent are sold to a party connected with any present or future directors.

Have I misunderstood the math?
Cheers bnmlp

[127tolmers]

I have now had a chance to read it. The Feb 2018 results have the I class Net Assets of GBP 33.9m at 46.4 p/share and today's mid market price is 27p/share.

The circular says that the performance fee will not kick in until further dividends of GBP 40.7m have been paid ie a 20% uplift from today. That would equate to divs/share of 55.7p or roughly double today's share price.

While I don't like rewarding failure by lowering the original performance hurdle, we are where we are today. Given the poor quality in the portfolio and the relatively high valuation of Coolabi by Edge versus Chrysalis, I would hold my nose and approve the revised performance fee. If they can improve on 55p future dividends I would be very happy. Also in its favour is a time pressure element to achieve payout or face a discount on the performance fee.

I have not worked through the Plan B which is the default option if this is not approved, but at first sight it looks like the manager would have to pay out 65 p/share more in dividends before getting 19% and 85p before getting 29%.

My real problem is the 1.75% management fee on the I shares for a fund in rundown. 1.0% would be closer to the industry norm. Also there appears to be a GBP 275k admin services agreement which typically is about GBP 50-100k in the industry. In my view, these fees should have been addressed in conjunction with the revised performance fee.

[127tolmers]

I got the hard copy EDGE Annual Report and performance fee circular at the weekend. I only got voting forms for the performance fee GM and not for the AGM. Anyone else have the same problem?

[127tolmers]

I am astonished that Edge have employed proxy consultants at shareholder expense to grub around for votes to get the performance fee approved. It annoyed me more that Boudicca were only soliciting votes for the performance fee and not for other votes at the AGM. I received an email and an unsolicited phone call. I have never seen proxy consultants used in the VCT world; they tend to inhabit the world of contested takeovers which is where they should stay.

It has certainly had an effect. I have now changed my vote to NO.

Here is the email. It looks very amateurish with spelling mistakes and Kenney vs Kennedy.



Edge Performance VCT PLC – General Meeting and I Share Class Meeting to be held on 11 June 2018

NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR USE, IN WHOLE OR IN PART, IN JURISDICTION WHERE TO DO SO WOULD BE CONTRARY TO THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. ANY RECIPIENT OF THIS DOCUMENT IN JURSIDICTIONS OUTSIDE OF THE UK SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY APPLICABLE LEGAL AND REGULATORY REQUIREMENTS.

YOUR IMMEDIATE ATTENTION IS REQUESTED

Company: EDGE PERFORMANCE VCT PLC

Ticker: EDGH
ISIN: GB00B44VMB16
SEDOL: B44VMB1

Ticker: EDGI
ISIN: GB00B5B6VC05
SEDOL: B5B6VC0

General Meeting Date (H and I eligible): 11 June 2018 at 10.20 a.m.
Proxy Voting Deadline: 7 June 2018 at 10.20 a.m.

I Share Class Meeting: 11 June 2018 at 10.50 a.m.
Proxy Voting Deadline: 7 June 2018 at 10.50 a.m.

Venue: Offices of Howard Kenney LLP, No.1 London Bridge, London SE1 9BG

Information Agent: Boudicca Proxy Consultants


Dear Edge Performance Shareholder,

You should be aware that the General Meeting and I Share Class Meeting of Edge Performance VCT PLC will be held on 11 June 2018 at 10.20 a.m. and 10.50 a.m., respectively, at the offices of Howard Kenney LLP, No.1 London Bridge, London SE1 9BG

On 15 May 2018, the Company and the Investment Manager entered into the Deed of Variation, which will vary the Investment Manager’s performance incentive fee entitlement on further cumulative aggregate amounts available for distribution to I Shareholders. Further information is provided in the Circular, and Forms of Proxy, which were posted to you on 15 May 2018. Please also find these documents attached and available at https://edge.uk.com/edge-performance-funds/.

Under the Listing Rules, the Investment Manager is a related party of the Company and the Deed of Variation constitutes a related party transaction, requiring the approval of the Independent Shareholders. Resolutions approving the Deed of Variation will, therefore, be proposed at the General Meeting and at the I Share Class Meeting.

The Independent Directors believe that the Deed of Variation is fair and reasonable. Accordingly, the Independent Directors consider that the Resolutions contained in the Circular are in the best interests of the Company and the Shareholders as a whole and recommend that Shareholders vote In Favour of the Resolutions.

It is important that you complete the Forms of Proxy and return them to Share Registrars Limited, The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR in the reply-paid envelope provided so as to be received as soon as possible, and in any event by no later than 48 hours prior to the time of the General Meeting (7 June 2018 at 10.20 a.m.) and I Share Class Meeting (7 June 2018 at 10.50 a.m.). If you are an I Share Class holder, it is important that you vote at both the General Meeting and I Share Class Meeting

Assistance

Boudicca Proxy Consultants are the official Information Agent to Edge Performance VCT PLC. Attached is our Letter of Authority from the Company. Should you have any questions, please contact Boudicca on +44 (0) 207 099 2075. Alternatively, you may e-mail your enquiries to info@boudiccaproxy.com, or by replying directly to this email. We will follow up this email with a brief telephone call and would appreciate your cooperation with this.

Kind regards,
The Boudicca Team

[UncleEbenezer]

Should we expect a vote of no confidence in your directors at the next opportunity?

And do you know if any of your directors are also on the boards of other VCTs?

[longtermreturns]

While you've got to admire the gall in reintroducing a 'performance fee' for nonexistent performance, this shouldn't be a distraction from the fees being charged each and every year - and the generosity of the Board in agreeing to raise the fees cap to 3.75%. Heads they win big and the investor loses, tails the investor simply loses.

[127tolmers]

Due to the persistence of two shareholders the I class performance fee change to the benefit of the Manager apparently did not receive the necessary majority yesterday for its implementation. An RNS on the voting would normally be released on the same day to prevent a false market but nothing has been released at the time of writing this morning.

[127tolmers]

Finally an RNS! 30% against the special resolution requiring a 75% vote.

https://www.investegate.co.uk/edge-perf ... 01118970T/

Previous proxy voting without counting NO votes held in the room.

https://www.investegate.co.uk/edge-perf ... 08571061R/

[BusyBumbleBee]

Interesting, Tolmers.

There were over 700,000 votes for 'chairman's discretion'. Any idea how he used these votes - or were they in fact as worthless as the 92,767 ''votes withheld'?