Boutique fund manager Milkwood Capital has blocked the wind-down of Downing Strategic Micro-Cap (DSM) with the aim of taking over the distressed UK smaller companies fund and making good shareholders’ losses of over 40% from the past seven years.
Milkwood, a 10-year-old Windsor-based company that describes itself as a ‘fundamental valuation-driven asset manager’, became the largest shareholder in the investment trust after buying a 28% stake last month.
Founder Rhys Summerton wants to relaunch the listed fund and continue its remit of engaged investing in a concentrated pool of UK small-cap stocks. In an interview with Citywire he cited the example of sector leader Rockwood Strategic (RKW) whose 164% five-year returns he would rather emulate than the 16% decline in DSM over that period.