Rockwood Strategic (RKW) has switched from a fixed management fee of £120,000 per year to charging 1%, as its consistent premium rating allowed the board to issue shares in the trust and grow net assets above the £60m threshold at which the percentage fee kicks in.

Following a strong 12 months to the end of March, in which shareholder returns of 15.4% eclipsed the portfolio returns of 5.1% and the FTSE Small Cap (ex-ITs) index benchmark’s 7.1%, chair Noel Lamb said that the growth in assets reflected the fund’s success despite tough market conditions.

While the £88m UK smaller companies trust managed by Richard Staveley navigated challenging market conditions to deliver a positive return, driven by its style of engaging with company management teams, it underperformed the benchmark and failed to meet the hurdle for a performance fee. Investment manager Harwood Capital charges a 10% performance fee if gains beat the index by 6%.