Australia | Jun 01 2021
This story features PENGANA INTERNATIONAL EQUITIES LIMITED REGISTERED, and other companies. For more info SHARE ANALYSIS: PIA
Download related file: Monthly-LMI-Update_May-2021
A Listed Investment Company (LIC) is a listed investment vehicle that offers investors access to a diversified portfolio of shares in other companies also listed on the stock market. Also known as Listed Investment Trusts or Listed Managed Investments.
For comprehensive comparative data tables for LICs please see attached.
By Radek Zeleny, analyst Independent Investment Research
Pengana International Equities Limited ((PIA)) Appoints New Manager
On 10 May, PIA announced the replacement investment team for the management of the portfolio after Jordan Cvetanovski and Steven Glass abruptly exited the business in March. New Jersey based Harding Loevner LP have been appointed as the new investment team. Harding Loevner is a global equity manager with over 100 employees and over US$84b FUM. As a result of the appointment, PIA will adopt the Harding Loevner global equity strategy with the addition of PIA’s ethical screens.
PIA has stated that Harding Loevner’s investment philosophy supports PIA’s objective to provide shareholders with capital growth from investing in an ethically screened and actively managed portfolio of global businesses, in addition to providing shareholders with regular, reliable and fully franked dividends.
The IIR rating for PIA is currently “on watch” and will be reviewed once a full evaluation of the new investment team and strategy is completed.
MXT Raises $192m through Institutional Placement
On 26 April, MCP Master Income Trust ((MXT)) announced they had received binding commitments for 95.9m new units in MXT at a price of $2.00 per unit from wholesale and institutional investors, raising $192m.
The proceeds will be invested in accordance with the investment mandate and target return of MXT. The Metric’s Managing Partner, Andrew Lockhart, commented “The additional investor capital will provide for increased portfolio diversification which acts to lower investment risk, expected positive impact on total investor returns as new capital is deployed and invested, enhanced liquidity from the increased scale of MXT and expected further reductions in costs over time.”
MEC releases 1H21 Results
On 18 May, Morphic Ethical Equities Fund ((MEC)) released its financial results for the half year ended 31 March 2021. Strong portfolio performance for the period resulted in MEC declaring a fully franked interim dividend of 2.5 cents per share, a 150% increase on the previous interim dividend. Before payment of the dividend, the company had dividend coverage of in excess of five years at an annual dividend rate of 5 cents per share.
BTI Raise $4m From SPP
Bailador Technology Investments’ ((BTI)) share purchase plan closed on 18 May. BTI received applications of $4m from eligible shareholders. The SPP followed the $20m institutional placement completed in April with shares in the SPP offered at the same price as the institutional placement.
The capital will be used to capitalise on a pipeline of investments that the Manager believes represents good value for investors.
MA1 Suspended from Trading as the Restructure to an ETMF Continues
On 10 May, MA1 shareholders overwhelmingly voted in favour of restructuring the company as an exchange traded managed fund (ETMF). On 28 May, MA1 was suspended from trading and will be delisted on 1 June. Units in the newly created ETMF named Monash Absolute Active Trust (Hedge Fund) are being issued to shareholders on an in-specie basis and are expected to commence trading on the ASX under the new ticker MAAT on 10 June.
The ETMF will utilise the Single Unit (dual registry) Structure, which will allow for unitholders to buy and sell units either on-market or off-market.
APL Provides Update on Conditional Tender Offer (CTO)
Antipodes Global Investment Company Limited ((APL)) provided an update on the CTO during May. The CTO was announced on 31 August 2020 and was overwhelmingly approved by shareholders at the AGM in November 2020.
The CTO is the company’s primary discount management mechanism. The CTO is triggered if the average daily discount is greater than 7.5% for the 12-month period from 19 October 2020 to 18 October 2021. The average daily discount since the period began until 14 May 2021 is 12.1%. If triggered, the CTO provides shareholders the ability to sell APL shares to the company via an off-market buy-back at a price equal to the prevailing post-tax NTA less 2%. The company will buy back a maximum of 25% of issued capital.
Given the average daily discount remains above the discount trigger of 7.5%, unless the discount narrows substantially over the coming months the CTO will be triggered. Depending on where the share price is trading at end of the period, there may be an arbitrage opportunity for shareholders.
NSC Issues Bonus Options
Naos Small Cap Opportunities Company ((NSC)) has issued Bonus Options to shareholders on a 1-for-3 basis. The options will have an exercise price of $1.02 and an exercise date of 28 June 2024. The exercise price represents a 29.1% premium to the NSC share price at 30 April 2021.
WAM Strategic Value Limited ((WAR)) Offer Opens
The WAR IPO offer opened in May and is expected to close on 10 June 2021. The offer seeks to raise up to $250m through the issue of up to 180m shares at $1.25 per share. The company will seek to invest in a portfolio of LICs and LITs that are trading at a discount to NTA/NAV in which the reasons for the discount can be identified and the Manager believes it can provide or implement techniques and strategies that could assist with narrowing the discount. The portfolio will typically comprise 10 to 30 holdings with individual position sizes typically ranging from 1%-15%. Given the underlying investments, the portfolio is expected to be diversified by both underlying security and investment strategy. The initial portfolio is expected to primarily comprise LICs/LITs that are held by vehicles managed by Wilson Asset Management and are trading at a discount.
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