Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Largest LIC has a social impact kicker
Geoff Wilson
It goes to show what fund managers and other service providers can do about fees when they put their minds to it. The latest global LIC, organised by manager and philanthropist Geoff Wilson and featuring a best-of-breed manager line-up, will donate 1 per cent a year of assets under management to various mental health charities and still offer investors a below-average MER.
The investment company, which aims to raise $550 million for an ASX listing in September, is Future Generation Global Investment Company (FGG). It will operate under the dual mandate to create shareholder wealth and make a sustainable social impact.
The global LIC follows the concept Wilson introduced with a smaller Australian equities version (FGX) last year and the unlisted managed fund pioneered by former fund manager Chris Cuffe with Social Ventures Australia. Selected fund managers have donated their management fee and various other service providers, including the administrator White Outsourcing, are also waiving their fees. If it reaches its target, FGG will be the largest LIC floated in Australia.
It is also expected to offer a total MER well under the 2.0-2.25 per cent range common for active global managed fund products.
“This is a perpetual gift from fund managers and shareholders to young Australians suffering through mental illness,” Wilson, the founder and chairman of Wilson Asset Management, said. “As well as making a social impact, investors have the opportunity to gain unprecedented access to Australia’s most prominent global fund managers, a number of whom are not accessible to retail investors.”
The joint chief executives of FGG are Chris Donohoe, the former chief executive of global manager PM Capital, and Louise Walsh, the recently departed chief executive of Philanthropy Australia. Walsh said she hoped the LIC would be the biggest funder in the youth mental health space outside government.
The board – all pro bono – consists of Belinda Hutchinson, chancellor of Sydney University, as chair, and directors Frank Casarotti of Magellan Asset Management, Sue Cato of the business advisory firm Cato Counsel, Karen Penrose and Sarah Morgan, both experienced independent directors, and Wilson.
Fund managers which have signed up to the offering are: Magellan, Cooper Investors, IronBridge Capital, Paradice, Nikko AM, Eastspring Investments of Singapore, Insync Funds Management, Hunter Hall, Ellerston Capital, Antipodes Partners, VGI Partners, Manikay Partners, Avenir Capital, Morphic Asset Management, Optimal Fund Management, Neuberger Berman and Tribeca Investment Partners.
The charities and research organisations to benefit from the initiative are: beyondblue; Black Dog Institute; Brain and Mind Research Institute; Butterfly Foundation; headspace National Youth Mental Foundation Ltd; MadCap Social Enterprise; Orygen, the National Centre of Excellence in Youth Mental Health; ReachOut Australia; and SANE Australia.
Download a prospectus here.
Other information on the website.
