An ASIC report notes the boom in demand for this asset, saying it heightens the need for “better-quality data” about the size of this sector where estimates range between $1.8 billion and $188 billion.
CPA Australia has weighed into the debate about the cost to oversee the industry, adding its voice to those who argue the fee structure favours the larger funds.
Mittleman’s ‘PE-like’ global fund to launch in Australia
(pictured: Chris Mittleman)
Fund manager and distributor Brookvine is bringing the Mittleman Brothers global value equity fund to Australia, initially for the institutional market. The fund is billed as “like private equity only better”.
Chris Mittleman, who is CIO and a managing partner, co-founded the unusual global investment firm with his brother Phil in 2003. They were later joined by the third brother, David. Phil is CEO and president and David heads up client relations.
The New York firm runs highly concentrated long-only global portfolios of typically between 15-20 stocks, investing in a value style and adopting some of the approaches more commonly used by private equity managers.
Steve Hall, Brookvine’s managing director, said the private equity mindset employed at Mittleman included a focus on cash yields and absolute returns, by being highly selective, arriving at investment ideas before the broader market and applying great discipline in the way capital is allocated.
“[Chris Mittleman] has a tremendous track record and his approach reflects the way many private investors have built wealth,” Hall said.
The fund has generated an annual return of 17.6 per cent in the 13 years since inception. This, coupled with the manager’s style, prompted Barron’s magazine to come up with the line “like private equity only better”. See here for a fund profile.
An advantage the firm has over private equity, apart from the liquidity of the underlying portfolio of listed stocks, is that it rarely takes positions of more than 10 per cent in companies (at cost) and therefore does not pay a premium for control. It does, however, charge a bit like private equity: a 1.5 per cent management fee and 20 per cent performance fee for returns above the MSCI all-countries index.
