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.
Series’ small-cap LIC portfolio rides SIV wave
Kerry Series
Small caps don’t need an extraneous boost to their attractiveness as an investment, according to Kerry Series. But he will happily take the recent extra interest from overseas investors under the new Significant Investor Visa arrangements. Here is the offer for his first LIC.
The Government changed the rules, effective July 1, in which those wealthy individuals overseas – mainly from China – can invest their A$5 million to get a resident’s visa. At least $1.5 million of it now has to be in listed Australian emerging – small-cap – companies.
Furthermore, the Government has also closed the loophole, deftly exploited by Macquarie Bank and others, whereby SIV applicants could buy commonwealth bonds and then be loaned back 90-or-so per cent of their $5 million to buy a house. Under SIV rules you cannot directly invest in owner-occupied residential real estate, which is a favourite of the Chinese in particular.
Series, a founding partner of Eight Investment Partners, who was also one of the founders of Perennial Investment Partners and an Asian equities expert, last week launched his first prospectus for Eight Investment Partners.
For a $50 million small-cap listed investment company, Eight IP Emerging Companies (8EP) is already on a roll. Series, the founder and chief investment officer, recently doubled his funds under management to about $115 million through a mandate from Colonial First State and has a pipeline of several other institutions under negotiation. Stephen Walsh, his business partner, is portfolio manager.
The firm’s main concentrated strategy has returned an impressive 63 per cent, annualised, since inception, net of fees, albeit with a relatively small fund size to take advantage of. It’s this concentrated strategy to which the new listed fund will be managed.
