Listed managed investments – Attractive distributions for FOR and RF1 unitholders – Claire Aitchison


In this edition of the IIF LMI Monthly Update, we take a look at the top industry news in June and provide the key data points as of May 31, 2022.

Some of the key news items include:

  • FOR & RF1 Estimate Attractive half-year breakdown: Forager Australian Shares Fund (ASX:FOR) and Regal Investment Fund (ASX:RF1) both released attractive semi-annual payout estimates. FOR announced an indicative semi-annual distribution of 7.5 cents per share, while RF1 announced a semi-annual distribution of 24.5 cents per share. The actual distribution amount for both SAIs is expected to be announced in early to mid-July.
  • MXT raises $187 million through placement with wholesale and institutional investors: Metrics Master Income Trust (ASX:MXT) raised $187.3 million through the issuance of 93.67 million new shares to wholesale and institutional investors. Units were issued at $2.00 per unit. MXT had 879.2 million units outstanding after the new units were issued. The capital raised will be invested in accordance with MXT’s investment mandate and target return.
  • WAM Leaders will merge with Absolute Equity Performance Fund: On June 14, 2022, WAM Leaders Limited (ASX: WLE) announced that it had entered into a Scheme Implementation Agreement with Absolute Equity Performance Fund Limited (ASX: AEG) for the merger of the two companies. The Scheme proposes that WLE acquire 100% of the shares of AEG, with AEG shareholders receiving WLE shares in return. The number of WLE shares issued will be based on the ratio of the pre-tax NTA of the two companies on the Calculation Date. The merger comes after AEG announced in February 2022, in which the board said it was evaluating a range of alternatives to maximize shareholder value. The WLE Board of Directors intends that AEG shareholders who receive WLE shares will be eligible for the final FY22 dividend paid by WLE. AEG shareholders are expected to vote on the Scheme at a meeting scheduled for September 2022.
  • Hamish Douglass back at Magellan as a consultant: During the month, Magellan Financial Group Limited (ASX:MFG), announced that Magellan co-founder Hamish Douglass would resume working with the company in an advisory role. In his role, Hamish will provide investment insights, including geopolitical and macroeconomic views. Hamish ceased to be a permanent member of Magellan staff on June 15, 2022 and will take up his new role on October 1, 2022.
  • Joycelyn Morton leaves ARG board: On June 30, 2022, Argo Investments Limited (ASX: ARG) announced that Joycelyn Morton would step down from the Board of Directors, effective immediately. Joycelyn has served on the board since 2012 and remains a founding director of Argo Global Listed Infrastructure (ASX: ALI). In light of Joycelyn’s retirement, ARG announced the appointment of Lianne Buck to the Board of Directors as an Independent Director. Lianne has over 20 years’ experience in the Australian and global investment markets. Lianne began her executive career in Canada as a Chartered Accountant before working in various roles for Macquarie Group, Westpac Banking Corporation, Hastings Funds Management and NSW Treasury Corporation where she was responsible for direct investments and infrastructure. Lianne holds a Bachelor of Commerce and is a Fellow of the Australian Institute of Corporate Directors.
  • AIQ raises $3.2 million through the placement and seeks to implement capital management initiatives: During the month, Alternative Investment Trust (ASX: AIQ) raised $2.76 million through the issuance of 25.1 million shares at a price of $0.11 per share to wholesale investors. The price of the new units represented a 5.7% discount to AIQ’s adjusted NTA as of May 31, 2022. As noted in the announcement, the Trust is seeking to raise up to $3.2 million under of placement. In addition to the new units issued, at the next EGM, the Manager will seek approval for the issuance of approximately 4.0 million units to be issued to entities associated with the Manager. In addition to the capital increase, AIQ announced the implementation of a number of initiatives, including:
    • Distribution Reinvestment Plan (DRP) – AIQ intends to reinstate the DRP for the upcoming distribution which has been suspended since November 18, 2021.
    • Buyback facility – AIQ intends to launch a buyback program in the market. In connection with the redemption, AIQ intends to purchase Units if they are trading at a discount to the Trust’s Adjusted NTA.
    • 1 for 10 Unit Consolidation – At a Special General Meeting (SGM), which the Trust intends to call, the Trust will seek approval for a 1 for 10 Unit Consolidation. AGE, the Trust will also seek approval for a number of initiatives to provide the Trust with capital flexibility, including a renewal of the Trust’s investment capacity.

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