In an unusual and opportunistic tax-effective investment, a group of fund managers has launched the ‘Armytage Global Disruptor Fund’, which is sitting on about $145 million in tax losses. They are seeking to raise about $500 million from new investors for the closed-end fund by mid-December.
The tax losses, which arise from a former failed business, will expire from a recoupment perspective in five years. As the promoters say: this is a rare opportunity.
The money raised will be invested in a range of global equities strategies, to be managed by four experienced portfolio managers: Lee laFrate, who is the executive chair and founder of Armytage, Bradley King, with whom he has worked for about 15 years, David Stevens, the founder of Contango Global Funds, and Julian Mitchell, a former investment director of Lowell Asset Management.
Given the tax offset, the fund will effectively start with a 1-2 per cent head start over competitor global equity funds. One of the strategies, which will give the fund an additional edge, is a small and mid-cap tilted portfolio.
Lee laFrate, who was a co-founder of Treasury Group, now known as Pacific Current, said last week that 45-60 per cent of the new portfolio would be within the ASX 100, another 15-20 per cent in global, managed by David Stevens, and the rest would be more opportunistic including “fallen angels, lost dogs and stocks with a discount to instrinsic value”.
He said: “The house of Armytage has a lot opf history in the opportunistic space.”
“This is a once-off free kick for investors,” he said.
Greg Bright is publisher of Investor Strategy News (Australia)