Another Australian listed investment company (LIC) is pitching to the NZ market under trans-Tasman mutual recognition rules as part of a drive to raise up to A$500 million.
However, the ‘Hearts and Minds Investments’ (HM) LIC is a unique collaboration between a raft of well-known Australian fund managers – including Magellan and Paradice Investment Management – with a charitable purpose.
Under the HM model, up to 15 fund managers – including five core firms and a revolving menu of 10 ‘conference’ managers – would supply a handful of top stock picks that would make up the portfolio.
“The intention of the Company is to provide Shareholders with a compelling and attractive investment proposition by utilizing the highest conviction recommendations of a select group of Fund Managers in order to maximise shareholder returns over the long term (being five years or more),” the HM prospectus says.
As well as Magellan and Paradice, the HM core managers include Caledonia, Cooper Investors and Regal Funds Management. The remaining 10 managers would be selected from those who present at the annual Sohn Hearts and Minds Investment Leaders Conference – a fund-raising event which has been running for two years.
The HM portfolio would consist of about 25 Australian stocks, with 60 per cent based on the quarterly picks of core managers and the remainder supplied by conference managers.
All HM investment fees would flow to “leading Australian medical research organisations in order to support the development of new medicine and drive a new generation of medical research in Australia”.
The underlying charities may change year-to-year – as selected by the five core managers and the board – with the exception of the Victor Chang Institute, which would receive 40 per cent of the donated amount each year.
Named after a well-known Sydney heart surgeon, the Victor Chang Institute has also agreed to stump up for the HM listing costs of up to $7.5 million, which will be recouped from donations ahead of flows to any other nominated charities.
While the HM offer – due to open on October 15 – is not underwritten, a group of high-profile Australian families (including the Packer, Myer and Lowy clans) have committed A$150 million to the float.
Chris Cuffe chairs the HM board that also includes a couple of ex-pat NZ directors, Geoff Wilson (founder of Wilson Asset Management) and long-time Ron Brierley associate, Gary Weiss.
The HM launch follows another Australian LIC offering to the NZ market under the trans-Tasman mutual recognition regime, the Firetrail Absolute Return fund. Firetrail, managed by the former Macquarie equities team now part of the Pinnacle stable of managers, is seeking up to about $300 million in the long-short LIC due to close off near the end of October.
Last week the ASX-listed Pinnacle added another Australian equities manager to its multi-affiliate roster in the shape of Longwave Capital Partners, headed by former Schroders portfolio manager, David Wanis.