Listed managed investments: Attractive distributions for Forager and Regal investors

Claire Aitchison

Independent Investment Research

In this edition of the IIR LMI monthly update, we take a look at the key news for the sector in June and provide the key data points as of 31 May 2022.

Some of the key news items include:

  • An expectation of attractive half-yearly distributions from Forager Australian Shares Fund (ASX: FOR) and Regal Investment Fund (ASX: RF1). FOR has indicated a half-yearly distribution of 7.5 cents per unit, while RF1 advised of a half-yearly distribution of 24.5 cents per unit. The actual distribution amount for both LITs is expected to be announced in early to mid-July.
  • Metrics Master Income Trust (ASX: MXT) has raised $187.3 million through the issue of 93.67 million new units to wholesale and institutional investors. Units were issued at $2 per unit. MXT had 879.2 million units on issue post the issue of the new units. Capital raised will be invested in accordance with the investment mandate and target return of MXT.
  • As announced on 14 June 2022, WAM Leaders (ASX: WLE) has entered into a Scheme Implementation Agreement (Scheme) with Absolute Equity Performance Fund Limited (ASX: AEG) for the merger of the two companies. The Scheme proposes that WLE will acquire 100% of the shares in AEG, with AEG shareholders receiving WLE shares as consideration.
    The merger comes after the announcement by AEG in February 2022, in which the Board advised it was evaluating a range of alternatives to maximise value for shareholders.
    The WLE board intends that the AEG shareholders who receive WLE shares will be eligible for the FY22 final dividend paid by WLE. AEG shareholders are expected to vote on the Scheme at a meeting scheduled to be held in September 2022.
  • Hamish Douglass will return to Magellan Financial Group (ASX: MFG) as a consultant, the co-founder set to resume working with the business in a consultancy role. In his role, Douglass will provide investment insights, including geopolitical and macroeconomic views. He ceased to be a permanent member of Magellan’s staff on 15 June 2022 and will commence the new role on 1 October 2022.
  • On 30 June 2022, Argo Investments Limited (ASX: ARG) announced Joycelyn Morton will be retiring from the Board, 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 the retirement, ARG has announced the appointment of Lianne Buck to the Board as an independent director. Lianne has more than 20 years’ experience in Australian and global investment markets, starting 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 Head of Direct Investments and Infrastructure. Lianne has a Bachelor of Commerce degree and is a member of the Australian Institute of Company Directors.
  • During the month, Alternative Investment Trust (ASX: AIQ) raised $2.76 million through the issue 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 31 May 2022.
    As disclosed in the announcement, the Trust is seeking to raise up to $3.2m as part of the Placement. In addition to the new units issued, at the upcoming EGM, the Manager will be seeking approval for the issue of approximately 4 million units to be issued to entities associated with the Manager.
    In addition to the capital raise, 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 18 November 2021.
  • Buy-Back Facility – AIQ intends to commence an on-market buy-back program. Under the buy-back, AIQ intends to purchase units if they trade at a discount to the adjusted NTA of the Trust.
  • 1 for 10 Unit Consolidation – At an Extraordinary General Meeting (EGM), which the Trust intends to call, the Trust will be seeking approval for a 1 for 10 unit consolidation. At the EGM, the Trust will also be seeking approval for a number of initiatives to give the Trust capital flexibility including a refresh of the Trust’s placement capacity.

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Claire Aitchison
Head of Equities & Funds Research
Independent Investment Research
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