PMC restructure not proceeding as L1 looks to take over management of portfolio

In this edition of the IIR LMI Monthly Update we take a look at the key news in July as well as the performance of LICs and LITs over the FY25 period. See the attached report for the analysis of performance and potential investment opportunities. 

Key news items included:

Platinum Capital Limited (ASX: PMC) announced on 5 August that it is withdrawing the proposed restructure via a scheme of arrangement with Platinum International Fund Complex (ASX: PIXX). The decision was made given the anticipated voter turnout and the notification of L1 Capital and its associates to vote against the scheme, resulting in the Board believing the proposed scheme would not meet the 75% approval threshold required.

The Company also announced that it has received a non-binding indicative proposal from L1 Capital for the management agreement with Platinum to be terminated and for the Company to enter into a new management agreement with L1 Capital. 

Under the new agreement, the portfolio would employ L1 Capital’s Global Long Short investment strategy, which is substantially the same as the strategy employed for the L1 Long Short Fund Ltd (ASX: LSF) without the geographic constraints. The indicative proposal by L1 Capital was accompanied by a notice requiring the Company to convene a meeting to consider resolutions to appoint three new directors to the Board.

In the event the new directors are appointed, Margaret Towers and Ian Hunter intend to resign from the Board. The Board following the requisitioned extraordinary general meeting will assess L1’s proposal regarding the management agreement.

While some investors may welcome the change in strategy and manager given the continued relative underperformance of the portfolio, there will no doubt be some unhappy investors with many banking on an exit around NTA via the scheme.  

Australian Foundation Investments Limited (ASX: AFI) announced its FY25 results on 28 July 2025. NPAT was down 3.9% on the pcp to $285 million driven primarily by a fall in the dividend and distribution income received.

The investment team are cautious of continued market uncertainty with the outlook for economic growth unclear. The team stated that corporate earnings appear set to slow with revenue growth being harder to achieve with the expectation that the market will have little tolerance for earnings misses. 

Pengana Private Equity Trust (ASX: PE1) announced in its monthly report for June that it had cash to commence the previously announced buy-backs. At the end of June, six of the Trust’s primary fund positions were purchased in the secondary market at 98% of NAV, providing cash for the buy-back. 

The Trust has been clear with its intentions, previously stating that it was prepared to materially reduce the size of the Trust to remedy the discount.

WMX Pays Inaugural Dividend & Seeks Approval for Placement

The Company raised capital in the height of the market volatility earlier in the year which resulted in the Company raising less than it set out to raise, although in IIR’s view did well to get the IPO away given the market conditions. Demand for the strategy has been strong with the Company being well bid to date. The Manager is keen to grow the Company with the Company convening an Extraordinary General Meeting (EGM) to gain shareholder approval for the issue of up to 75 million shares to sophisticated and professional investors.

ARG Declares Record High Dividend

The Company declared a record high final dividend of 20 cents per share, fully franked. This takes the full year dividend for the FY25 period to 37 cents per share, fully franked. The Company stated “given the continued growth in Argo’s franking balance and recognising that imputation credits are more valuable in our shareholders’ hands, the Board decided it was appropriate to meaningfully increase the final dividend.” The Company also stated that it “is focused on sustainably growing fully franked dividends and for the foreseeable future accelerating the distribution of accumulated franking credits.”

AMH Declares Special Dividend on the Back of Realised Capital Gains

After a strong FY24 and a strong 1H’FY25, the portfolio softened in the 2H’FY25 as a number of stocks in the portfolio lagged the broader market and IEL weighed on the portfolio. This combined with the underweight exposure to the major banks and gold saw the portfolio lag the broader market over the FY25 period.

RF1 Updates Investment Guidelines

The limit for a single unlisted security position increased from 2% of NAV to 3% at the time of investment and the maximum exposure of direct investments in unlisted securities increased from 5% to 25%.

The update to the guidelines comes after the Fund stated that an unlisted position within the Emerging Companies strategy in ATI Global had been revalued upwards on the back of strong growth.   

In July, Staude Capital Global Value Fund Limited (ASX: GVF) completed the Share Purchase Plan (SPP), with the Company raising $18.19 million under the SPP. The SPP combined with the Wholesale Placement saw the company raise a total of $35.1 million with the issue of 26.2 million new shares.