Unitholders in AMP Capital's China Growth Fund (AGF) voted at yesterday's extraordinary general meeting in favour of LIM Advisors’ resolution to wind the fund up.
The resolution received the support of 54.45 per cent of unitholders, and LIM Advisors’ director and portfolio manager, Nick Paris, said he was delighted with the result.
"We took this action reluctantly as we had no other choice following repeated requests to AMP for an open-ended or unlimited redemption offers from AGF," Mr Paris said.
"However, we have pursued the wind-up option with the interests of all unitholders in mind and hope it serves as a lesson for AMP Capital as the Responsible Entity that unitholders will not tolerate large persistent discounts, sustained poor performance, excessive fees and weak corporate governance."
AMP Capital Funds Management chairman Adam Tindall told unitholders at the meeting that as the responsible entity, AMP Capital would “consider all options available” for the wind-up, but reminded them that a previous KPMG analysis indicated it could take more than a month for all funds to be distributed.
Mr Paris said LIM is “ready and willing” to work with AMP Capital to wind up the fund quickly, adding that AMP could look to implement a new fund for those AGF investors who want to maintain exposure to the Chinese market.
“We suggest that AMP offer an open-ended fund investing in China to those AGF retail investors who want to remain invested in China. AGF unitholders could elect to convert into this new fund either prior to the commencement of the winding up of AGF or afterwards with the proceeds already remitted back to Australia,” he said.
Mr Tindall acknowledged AMP Capital’s obligation to “act on resolutions validly passed by the majority of unitholders of AGF” and assured unitholders the company would endeavour to return capital as quickly as possible “within the parameters of doing business in China, and with consideration to any tax implications”.
“We will continue to work with [unitholders] over the coming months, keeping [them] informed of all material developments in relation to the wind-up,” he said.
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