Wilson Asset Management has lodged a requisition to have shareholders vote to replace the board of the Hunter Hall Global Value fund.
The requisition outlines a number of concerns regarding the fund, including its continued underperformance and the “governance crisis” caused by Peter Hall’s sudden resignation from the board and the fund’s parent company Hunter Hall Limited (HHL).
Wilson Asset Management (WAM) chair Geoff Wilson also said in the requisition that the Hunter Hall Global Value (HHV) board’s refusal to offer shareholders an equal access share buyback at net tangible assets was unfair to shareholders, reiterating comments made when he first proposed replacing the board.
“We strongly believe shareholders, as the owners of listed companies, should be treated with respect. This has not been the case with Hunter Hall Global Value Fund for a long time,” he said.
“We are calling a meeting of shareholders to replace the existing HHV board with a completely independent board that will allow all shareholders to choose between remaining invested in the company or exiting at fair value following the shock departure of Peter Hall.”
The requisition was lodged the same day that HHV released its half-year financial report, which showed the fund’s returns after fees had underperformed its benchmark.
“HHV’s investment objective is to generate positive absolute returns in excess of the investment portfolio’s benchmark over an investment horizon of five years – at 31 December 2016, the five-year investment performance was 15.7 per cent per annum; the MSCI World returned 18.4 per cent for the corresponding period,” the company said.
“The HHV five-year gross return, before management fees, corporate expenses and taxes paid, was 18.5 per cent per annum.”
Earlier this week, Washington H. Soul Pattinson and Pinnacle Investment Management both increased their bid for the fund’s parent company HHL, however both offers remain below the company’s current share price.
Speaking to InvestorDaily, Pinnacle Investment Management managing director Ian Macoun said their bid for the company would not be affected by WAM’s push for a share buyback, but that concerns around its governance and funds under management had contributed to the discounted offer Pinnacle made for HHL.
“Our $2 per share offer is unconditional, so [the proposed share buyback] won’t affect that offer, but you asked me why our offer is at the price that it’s at, and of course that’s one of the issues,” he said.
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