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Blue Sky mulls new management options

Blue Sky mulls new management options

James Mitchell
— 1 minute read

The troubled company has confirmed that Pinnacle is not the only group eager to run its fund.

Blue Sky’s decision to separate from its Blue Sky Alternatives Access Fund (BLA) and have the fund managed separately was announced late last week. The group even revealed that the fund will be managed by Pinnacle-owned Alterum Investment Management.

But now Wilson Asset Management is believed to be in the running as the new manager.

Blue Sky noted in an ASX trading update announcement of 18 October 2018 that it had reached an for the transition of BAF to a new manager and new investment mandate effective 1 January 2019, subject to shareholder approval.

“The board of the new manager will consist of two Pinnacle appointments and one executive shareholder,” Blue Sky said.

However, on Wednesday, the company confirmed that BAF’s non-executive directors received a proposal from Wilson Asset Management (WAM) be appointed as BAF’s new manager.

The fund has requested further detail regarding WAM’s proposal so that the board can consider that proposal and provide full details to shareholders in due course.

“BLA has received no communication from WAM. BLA will continue to update its shareholders in accordance with its continuous disclosure obligations,” the group said.

The news comes just one week after Blue Sky posted the financial results of a horrific year.

Blue Sky chairman John Kain, in a letter to shareholders, described the 2018 financial year as an ‘annus horribilis’ for the group.

“Our financial result has been dreadful, our reputation has been materially diminished and market sentiment has collapsed,” he said

“Notwithstanding this, we have maintained the confidence and support of our institutional investor clients and our team. The importance of this cannot be overstated, as it is our team and our investor clients who, together with a restructured business model, are the key foundations to turning around our financial performance, and over time, our reputation.”

Mr Kain acknowledged that the Glaucus report, released in March, had significant ramifications for Blue Sky. This led to a number of senior personnel changes in the last six months and a strategic review of the entire business. Glaucus Research, a California-based hedge fund and short-seller, alleged Blue Sky had materially overstated its fee-earning assets under management (FEAUM).

Mr Kaine said the Glaucus report and its associated short selling campaign “destroyed market confidence in Blue Sky.”

In FY18 Blue Sky revenues fell 63 per cent to $24.9 million, while NPAT plummeted 436 per cent. Blue Sky’s profits, cash flow and EBITDA are all firmly into the red by tens of millions of dollars.

 

Blue Sky mulls new management options
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