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‘Losing serious money’: WAM moves to replace fund manager

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Wilson Asset Management is facing a number of challenges as it once again tries to replace a Sydney-based fund manager with links to Keybridge Capital.

The directors of Wilson Asset Management have called for a general meeting with the aim of removing Aurora Funds Management as a responsible entity for one of its funds.  

In a statement to the ASX the directors of WAM Capital, WAM Active and Botanical Nominees have requested to convene a general meeting and a notice of intention to remove Aurora as the responsible entity (RE) of its HHY Fund. 

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The members, Geoffrey Wilson, Linda Vo and Katherine Thorley have requested that Aurora calls a meeting of the members of the HHY Fund to consider and vote on the resolution. 

This is not the first time that Wilson Asset Management has moved to replace Aurora as the responsible entity. WAM founder, chairman and chief investment officer Geoff Wilson told Investor Daily that the group has previously had the votes to change the RE.

“When you look at the performance of the fund when we last tried to change the RE I think the NTA was trading around 12 or 13 cents and now it’s about half that. The only reason the RE didn’t change last time was that Aurora used one of its other vehicles and made a bid,” he said. 

In 2016 a vote to replace Aurora as RE of the HHY fund was narrowly defeated with 33.9 per cent of proxies voting against the proposal versus 31.4 per cent voting in favour. 

“Shareholders would probably have preferred that the RE had changed at that time. Aurora has stood over everyone losing serious money over the last three to four years,” said Mr Wilson.

The members are asking for Aurora Funds to be removed as the responsible entity of HHY Fund and if that passes to accept primary securities as the new responsible entity. 

The deadlock for the removal of Aurora will come from the other major stakeholder in the fund, Keybridge Capital. 

Keybridge Capital, Aurora Funds Management and Wilson Asset Management are all major holders in the HHY Fund but there is currently bad blood lying between Keybridge and Aurora.  

Keybridge Capital recently commenced a lawsuit against Aurora, which it bought back in 2015 before selling it off a year later.

Aurora Fund Management has been determined to disassociate itself from its former owner except that its major shareholder Nick Bolton has also just come back on as chief executive of Keybridge Capital. 

Mr Bolton was banned by ASIC from acting as a company director for three years back in 2015 for his part in the failure of 13 companies.

Mr Wilson said that Mr Bolton’s return may cause some unit holders to question who was managing the HHY Fund and what was best for their value. 

“The question that unit holders have to ask themselves is if they want an RE that is majority owned by someone that has been banned by ASIC from managing companies in Australia,” he said.

Mr Bolton is not the only one with ties between Aurora and Keybridge. Both director John Patton and Jeremy Kriewaldt have ties to Aurora. 

Mr Patton is also a managing director of Aurora and was unwilling to voluntarily put himself up for re-election at a Keybridge convened spill meeting, having previously stood down as board chairman. 

Keybridge recently made a move to expel the Mr Patton and Mr Kriewaldt with a notice to the ASX calling for a general meeting to remove the duo from office as director of the company. 

The ASX notice explained that the board of Keybridge was deadlocked on a range of significant matters relating to the ongoing operation of the company.

 

 

 

‘Losing serious money’: WAM moves to replace fund manager
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Eliot Hastie

Eliot Hastie

Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms. 

Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.

Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).

You can email him on: [email protected]

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