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Monash restructures LIC to launch ETF: ‘We will not be the last’

By Neil Griffiths
 — 1 minute read

Monash Investors has announced a restructure of its LIC to launch an exchange-traded managed fund.

Debuting on the ASX on Thursday, the equities fund manager’s move received almost unanimous support from shareholders (99.98 per cent in favour) and has been restructured to Monash Absolute Active Trust (MAAT).

“Having a top performing fund listed at less than net asset value has been frustrating for our investors and ourselves as managers,” Monash Investors co-founder and portfolio manager, Simon Shields, said.

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“Many LIC managers have tried and failed at resolving this discount situation through buybacks and other strategies, but without success. Monash decided the clearest, simplest and fairest way forward for our investors was to restructure MA1 into an Exchange Traded Managed Fund utilizing the ASX AQUA rules.

“We are the first to do so, as far as I am aware, and I suspect we will not be the last.

“This restructure breaks the permanent capital nexus, which we are most comfortable with. We believe this restructure will not only benefit unit holders by providing appropriate fair value liquidity but will create a pathway for greater FUM given the inherent attractions of the fund.”

The news comes after Wilson Asset Management (WAM) founder Geoff Wilson launched his eighth LIC, WAM Strategic Value, with the IPO raising due to close on Thursday.

Speaking during a webinar last month, Mr Wilson said 80 per cent of the 100 or more LICs are trading at a discounted NTA.

“Obviously, we’d like to buy them at the biggest discount possible,” he said.

“That is a big market. We’re only managing about $53 billion. We’re only going to raise $225 million… we think $255 million is probably a sweet spot to start. It’s very manageable.”

 

 

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Monash restructures LIC to launch ETF: ‘We will not be the last’
 Monash founders Simon Shields (left) and Shane Fitzgerald (right)
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