MEDIA RELEASE – 8 April 2014
PM CAPITAL eyes ASX listing for Asian Opportunities Fund
Sydney-based specialist equity fund manager, P.M. CAPITAL Limited, today said that it believes there will be strong demand from investors to participate in the initial public offering of a second listed investment company (LIC); the PM CAPITAL Asian Opportunities Fund Limited (Offer).
CEO of PM CAPITAL, Chris Donohoe, believes that opportunities to invest in Asia via the Australian Securities Exchange (ASX) are limited, although demand in the space is on the rise.
“Australia accounts for less than ten per cent of the Asian Region (ex-Japan). A reallocation to more exposure to Asian equities will allow investors to strengthen their portfolios with greater diversification and exposure to industries not well represented on the ASX.”
“Additionally, with the moderation in China’s demand for commodities, and Australian banks trading at historically elevated levels and at a significant premium to global peers, we believe it is difficult to find value in the Australian market.”
Kevin Bertoli, Portfolio Manager of the PM CAPITAL Emerging Asia Fund said; “Economies in Asia are evolving, with a reduced reliance on fixed asset investment, such as infrastructure, in favour of domestic consumption.”
“We believe some of the best long term opportunities we are identifying globally are within the Asian (ex-Japan) Region. We find genuine value in industries that are supported by rising domestic consumption levels or that are benefiting from changes to consumer consumption patterns. We believe the evolution of more than four billion consumers in the Region creates a large investment opportunity.”
“As this transition gathers pace, the reliance on investing in the Australian market as a way to gain access to Asia’s economic success story will diminish.”
Mr Bertoli said PM CAPITAL’s intensive company analysis allowed it to identify good businesses and avoid many of the dangers that plague the region.
“PM CAPITAL has taken a differentiated approach to investing in Asia for Australian investors. Most other offers rely heavily on the current macro-economic backdrop and are quasi-index focused, rather than following a fundamental bottom-up stock picking approach.”
The high conviction formula has seen the PM CAPITAL Emerging Asia Fund deliver a total return, since inception in 2008, of more than 202.3%, which compares favourably against the MSCI Asia (ex Japan) Equity Index (Net Dividends Reinvested, AUD) total return of 19.0% (as at 28 February 2014).
The PM Capital Global Opportunities Fund Limited successfully raised over $170m in December 2013 and its combined Share and Option package is trading at a premium to the initial entry price.
Mr Donohoe said there are only a small number of LICs in Australia investing in Asian equities.
“Our discussions with brokers indicate this IPO should attract good interest. They have strong support for our Asian equity LIC, expressing a preference for offshore LICs that add value to their client offerings, as opposed to the more conventional Australian equity LIC’s.”
PM CAPITAL has appointed Ord Minnett Limited to act as arranger and joint lead manager to the Offer. CBA Equities Limited, Morgans Corporate Limited, and Taylor Collison have been appointed as the other joint lead managers.
As at 28 February 2014, the PM CAPITAL Emerging Asia Fund has achieved a 12 month return after fees of 42.4%; a 31.0% excess return compared to the MSCI Asia ex-Japan Index (Net Dividends Reinvested, AUD).
PM CAPITAL is a Sydney based equity and income fund manager who manages in excess in A$1.7 billion in funds on behalf of private clients, the clients of financial advisers and institutional investors.
+61 414 621163
About PM CAPITAL
PM CAPITAL is an Australian based specialist equity and income fund manager for private clients, financial advisers and institutional investors. The firm is wholly owned by its staff who are also substantial unitholders in the same funds offered to clients. It is focused on achieving absolute after-tax returns. Each fund holds concentrated number positions of intensely researched companies trading below their long term intrinsic value.