Blackcrane Investment Process - A toe in the water!

According to their substantial shareholder notice Blackcrane hold a total of 105.433m Avita shares for an outlay of approximately A$36.929m and an average entry price of approx. A$0.35c. This position represents circa 3.6% of their current total funds under management of approx A$1.025b. From their stated investment process Blackcrane target 20-40 high conviction holdings and have a three stage process with stage 1. complete;

1. An Initial fund position of 1%-3% after building a full working model and conducting usual due diligence business checks (balance sheet, cash flow etc.).
2. A Full Size position for Blackcrane is 4%-6% and this will typically follow a mid-quarter/semi-annual review that confirms core driver assumptions and earnings conviction.
3. Black crane will increase their holding size to a maximum of 7%-10% based on their level of conviction.

On this information and based on Blackcrane’s current funds under management, to move from their current fund holding of 3.6% to 6% would require an additional investment of circa A$24.6m. To then move to a 10% fund positionn would requires a further investment of circa A$41m.

Remember that Blackcrane are just one institutional investor with more likely to follow post the looming Nasdaq listing!