Evans Dixon makes changes to Walsh & Co board
Dec 19, 2019 — 2.44pmWealth manager Evans Dixon has made several changes to the board of Walsh & Co, the wholly owned subsidiary that acts as the 'responsible entity' for 10 of its in-house managed funds.
The Walsh & Co changes, which include the appointment of two independent directors - Stuart Nisbett and Peter Shear - and the departure from the board of long serving Dixon Advisory executive Alex MacLachlan, are aimed at increasing the independence of the entity.
Mr Nisbett, a banker who previously held executive positions at ANZ, Rothschild, Macquarie and Lend Lease, will serve as independent chairman. Mr Shear is a the former head of structured finance at Lloyds Bank and was previously partner at Ernst & Young. Mr MacLachlan was previously the chairman of Walsh & Co.
Evans Dixon said the board changes meant the responsible entity would now have two independent directors and an independent chairman, alongside two non-independent directors.
The responsible entity, or RE, is an entity appointed to protect the interests of unitholders in a managed investment fund.
However, there have been several instances where the independence of REs that have ties to the fund manager has been questioned.
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But the company has had a difficult time as a listed company as the poor share price performance of its funds, that clients were advised to invest in, has raised questions about its vertically integrated model.
While Dixon Advisory provided advice to clients, it also earned fees from managing funds that it recommended to those clients.
In addition, Dixon Advisory provided other services to those funds, such as the RE function. In the case of the US Masters Residential Fund, Dixon Advisory's property development arm earned additional fees.
Shares in Evans Dixon had fallen by almost two thirds since listing last year.
Earlier this year, Alan Dixon stepped down as chief executive of Evans Dixon to focus on the ailing US Masters Residential Fund before stepping down from that role.
Evans Dixon also announced it would reinvest management and RE fees in units of two of its funds - the New Energy Solar Fund and the US Masters Residential Fund, or URF.
The equivalent of 10 per cent of the annual management fee of the New Energy Solar fund would be used to buy back those securities, while 20 per cent of the RE fee charged to investors in the URF would be used to buy back those shares.
Both NEW and URF are trading at discounts to their net tangible asset value as clients of Dixon Advisory have sought to dispose of their investments but have struggled to find willing buyers.
The management of the URF has also undergone a programme of selling its New Jersey residential properties to reduce its debts, while NEW has also said it would sell two US assets to reinforce the value of its portfolio.
These investments are both widely held by clients of Dixon Advisory.
