AFR
Monash Investors converts LIC to ETF
Richard Henderson
A listed investment company run by Monash Investors will convert into an actively managed exchange traded fund tomorrow in the first such switch in Australia, adding pressure on the LIC structure.
The Monash Absolute Investment Company, known by the ticker MA1, will trade as Monash Absolute Active Trust, or MAAT, from Thursday, following near total approval from shareholders for the switch.
The change comes after the fund manager attempted to close a gap between the LIC’s net assets and the market value implied by its share price - a painful gap facing a number of LICs.
“Many LIC managers have tried and failed at resolving this discount situation through buybacks and other strategies, but with without success,” said Monash Investors co-founder and portfolio manager, Simon Shields.
“Monash decided the clearest, simplest and fairest way forward for our investors was to restructure MA1 into an exchange traded managed fund utilising the ASX AQUA rules,” he said.
Other LICs facing shareholder pressure to tweak their structures include VGI Partners Global Investments, an international equities strategy that has failed to close a chasm between its assets and its share price.
The gap has prompted intervention by activist investors Malcolm McComas and David Kingston, who have agitated for change over the past few months after building up a stake in the investment vehicle.
(20min delay)