The annual report does not contain an exhaustive list of all...

The annual report does not contain an exhaustive list of all their positions. This LIC was created apparently to mirror an unlisted fund. Noone has any idea what the unlisted fund was truly carrying. My guess is it was carrying illiquid securities. The fund had an open mandate and could pretty much trade whatever it wanted. It's pretty suspicous that they suddenly volunteered to return $700m to unlisted unit holder because the fund was too big! Wouldn't it have been easier to just not upsize the LIC in the first place!! 

As for the managers taking a fee reduction, you got a better chance finding a one legged ballerina! This thing is now trading a discount coz everyone knows its now gonna be squeezed dry by the managers. Given there is no incentive now to actually manage the money surely the directors of LSF should be advising a change in manager.