He specifically names Fat Prophets: "In our current LIC research universe, almost 50 LICs are trading at 10% or greater discounts... Around a dozen are trading at discounts of 20% or more. These include Bailador Technology, Morphic Ethical Equities, two Fat Prophets LICs and Blue Sky Alternatives Access."
He identifies a number of ways LICs can restructure to close the gap on NTA. I'm all in favour of these: "Since late 2018, we've seen a small but steady stream of LICs undertaking windups or otherwise restructuring to close the NTA gap.
Watermark was the first to kick it off, with proposals in December 2018 to delist two of their three LICs and convert them to unlisted funds. The transaction also offered investors the chance to exit at NTA. These transactions were completed earlier this year. Prior to the announcement of the transactions, both LICs had consistently traded at 15-20% discounts to NTA for some time. Investors who bought within a short period prior to the restructure announcement would have done very well. However, longer-term investors didn't fare so well, with the performance of both vehicles very subdued since listing.
Early in 2019, 8EC Emerging Companies (8EC) announced a wind-up proposal, with all investments to be liquidated and funds returned to shareholders. The transaction announcement came after sustained pressure from a major shareholder, following a reasonably long period of poor performance. The windup was approved by shareholders recently and will be substantially completed over the next two months."
FPC Price at posting:
88.0¢ Sentiment: None Disclosure: Held
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