Ann: Results of Annual General Meeting 2017, page-9

AFU
There are a small band of investors who agree that it is amazing that 65% do not vote when their investment is being totally changed from a long race Melb Cup, to a Sydney Golden Slipper dash and smash. A Further 750k vote by abstaining. And change of name only passed on the open proxies to Chair ( Independent Chair he claimed?).

A correction of your history. Yes the Boo- Boo employment was a bad decision. But there had not been new mandates before he arrived. And definitely no insto ones in the 18 months after he arrived until the sale of CAML to CGA in June 16. And the 12 month CTN performance to June 16 was good.

Independent due diligence at the time showed the $13m sale price was very reasonable, given under $1m net cash flow, and no recent growth in FUM -$672m at the time. Revenue running at $5.2m pa

Under CGA, FUM got as high as $750m with Rev up to $6.7m. Expenses quickly blew out to $8.2m pa And Micro performance deteriorated, and eventually in 2016 collapsed. Rev was back round $5.2m when BooBoo departed ( Expenses sill over $8m).

CGA may have had a market value as high as $85m in 2016, but really, was it ever worth more than the $13m. The rest was hope of future growth ( the next Magellan, according to Australia's Buffet). And "fairy stories". And now, with just over $300m FUM, and revenues under $2m - with two thirds of FUM on shared fees with Switzer or the US manager - and the largest mandate sold ( some 42% )?

And now the cash from NAOS. $2m upfront, and another $10.5m over 10 years. At today's discount rates, PV of say $10m. Have trouble getting an independent valuer setting a total value above the original purchase price. IE 25 cents a share?

Note every new mandate means more back office somewhere?

So the majority Board Members selling in 2016, were the same majority in Feb 2017 when OC Funds were appointed. And showed aMicro manager could easily outperform CGA. Almost anyone could at that time! But OC did it well - between 6 and 8% above in 4 months. So they had to go!

The latest Board did not have to accept the CGA/ NAOS deal. The due diligence to appoint OC would have easily found a multiple of managers of Micros who could have rescued CTN , with no payments to the failed CGA ( as CGA announced on 27th Oct ).

But the Board ( now minus Kerr- presumably this deal was too "rich" for him ) decided to overlook past Directors due diligence, and welcomed NAOS and their Directors, but not as Micro managers

No, the all seeing Board then decided they knew better than their shareholders - that shareholders actually wanted High Coviction Smalls - not silly old Micros. Micros are so "old hat". O, and by the way NAOS don't do micros !
But their most significant investment is in CGA - - a Micro! Not a great recommendation of their style, and oversight.

No matter. A major telephone and PR campaign at Company expense will fix that.

And as for the reduction in fees from 125bp to 115bp. It does not exist! CGA were not charging any fees on the approx $30m retrieved from OC (with CTN shareholders still paying OC for the next 5 years ). So it is no reduction at all. Even worse, a Performance Fee is introduced, so the hope is "better returns" will reward NAOS even more?

So where are the regulators? Probably Saying - well the shareholders voted to approve their own demise? But is that the full extent of our lauded Regulatory Systems.

Interestingly, the Yes votes are not too different numerically both in March and November. Might suggest the same hangers on ( living off the crumbs from the LIC table ) were again out in force as "trusted advisors" getting those official looking proxies signed by inexperienced investors.

Interestingly, at yesterday's AGM how often the Chair referred to "considerable due diligence".
Particularly given the VERY short time between the start of market whispers of "a deal being considered by CGA re it's terrible performance record, Kerr's resignation on 20 Sept, and the announcement of the NAOS deal by CGA ( not CTN ) on 27 October

Must have had lots of people involved day and night to discover NAOS was the best option - not least for NAOS and NCC shareholders.

Quoted nos and comments come from official releases, and quotations from public forums hosted by CGA, NAOS and CTN.

But do your own research!