Avoid a Clayton's buyback and set expectation of share price trading at NTA, page-16

…..I'm also not interested in a tit-for-tat with you Cutty….just pulling you up on a number sweeping or poorly written statements…

Clearly your statement….”Ideally, I would hope Ophir opens their funds management business to retail investors”….is not 100% correct… Ophir opened the High Conviction Fund to Retail Funds via the ASX listing……clearly Ophir has not currently opened ALL their existing Unit Trusts to Retail Customers.


You might be interested to know when Ophir Management was canvassing existing High Conviction Unit Holders in mid 2018 (which had been closed to new investment since early 2018) about the positives of converting the Fund to an ASX Listed Investment Trust……the Unit Holders were told there were two key benefits in the ASX Listing.
I quote from an open Letter by Ophir Management to Ophir Unit Holders….

1. “The ASX-listing will provide a mechanism whereby existing unit holders, staff and new investors will again be able to purchase units in the Fund.Most importantly, this can be achieved without impacting the current capacity, or size of capital, being managed within the Fund.

By listing the Fund on the ASX as a closed-ended vehicle, investors will be able to purchase units in the Fund via the exchange, assuming existing unit holders are willing to sell them. The amount of units on issue therefore remains fixed, meaning the amount of capital being managed within the Fund also doesn’t change.

While we have certainly been humbled with the continued demand from both existing and new investors to access the Fund, ensuring the capital managed within the strategy stays at a size that is optimal for long term returns is always our priority.

Again, assuming existing unit holders are willing to sell their existing units, the listing will enable individual investors and private wealth groups to again be able access the Fund.


2. While we have certainly been humbled with the continued demand from both existing and new investors to access the Fund, ensuring the capital managed within the strategy stays at a size that is optimal for long term returns is always our priority.

Again, assuming existing unit holders are willing to sell their existing units, the listing will enable individual investors and private wealth groups to again be able access the Fund.

In the case of more severe market movements or redemption activity, managers can be forced to sell underlying portfolio holdings to provide the cash required to meet investor redemptions, often at sub-optimal prices. This selling will likely occur when the manager would instead prefer to be deploying capital into the market and taking advantage of the attractive opportunities available.

This obviously isn’t an ideal outcome for investment performance. Raising high levels of cash and selling portfolio positions at a time when asset prices are depressed and the risk/reward equation is materially skewed in our favour runs in complete contrast to the investment objective of the Fund.

Given we have all our own liquid assets in the Fund, we want to ensure our capital is in a structure that can benefit from those distressed situations (and ultimately have the ability to purchase stocks from those that are being forced to sell to meet investor capital calls).

When markets are on sale, it is only those with capital available to deploy that will be able to extract the full benefits for their investors. By converting to a closed-ended investment vehicle, the amount of units within the Fund will be fixed and the amount of capital available to invest will not change significantly.

As the Fund will no longer be required to provide ongoing liquidity to meet redemption requests from Unit holders, we will be able to fully deploy the capital available as opportunities present themselves”.

Ophir Management also stated “we wouldn’t want to rule out converting the Opportunities Fund as it would be able to take advantage of the benefits outlined”.

Unit Holders were told that Ophir Management….”favour the closed-ended structure and feel it creates the best possible environment to generate long term out performance”.




Clearly at present there is still a gap between the NTA of the High Conviction Fund and the the listed OPH ASX unit price.

The current buyback is aimed to close this gap. Time will tell if the strategy has been successful and whether out performance via the ASX is achieved.