I had a great time Thursday night, very well put together event and opportunity to meet some very savvy and high profile investors.
Stu was almost late because he had come from a presentation to Brokers and they must have liked it because they sent Stu and Sam straight across the road to present to one of Australia’s wealthiest families.
Stu spoke for about 15 minutes on his worldview of the markets and what’s happening right now. He was as jaw droppingly forthright as he always is and for most people there, this was all new. Fund managers just don’t talk like this making strong statements about the market, the Peso, the Pound, the ASX and so on.
After the show wound up about 10 investors remained for a private conversation with Stuart and Sam for an hour or so.
I also got to speak with the organiser of the event Boyd Peters of Investment Company Services. He does Investor Relations for fund managers like Stuart and takes them on the road to see the brokers and advisers, gives them strategy and advice, gets LICs share prices up etc
He said he’s worked in fund management industry for 20 years and seen some real pirates. I asked him if he thought Stuart was a pirate but he said fund managers who give $2m of performance fee back aren’t pirates. Henry Morgan and Hornigold were Knighted and Governor of Jamaica etc, they were privateers rather than the bloodthirsty type. But then he said if anyone hasn’t translated the Latin on the front page of the prospectus they should (mors inimicus).
Also apparently the sword on the back page of the BHG prospectus is a 17th century cutlass that Stu owns. Pretty cool.
Word is getting around and he said almost every broker and fund manager in Australia is becoming aware of Henry Morgan Limited through their performance and strong market calls. He explained that fund managers don’t make calls because they are afraid of their peers saying a year later well weren’t you stupid saying this or that….. So they don’t.
He said funds management for most managers is about avoiding underperforming their index. They lose more clients if they underperform than they win when they over-perform, so the big name fund managers are all phonies and geared towards not underperforming, they just replicate the index with some small stock and sector tilts. He said the boutiques are the ones you put your money in and they consistently beat the market, the others are just a front for the banks who own them to make money by flogging their products through their aligned financial adviser network to put on their investment wrap and master trust platforms. An Index Fund is cheaper than them, An ETF cheaper than them, and an LIC cheaper again. There is nothing wrong with paying for an active manager, but you want outperformance for that cost.
When they did the HML IPO last year brokers were sceptical of his previous performance and said if he can do it why does he need an LIC. Answer is that the most scrutinised performance data is for an ASX listed company and there is nowhere to hide it is fully transparent, plus he has big growth plans. So to pull off another 100% portfolio return in the first year has confirmed to a lot of people he is the real deal.
As for BHG, the prospectus is still in exposure period at ASIC so they cannot accept applications, and we will know when it is open because there will be buttons on the website for each of JBL shareholders, HML shareholders and the General Public to apply.
Also yes there will be BPay and electronic processing. If we know our shareholder number, the on-line boxes should be all pre filled for us, so the whole process should be pretty simple.
By the prospectus the noted Open date is the 29th
Apparently feedback is very strong. He has worked with plenty of LICs before and never seen anyone limit the over subscriptions on an IPO. Anyone doing that must be committed to performance and not fattening their own wallet.
He also said he doesn’t know how they will allocate- for instance first one’s opened or scale backs - that is up to other people to do by the book.
He suggested that if I apply for shares I should email him and he’ll make sure that the application has been received and doesn’t get lost in the system.
He didn’t mind if I put his email address on here anyone can contact him he is happy to talk about LICs .
