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IPO : L1 long short LIC, page-31

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Cavman1960

12 Posts.

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28/03/18

10:20

Post #: 32079931
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Originally posted by Occam Logic ↑

Let's be realistic. Many of the recent managers of unlisted funds that are moving to LICs are making a business decision. LICs are essentially captive money in terms of their ongoing fee revenue to the business. Managed funds, with their open-ended structure, are not. While the managers will usually claim that pushing into the listed space is a way to broaden their investor pool (i.e. those who do not wish to use wraps or platforms or invest in a managed fund directly due to generally higher fees and minimums), don't forget the commercial imperative. Fee pressure in institutional mandates and retail funds continues apace. LICs are arguable the last bastion of 'full freight' fees.

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I would argue the two types of LIC present different stories. The older established funds eg ARG, AFI, MLT etc who charge less than 0.2% MER are a far cry from most of the new kids on the block with fees around 2% plus "performance" fees etc. The older established funds are much like the Buffet way of thinking and sleep at night assets!
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