Interesting thread which I only just recently stumbled across. I look at LICs quite a lot, and see that some on the thread here keep an eye on the global LICs.
I have seen this year a few new one’s cash in on this space and raise money. Only in the last week I looked up some to see how they are currently trading, and saw that a Contango one and then one from Fat Prophets had versions trading at a premium to NTA. From what I understand the fees are not particularly cheap, and these two have had their controversies over the years with LICs.
On the other hand, there are some ones that have been around a few years trading at discounts currently, and were at large discounts at times over the last couple of years. They seem quite transparent on matters of corporate governance with proven track records. It appears because they are not “shiny and new” and the hype subsides from listing after the first year they invariable drift to discounts.
Wondering if anyone here holds or is buying the likes of the Contango or Fat Prophets one, or is getting their chequebook out for the new VGI (also a hefty ongoing base fee from memory)? Am trying to understand what may be driving the confidence to pay premiums or NTA for the newer breed. History shows you often get a better chance to buy in the secondary market. Are we that confident these guys will achieve better after fee performance than the likes of PM Capital, Platinum, Ellerston or the Future Gen Global Fund? Maybe I am missing something?
I blog about various investing themes but LICs comes up a lot for me, I just wrote about this topic yesterday. Here is a link if you are interested. https://stevegreeny.com/2017/08/17/time-for-global-active-managers-to-outperform-common-catalysts-for-lics/
