Thursday, June 16, 2005 A NEW fund targeting emerging resources companies has lodged its prospectus for a $20 million IPO with the Australian Securities and Investments Commission.
If its capital raising runs to plan, EIM Resources hopes to list on the Australian Stock Exchange and use the $20 million, from an offer of 20 million shares at $1 each, to invest in a portfolio of between 20 and 25 companies spread over a group of commodities.
The fund is banking on the intellectual capital within its investment team to provide its competitive advantage.
That team includes Macquarie University mineral economics professor Donald Barnett, University of Newcastle professor Philip Seccombe, mining company director Nick Moony and investment strategist John Robertson.
Besides its investment team, the fund also boasts a director line-up with Nustar Mining chairman and Red5 and Terramin director Colin Jackson as its chairman. The other two directors – Tony Wiggins and Doug Goodall – have financial and resources industry pedigrees and are also on EIM's investment team.
Robertson said that team meant EIM would not have to rely on other people's research.
"We're self-contained. We have the intellectual capital to carry it off," he said.
EIM has already combed through the 120 companies on the ASX that meet its criteria and culled that back to a 50-company list. It is in the process of refining that list down to its 20 to 25-strong portfolio.
Robertson declined to mention any companies EIM was particularly interested in.
He said the final portfolio would be based on "the cheapest stocks from that 50 based on long-term commodity prices".
"We're looking for companies that have a resource, have the people and are ready to go."
So is there room for a fund focusing on emerging resources players? Robertson certainly thinks so.
"When you look at the last 10 years a lot of the larger broking houses have cut back their analytical forces to concentrate on BHP Billiton and Rio Tinto," he said.
"There have been some small cap analysts and funds come in but they've mostly been in the industrial area. There have also been a number of small resources companies come to the market but they've been exploration driven. This segment has missed out.
"The message we've had from the large international broking houses is that they are crying out for analysis of this area."
Robertson said the key people in EIM had all worked together at some stage in their careers.
There appears to be a strong McIntosh & Company (which was later taken over by Merrill Lynch) link between EIM's key players but Robertson downplayed that as a catalyst for the company coming together.
"People with a capital markets background, if they are older than 40, probably have a link to McIntosh. We've all gone on and done other things but we're all familiar with each other."
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