For high-profile fund manager Geoff Wilson, the philanthropic idea had been in the back of his mind for about two years.
But it was a meeting in April at 1 Knightsbridge Green in London with Tom Henderson, a director of the Battle Against Cancer Investment Trust (BACIT), that really set the wheels in motion for Wilson’s own plan. BACIT was a good example of what Wilson wanted to set up in Australia, a listed investment company (LIC), with a dual purpose. It would bring together a raft of local fund managers to focus on making investment returns coupled with a contribution to children’s charities.
Wilson utilised the shell of the Australian Infrastructure Fund, which was being wound down, and turned to some long-standing advisers to gauge their views on a backdoor listing.
In April, Wilson made an important phone call to long-standing adviser and Taylor Collison director Hamish Nairn.
Among other transactions, Nairn had aided WAM Capital in its merger with Premium Investors in 2012. He also turned to another long-time ally at Morgans, Philip Lee.
Nairn was initially sceptical. Investors had already digested a spate of local listed investment companies that had joined the local bourse and the fund of funds model had not been overly popular in the past. But the differentiated strategy was enough to get him on board. Nairn was a old hand in the sector and had spent a decade studying the intricacies of listed investment companies. Taylor was mandated to manage the initial public offering in late June.
Michael Beaumont from Watson Mangioni, who has also worked with Wilson in the past, would oversee the legal work.
In May and June the task of bringing local fund managers on board was in full swing and Wilson was overwhelmed by the response.
Plenty of allies
Big names such as Bennelong Funds Management, Paradice Investment Management and LHC Capital, Peter Cooper’s Cooper Investors, and 10 other fund managers joined the Wilson fray. The schedule was tight. The company planned to donate 1 per cent of its assets each year to local children’s charities, including Kids Helpline, Australian Indigenous Education Foundation, Diabetes Kids Fund and Youth Off the Streets.
The focus on childrens’ charities stemmed from his wife Karen’s passion for philanthropic endeavours to assist homeless children, via the family’s foundation. It was decided the slated listed investment company would not charge investors management or performance fees.
The company’s name was changed to Future Generation Investment Fund and a prospectus was lodged on July 7, kicking off a whirlwind roadshow for Wilson and chief lieutenant Kate Thorley. The company was seeking to raise up to $200 million, which was not underwritten, as they embarked on a roadshow.They had perused their little back books to come up with high net worth investors, family offices and a chairman’s list of potential investors as the roadshow was mapped out.
The timing was perfect. Wilson beat counterpart Anton Tagliaferro by a day on their marketing blitz, as he did the rounds for his listed investment company QV Equities. Nairn was working on both offerings, but had extracted himself somewhat from Wilson’s marketing campaign. QV Equities’ brief is to put funds into local stocks outside the S&P/ASX top 20. Wilson and Thorley’s tour of duty started in Adelaide and spanned Perth, Brisbane, Melbourne and Sydney, with more than 50 investor meetings taking place.
The philanthropic focus of the offering had struck a chord for many, including the Australian Securities Exchange which had agreed to waive annual listing fees. The advisers, some of which would be paid for their initial efforts on the listing, had agreed to conduct any future work on a pro bono basis.
As early interest came flooding in around mid-August, the company’s board met to discuss whether they should increase the offer size. They opted against a change, as Wilson had given his word the offer would be capped at $200 million. Another requirement around fund managers investing the lion’s share of the funds in the first 30 to 60 days would also need to be met. The chairman’s list generated $55 million of firm bids. There was also a priority offer and a broker allocation which had to be scaled back. The offer was expected to close September 3, but was forced to close well before that. On August 29, the board met at 1pm Sydney time and the offer was ruled off, after being swamped by responses from investors who subscribed over the target. The focus now turns to the fund’s September 15 listing date. Invitations have already been sent out for a ceremony at the ASX headquarters.