A significant number of family offices have a wealth creation arm and a philanthropic arm. While most of the times both divisions are run separately, new investment vehicles allow private investors to fulfil both objectives. Australia’s leading global fund managers have united to create wealth for shareholders while also changing the lives of young Australians affected by mental illness.
In an Australian first, Future Generation Global Investment Company Limited (FGG) will provide investors with access to Australia’s best global fund managers, who have agreed to work pro bono, alongside the board of directors, and leading service providers.
This generosity allows the company to make an annual 1% donation of its net tangible assets (NTA) to support young Australians with mental health issues. However, shareholders with 1 million shares or more will have the option of directing their pro rata 1% of NTA to any Australian non profit or Public Benevolent Institution with deductible gift recipients (DGR) status.
This is a perpetual gift from the fund management industry to Australia’s future generation.
While the generosity is directed towards the charities that will receive the tax deductible donation, the balance of foregone fees will also benefit investors.
Across the 20 funds, management fees range between 1% to 2.475% and the average performance fees is 16.1%. These waived fees are in effect donated back to FGG, benefiting shareholders and the designated charities.
Of the participating fund managers seven are not accessible to retail investors, six are not yet available in Australia and two funds are soon to be closed to new investors.
The value to shareholders, after accounting for the tax deductible 1% donation, is therefore extraordinary.
The Company is currently undertaking an IPO and once listed it will be the best value investment product on the ASX. In a recent report, Independent Investment Research recently rated FGG “Recommended Plus” stating “given the management and performance fees associated with the underlying funds to select from are greater than 1% on average, investors will be getting exposure to the funds for a discounted cost”.