|| Funds, Managed
|| AUD Issue Price A$1.40
PM Capital is a market leading and award winning global equities manager. This Global Opportunities Fund and its subsidiary are issuing a next generation
LIC security designed especially for retail investors.
The PTrackERS offer a redemption ‘safety net’. This is a significant, and totally unique, enhancement to current LIC structures.
- Gain exposure to a market leading and award winning global equities manager
- Time horizon consistent with recommended horizon for global equity strategies
- Attractive and defined dividend policy
- Option to buy, hold or sell as required over the 7-year period
- Access investment returns that aren’t intended to be impacted by capital flows, or corporate actions
- Ability to efficiently exchange the PTrackERS for PGF shares in 7 years (CGT roll-over relief. No Pre Tax NTA plus Franking Credit dilution)
- Option of redeeming the PTrackERS at Maturity acts as a catalyst to trade toward NTA
The Portfolio Tracking Exchangeable Redeemable Securities (Converting Security) (‘PTrackERS’) is an innovative capital raising initiative being undertaken
by PM Capital and its wholly owned subsidiary, PM Capital GO 2025 Limited (“GO 2025”), for which the investment manager is PM Capital Limited. PGF
and GO 2025 are seeking to raise a minimum of A$105 million and a maximum of A$491 million (75.0 million and 350.9 million securities issued respectively).
PTrackERS will trade on the ASX with the ASX Code: P25PA.
The investment term is seven years, consistent with the Manager’s suggested minimum investment time frame in PGF. At the maturity date, investors have
the choice to either exit the investment in PTrackERS based on NTA or convert into ordinary shares in PGF (without triggering a CGT event).
The underlying rationale behind the redeemable equity structure that is PTrackERS is to allow the capital base to be grown without diluting NTA of either
investor’s in PGF or GO 2025. Dilution has been a persistent issue in the LIC / LIT segment.
KEY FEATURES OF PTrackERS
- PTrackERS provides exposure to a segregated portfolio held by GO 2025 which closely mirrors that of PGF. As such, NTA performance will closely track
that of PGF.
- Investment term of seven years consistent with the Manager’s suggested investment timeframe in PGF.
- At the Maturity Date, investors have the choice to redeem based on NTA, or convert into PGF shares (with no CGT event and no dilution to NTA before
tax plus franking credits per security) at conversion ratio based on the respective NTA before tax plus franking credits of both P25PA and PGF.
- Investors will have an incentive to redeem should P25PA be trading at a (material) discount to NTA and, conversely, convert should PGF be trading at
a premium to its NTA.
- An arbitrage opportunity will exist between P25PA and PGF should the two investment vehicles be trading at materially different premium / discount
to NTA. This should facilitate liquidity and exert pressure on P25PA in particular, and to a lesser extent also PGF, to trade at least at NTA approaching
the Maturity Date.
- The offer structure is non-dilutive, ensuring all investors receive the full underlying performance generated by the Manager. Provides an equitable
outcome between ordinary and PTrackERS investors.
- There is a defined annual dividend policy. The PTrackERS are intended to pay dividends at a target yield of between 3% and 4% per annum of NTA After
Tax Liabilities But Before Tax Assets, plus franking (where franking is available) paid semi-annually. Should there be a shortfall of income from
the underlying investments in the portfolio, then a component will be paid from the return of capital.
- CGT Roll-Over relief exists for those investors that chose not to redeem and continue on as a PGF shareholder at the Maturity Date;
- The Manager is paying for all costs associated with the offer. This means every dollar invested will be generating investment returns from day-1, and
the NTA at the listing date will be equal to the Issue Price.
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