AMP Capital says AGF fund should continue
AMP Capital has urged the unitholders of its Capital China Growth Fund (AGF) to vote to continue the fund with a suite of enhancements.
In its explanatory memorandum, released ahead of an extraordinary general meeting scheduled for 28 July, AMP, which is the responsible entity (RE) of AGF, said that the unitholders would vote on two motions.
One motion was submitted by the RE and the other one by hedge fund LIM Asia Multi-Strategy Fund, which proposed to wind up the fund.
AMP Capital stressed that if unitholders wanted the fund to continue with a number of new enhancements proposed by the RE, which include reduction in management fees and a capital management opportunity, then they should vote against LIM's resolution.
The company said it had considered around 40 options and held consultations with more than 700 unitholders in relation to the future of the fund before deciding that it would be in the best interest of unitholders to retain the fund.
AMP Capital funds management chairman, Adam Tindall, stressed that the parties had expressed interest in retaining the fund due to "access to actively-managed China A-shares" it offers for Australian retail investors.
"Unitholders have told us they want the fund to continue because it gives them rare exposure to the China A-share market,"
"They also said they wanted it to remain listed as they like the liquidity of AGF in its current structure,"
At the same time, repatriating money from China was not that easy and could take between nine and 18 months before all proceeds could be distributed to unitholders on a wind-up, the firm said.
"If investors tell us they want to wind up the fund, we will do so and will continue to act in their best interests to get their funds back to them as quickly as possible. However, that may take some time due to the challenges associated with repatriating cash from China," Tindall said.
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