Boutique property fund manager MacarthurCook Investment Management has acquired National Australia Fund Management (NAFM) following its purchase of NAFM’s $475 million mortgage fund.
While in a separate move, St George Bank’s Ascalon Capital Managers will take a 19 per cent stake in MacarthurCook.
The National Australia Mortgage Fund, which has over 7800 clients and a turnover of $5 million a year, is to be rebranded the Macarthur Cook Mortgage Fund, with the deal expected to be completed by December 22. The deal will also see NAFM rebranded as MacarthurCook Fund Management.
MacarthurCook founder and managing director Craig Dunstan says it is a significant step for the fledgling Melbourne-based group.
“We are delighted to be successful in acquiring this fund from a major institution and see this as an endorsement of the quality and experience of our people.”
“This is a significant step forward for our business and strategically enhances our objective of building one of the leading property and mortgage investment managers.”
The National deal will be funded by a debt and equity placement of nine million shares, with the 70 cent shares being snapped up by Ascalon, Acorn Capital, The Myer Family Company and other clients of Austock Brokers.
The share placement will see Ascalon become the biggest shareholder in MacarthurCook and Ascalon chief executive officer Ray De Lucia will join the fund manager’s board.
“MacarthurCook has a very experienced team and a robust investment process and we expect to see it grow quickly,” De Lucia says.
Dunstan expects funds under management to exceed $525 million by March next year after acquiring the National mortgage fund and launching the MacarthurCook Industrial Property Trust.
Unitholders in the mortgage fund will be offered options in MacarthurCook, which Dunstan says is a way of rewarding small investors.
“This is a unique opportunity for investors to share financially in the growth of our company,” he says.
“We believe MacarthurCook is the first fund manager in Australia to offer share options to unitholders for nothing.”
For every $5000 invested, the fund manager will issue 100 free options with a maximum allocation of 50,000 options. The options will change into shares by 2006, providing the unitholder has remained in the fund between March, 2004 and June, 2006.
