PPM shelves LIC as market turns sour
Private Portfolio Managers (PPM) has put the launch of its listed investment company (LIC) - PPM Investments - on hold due to market saturation and growing negative investor sentiment towards such vehicles.
PPM director Hugh MacNally says the scheduled launch will be shelved for up to a year as the market, which he says has been flooded, is no longer as receptive to LICs as it was earlier in the year.
“The pool for LICs was not that deep and I think the first dozen or so cleared it out,” MacNally says.
“We have decided not to go ahead with the launch due to the change in the market over the past few months. There has been a creeping negativity towards LICs with a perception that many are trading at a discount with people regarding the share price as the only indicator of value,” MacNally says.
The offering had been looking to raise $150 million with a minimum capital raising of $30 million.
MacNally says the group would have struggled to reach the minimum and that this would have impacted on the management expense ratio (MER) and the liquidity of the offering.
“We’re just going to wait and see and come back to the market when the timing’s right in about six or twelve months,” MacNally says.
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