Magellan Asset Management has announced it will undertake an initial public offering in a new Australian Securities Exchange (ASX) listed investment trust, the Magellan High Conviction Trust.
Alpha manager Hamish Douglass’ Magellan high conviction fund would replicate the strategy of its unlisted fund that has returned 16.6 per cent per annum since its inception on 1 July 2013.
Magellan said the offer expected to open on 21 August, 2019 and would invested in eight to 12 high quality global companies with a target cash distribution of three per cent per annum.
“Magellan will be the investment manager and act as the responsible entity, with Hamish Douglass and Chris Wheldon acting as the portfolio managers," the announcement said.
Douglass, who is also Magellan Financial Group’s chair and chief investment officer, said the trust was not appointing a broker syndicate or paying any fees or commissions to any brokers or advisers to handle the offer to avoid concerns regarding conflicted remuneration.
“Instead, Magellan is offering directly to investors who subscribe for units in the offer the right to receive additional units worth either 7.5 per cent or 2.5 per cent of their allotment depending if they subscribe under the priority offer or the wholesale/general public offer,” he said.
“The full cost of the additional units and costs of the offer will be borne by Magellan… I intend to take up my priority offer and, in addition, to subscribed for $20 million worth of units under the wholesale offer.”