Shake-up ahead for Platinum Capital LIC investment strategy
The future strategy and management for the $444 million Platinum Capital listed investment company (PMC) has taken another turn at the LIC’s annual general meeting.
Last month, in an extraordinary general meeting (EGM) on 1 October, shareholders in PMC opted for L1 Capital to take over management and voted for Rachel Grimes, Douglas Farrell, and David Gray to join the board. L1 Capital beat out competition from rival bidder Wilson Asset Management.
It had previously been intended for Platinum to merge the LIC with the open-ended Platinum International Fund Complex ETF, but the deal was scrapped after substantial shareholder L1 Capital and its holding company First Maven said they would be voting against it.
As a result, the board of Platinum Capital LIC opted to withdraw the scheme as the lack of support from L1 meant it is unlikely to reach the required 75 per cent approval threshold.
At an AGM held on 28 November, chair Rachel Grimes shared the results of an independent board committee who has assessed the potential options put forward and concluded L1 Capital was a superior proposal. This considered investment strategy, historical investment performance, comparative costs and fee structures as well as investment personnel.
It also covered:
- The financial implications of each proposal, including comparative fee structures and projected total shareholder cost;
- The potential for each manager to improve investment performance and narrow PMC’s discount to NTA;
- The robustness of transition arrangements, portfolio liquidity and operational execution risks; and
- Alignment of each manager’s ownership, incentives and capital commitment with shareholders.
The proposal was subsquently approved by 93.6 per cent of PMC shareholders at the AGM and sees L1 Capital become the new investment manager with the LIC's name changed to L1 Global Long Short Fund (GLS). L1 Capital detailed how it intends to make changes to the strategy of the LIC
It said: “L1 Capital intends that the current portfolio will be transitioned to the new global long short investment strategy. This will involve the sale of some or all of the current portfolio, which is expected to occur very soon after the change of manager, followed by the redeployment of the proceeds into the new portfolio.
“L1 Capital anticipates the entire transition to occur within a period of one month (subject to market conditions). In connection with this transition, the company may consider, subject to market conditions, a potential capital raising with the proceeds to be deployed in transitioning and growing the portfolio in line with the new investment strategy.”
L1 Capital merged with Platinum Asset Management earlier this year and the company was renamed as L1 Group. Funds under management in the newly-combined group stands at $16.9 billion across both businesses, with a diversified client base across retail, listed investment companies, wholesale, and staff, with 92 per cent of revenue coming from non-institutional clients.
AUTHOR
Laura Dew
Recommended for you
A new funds distribution business has launched in Australia, seeking to bring institutional offerings to the wholesale market and led by co-founder of Jamieson Coote Bonds.
Higher interest rates could be on the cards for 2026 after monthly CPI inflation for October showed an increase of 3.8 per cent.
Global actively managed ETF assets hit a record high in October, according to independent research and consultancy firm ETFGI, breaking the record set the previous month.
Federation Asset Management has appointed an investment director and head of responsible investments to support ESG integration strategy across the firm.
