PalandriInvestment Management is continuing to use financial planners for the distribution of its managed investment schemes, despite the recent bad publicity surrounding advisers following theAustralian Securities and Investments Commission(ASIC)/Australian Consumers’ Association (ACA) report.
Company secretary Neil Hackett says because the company’s investments are pitched at high-net-worth investors, using financial planners is seen as the only suitable distribution method.
“We can’t see any other way of distribution, as the minimum investment for our scheme is $20,000 and that eliminates the mums and dads,” he says.
Palandri has raised $110 million through its wine managed investment schemes and almost all of this money has been accessed through clients of financial planners.
The company has just launched its American Wine Business prospectus, which aims to raise $29 million for Palandri’s expansion in the United States.
The offer is priced at $21,450 per business unit, which gives investors part of the wine sales in the US. The cost per unit will see 21 per cent of the monies going to the production of wine and 35 per cent on sales and marketing. Corporate costs are five per cent and 11 per cent is projected profit.
Palandri is pitching its wine sales in the US in the medium to high price range and has appointed a US distributor with access to more than 200 wholesalers throughout the country.
Hackett estimates the income from sales in the 2005 financial year will cover the cost of the annual management fees and the remaining 15 years of the scheme will deliver further profits.
“In our first three managed investment schemes, we have delivered returns of $12.9 million to our investors from wine sales,” he says.
Palandri is paying a commission of up to eight per cent on the initial sales of the business units or alternatively a five per cent upfront commission and a trail of 0.35 per cent.
