The Ophir High Conviction Fund will shortly be listing on the ASX as a Listed Investment Trust ("LIT").
We have been delighted with the support received from existing investors in the Ophir High Conviction Fund regarding the conversion of the Fund to an ASX-listed
Listed Investment Trust (“LIT”).
Following a formal Meeting of Unitholders on Tuesday 13th November, the resolution to convert the Fund was passed in favour. The
Fund has now begun the process of converting to a Listed Investment Trust, with an expected listing date of Wednesday December 19th.
Trading under the ASX code “OPH”, the Fund will be the second-largest listed small/mid cap investment vehicle available on the ASX. Importantly, no additional
capital has been raised as part of the listing, and both Senior Portfolio Managers (and Ophir staff) have retained their existing investments in the
This is a very exciting development for the Fund and one that we feel will bring meaningful benefit to existing holders. Thank you for your support.
For existing investors in the Fund, there are a number of developments to be aware of:
In order to cleanse the unit price prior to listing, the Responsible Entity of the Fund (The Trust Company (RE Services) Limited) has declared a special distribution to be paid to unitholders on the register as at 13 November 2018.
This distribution represents the realised capital gains and income received by the Fund from 1 July 2018 to 13 November 2018.
For Class A unitholders, the distribution is expected to be 10.82 cents per unit.
As per other regular distributions, investors that have opted to participate in the Distribution Reinvestment Plan (DRP) will received their distribution in additional units in the class they currently hold.
Existing investors that do not wish to participate in the ASX listing are still able to redeem some, or all, of their units prior to the conversion to the Listed Investment Trust.
The Fund will continue to process daily redemptions up until 5pm on Friday 23 November 2018. Please don’t hesitate to contact us should you require a Redemption Request Form.
On 29 November, the Responsible Entity of the Fund will lodge the Product Disclosure Statement (PDS) with ASIC and apply to the ASX for listing of the Fund.
The listing of the Fund remains subject to receiving draft approval from the Australian Tax Office for unitholders to receive concessional CGT rollover
relief. Subject to receiving this approval and the approval of the listing application from the ASX, the Fund will begin trading on the ASX (under
ASX ticker code “OPH” as a Listed Investment Trust on Wednesday December 19th.
The Ophir High Conviction Fund was established in August 2015 as a concentrated extension strategy of Ophir Asset Management’s original small cap fund,
The Ophir Opportunities Fund (established in 2012).
Managed by the same investment team and utilising the same investment process, the Fund provides investors with a concentrated exposure to 15-30 high-quality
companies listed outside the S&P/ASX 50.
The Fund represents a “best ideas” portfolio, with the added flexibility of being able to hold some companies that grow out of the small cap universe and
into the S&P/ASX 100.
Since inception, the Fund has delivered investors an annualised after-fee return of +20.2% per annum.
Converting the Ophir High Conviction Fund to an ASX-listed, closed-ended investment trust will provide a significant structural advantage for the Fund.
The listing will enable unitholders to benefit from:
1) A stable capital base
Closed-ended funds have historically outperformed open-ended funds over the full length of the market cycle. This is due to the fact that the fund is not exposed to capital flowing in and out of the fund in response to applications and redemptions. Instead, investment managers have a stable capital base to deploy capital into the best opportunities as they see fit;
Consistent access to capital, particularly during times of market distress, allows investment managers to take advantage of counter-cyclical opportunities and purchase oversold companies when other investment funds may be forced to sell assets to meet redemptions;
The benefits to fund performance in having capital available to deploy during these periods is meaningful. Before establishing Ophir Asset Management,
we were fortunate to manage a (institutional-only) fund and experience the benefits of a stable capital base through the GFC. Permanent access to capital
allowed us to purchase businesses that had been materially sold down while other managers were forced to sell assets to fund redemptions. This resulted
in the Fund ranking as the top performing fund in Australia between 2007-2011 versus the Mercer fund manager surveys.
2) ASX Listing will enable investors to access the High Conviction Fund
In order to ensure the best possible environment for outperformance, both the Ophir Opportunities Fund and the Ophir High Conviction Fund have been hard closed to investors in order to restrict their size. While keeping the Fund’s small provides a terrific competitive advantage, it limits the ability for new (and existing) investors to make new investments in the Fund. The ASX listing will enable unitholders to benefit from a closed-ended structure (no new units are being issued), while providing the liquidity benefits of being able to again buy and sell units on the ASX.
With no associated capital raise with the listing, existing unitholders will be beneficiaries of bringing the fund to the market. Any new investors looking to purchase units in the Fund will have to purchase units from an existing unitholder at the price determined by the market.
In our view, the listed Fund will provide an attractive investment proposition for new investors:
We’re very excited for the future of the Ophir High Conviction Fund and for the opportunities it will provide investors for the years ahead. Many thanks for the support – we hope we have an opportunity to meet with you at the upcoming Meet the Manager events in Sydney, Melbourne, Brisbane, Adelaide and Perth.
Andrew Mitchell & Steven Ng
This document is issued by Ophir Asset Management (AFSL 420 082) in relation to the Ophir Opportunities Fund & the Ophir High Conviction Fund (the Funds) and is intended for wholesale investors only. The Trust Company (RE Services) Limited ABN 45 003 278 831 AFSL 235150 (Responsible Entity) is the responsible entity of Ophir High Conviction Fund (the Fund). Neither Perpetual nor Ophir guarantees repayment of capital or any particular rate of return from the Fund. All opinions included in the letter constitute judgements of Ophir Asset Management as at the date of the letter and are subject to change without notice. The content of this document does not constitute an offer or solicitation to subscribe for units in the Fund. Past performance is not a reliable indicator of future performance. Ophir Asset Management accepts no liability for any inaccurate, incomplete or omitted information of any kind or any losses by using this information. Any investment decision in connection with the Funds should only be made based on the information contained in the Information Memorandum and/or Product Disclosure Statements.
This document is issued by Ophir Asset Management (AFSL 420 082) in relation to the Ophir Opportunities Fund & the Ophir High Conviction Fund (the Funds) and is intended for wholesale investors only. The information provided in this document is general information only and does not constitute investment or other advice. The content of this document does not constitute an offer or solicitation to subscribe for units in the Funds. Ophir Asset Management accepts no liability for any inaccurate, incomplete or omitted information of any kind or any losses caused by using this information. Any investment decision in connection with the Funds should only be made based on the information contained in the Information Memorandum and/or Product Disclosure Statements.
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