While the capital markets across the globe has witnessed a quiet year so far, backed by continued short-term volatilities – Alternative Investment space has been witnessing traction from the institutional investors. Infrastructure & Real Estate is a kind of alternative investment that is preferred by the investors to achieve consistent returns, and these funds are managed by some of the high-profile financial services companies with a solid track record and client base.
In its infrastructure fund offerings, Macquarie Group Limited (ASX: MQG) has funds dedicated to European Infrastructure market focusing on the high-quality infrastructure businesses across Europe. Previously, Macquarie Group had already disclosed during the release of the full-year results about the escalated investor traction in the market for MIRA funds, which also helped them minimise the global headwinds on the AUM fuelled by heavy subscriptions.
These funds are held privately, especially to pool the funds from institutional investors base, which include pension funds, insurance funds, sovereign wealth funds etc. According to the company’s website, previously in September 2016, Macquarie European Infrastructure Fund 5 (MIEF 5) had its close back in with significant oversubscription and total commitments at €4.0 billion.
According to the media coverage, Macquarie European Infrastructure Fund 6 (MIEF 6) is witnessing attention in the market, the capital raising also saw commitments exceeding by almost €1 billion against the target by Macquarie, while collectively the dedicated by business entity for infra and real assets – Macquarie Infrastructure and Real Assets (MIRA) has raised around €13 billion from the institutional investor base.
It is reported that MIEF 6 has raised close to €6 billion, and, a large proportion of this had been flown through the Asian investors ~ four times the capital commitments from Asian investors in MIEF 4 (a preceding fund).
As per a senior executive of MIRA funds, the Asian investors are preferring alternative assets to seek safer returns while some of the investors are investing in such assets for the first time. In addition to this, the population is becoming wealthier with rise in savings and balance sheets on the upside.
Let us now look at 3 fund management stocks as follows:
IMF Bentham Limited (ASX: IMF)
Litigation funder, IMF Bentham Limited provides funding, investigation and management of litigation claims while also assisting in facilitating settlements & maximising the value of each claim, appeal funding and strategic planning.
On 20 June 2019, IMF Bentham announced the launch of Non-US dispute investment focused fund – Fund 5, with an initial fund size of US$500 million coupled with roll over options.
It is reported that the Fund 5 had been injected by US$100 million commitment from IMF Bentham, and like Fund 4; this fund also provides investors with a rollover option into a successor fund, if exercised the capital commitments would be US$1 billion. Reportedly, US$100 million capital commitment by IMF includes an obligation to allocate 20% of capital to each of the investments, and its associated costs.
Reportedly, Fund 5 is exempted from the limited partnership incorporated under the laws of the Cayman Islands. Also, it is formed for the purpose of investing in non-U.S. litigation finance investments, and IMF Bentham Cayman Advisory Services (IMF Advisory) is appointed as the investment advisor for the funds.
As on 20 June 2019, IMF last traded at A$2.840, down by 0.699% from its last close. Its year-to-date return stands at -7.44% and one-year return is at +4.76%. IMF has recorded +5.93% in the past three months along with the returns of -0.35% and -0.69% in the past one month and six months, respectively.
Magellan Financial Group Limited (ASX: MFG)
Established in 2006, Magellan Financial Group Limited is a MidCap stock, a specialist fund manager based in Sydney, Australia. Along with its main subsidiary – Magellan Asset Management Limited, MFG operates the fund offerings for retail and institutional investor base with dedicated funds to Australian equities, global equities and listed infrastructure space.
In its product line up, the fund house offers two listed funds on ASX; Magellan Global Equities Fund (Managed Fund) (ASX: MGE) and Magellan Global Equities Fund (Currency Hedged) (ASX: MHG). MFG charges 1.35% of management fee on these two funds while dividend distribution is scheduled annually.
The performance of Magellan Global Equities Fund (Managed Fund) (ASX: MGE) is +17.45% with a dividend of 9.6178 cents in the last June 2018.
Source: Company Website
The performance of Magellan Global Equities Fund (Currency Hedged) (ASX: MHG) is +8.11% with a dividend of 12 cents in the last June 2018.
Source: Company Website
According to MFG’s latest release, the Assets Under Management are over $82 billion as on 31 May 2019. MFG’s stock last traded at A$52.320, up by 3.155% from its last close. It appears that the stock has witnessed long term capital appreciation with returns in the past five-years pegged at +352.45%, and in the last ten years, the returns are +9736.19%. Magellan Financials’ stock has recorded a return of +38.73% and +13.14% in the past three months and one month, respectively.
Platinum Asset Management Limited (ASX: PTM)
Founded in 1994, Platinum Asset Management Limited is an internationally focused asset manager with demonstrated capabilities. It seeks to achieve long term absolute returns through investing in companies, which are undervalued in the market; undervalued – the actual worth is greater than the present market price.
Platinum Asset Management is an active fund manager, the composition of its portfolios does not depend upon their benchmark indices, which are used to evaluate performance while the composition is based on detailed research and quantitative analysis.
Platinum Asia Investments Limited (ASX: PAI) seeks to return from investment channelled into listed equities from Asia (ex-Japan) region as well as companies that are listed on exchanges outside Asia (ex-Japan) region, but the business of such companies is conducted predominantly in Asia (ex-Japan) region. The portfolio size of the fund typically holds securities in the range of 75 to 100, and exposure is typically 50% or more in the equities; meanwhile, the fund may short-sell the securities or indices considering them as overvalued while achieving optimum risk management and inflated returns.
Performance (Source: Company’s Website)
As of 31 May 2019, PAI had negative returns in the past one month – 4.8%, three month – 0.3% and one year – 6.1%; however, the returns are positive in six months: 7.7% and two years: 6.6%. In addition to this, PAI distributed a net dividend of 2 cents paid on 25 March 2019.
Platinum Capital Limited (ASX: PMC) seeks to return from global equities, typically holds 70 to 140 securities and the fund may short-sell the securities or indices considering them as overvalued while achieving optimum risk management and inflated returns.
As of 31 May 2019, PMC had posted a return of +5.2% in the past six months, and return of +4.6% in the past two years; however, the performance of the fund is negative in the past one month, three months and one year with returns recorded at -6.4%, -2.2% and -5.5%, respectively. In addition to this, PAI distributed a net dividend of 6 cents paid on 19 March 2019, which includes ordinary and special dividends.
At the end of the trading session, PTM’s stock was at A$4.9 (as on 20 June 2019), up by 1.871% from its previous close. The performance of the stock in the past six months is -1.64% along with -12.55% recorded in the past three months.
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