Australian investment firm Argo Investments (ASX:ARG) has announced the creation of a new publically traded subsidiary, in the form of an LIC, that will seek to raise up to $600m in funding. The new ASX listing will be called Argo Global Listed Infrastructure and will have its portfolio managed by the US-based Cohen & Steers. The ASX-listed investment company (LIC) plans to seek between $200m and $600m through a share offer that will begin on 26 May and end on 19 June.
The new LIC will offer up to 250m shares at a price of $2 per share. It will also have a green shoe option to accept oversubscriptions up to an additional $100m. The new entity is seeking to invest in airports, pipelines, utilities such as gas electricity, renewable energy and water, toll roads, ports and telecommunications towers. It will invest in a portfolio of 50 to 100 listed infrastructure securities worldwide. Its parent company, Argo Investments, will initially subscribe for $25m worth of shares as part of the offering. The company said it expected the investment portfolio to be unhedged.
Argo Investments has been in operation since 1946 and has about 75,000 shareholders. Its current market capitalisation is sitting around $5.11bn. Shares of the investment company have followed a strong upward trend since June 2012, although it still slightly below its pre-financial crisis peak. ARG was up 11c, or 1.44 per cent, at $7.70 per share on Monday. ARG has advanced 7.92 per cent in the last 12 months and .13 per cent so far this year.
Author: Simon Herrmann
May 12, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.