Star Fund Manager John Bridgeman Chases Superior Returns
Benjamin Hornigold was an 18th century English pirate during the Golden Age of Piracy
Listed investment company Henry Morgan Limited (HML.ASX) has delivered spectacular returns year-to-date, betting on the British Pound, the Euro and warning everyone that “if you think you are long enough stocks, you probably are not.” Last month the company announced that net tangible assets before tax rose a staggering 45.5% since 1 January 2017. However, often high returns are a result of high risk and given the leveraged nature of the fund’s investment strategy, one should ask the question whether this is this is a once in lifetime opportunity or a house of cards that will eventually collapse?
The manager of the fund is John Bridgeman Limited, a Brisbane based investment management firm, which has recently become a star fund manager making a number of good calls and delivering significant shareholder value. The company will soon manage the portfolio of a new listed investment company, Benjamin Hornigold Limited, which is expected to list on the ASX on May 10. Given the recent success of Henry Morgan, it is not a surprise that the IPO closed oversubscribed.
Benjamin Hornigold will be focused on building a portfolio of compelling investment ideas with the aim to achieve ‘superior returns’ for its shareholders. The IPO will add another LIC to the portfolio of Executive Chairman Stuart McAuliffe, who is also Managing Director and Chief Investment Officer of John Bridgeman Limited, the manager of the fund.
The fund will offer speculative and leveraged exposure to global macroeconomic trends and investors have the opportunity to gain exposure to international equities, FX and futures markets. The recent performance of John Bridgeman’s listed fund Henry Morgan suggests that management has the required abilities to generate near-term shareholder value. However the value of the fund will be subject to general market risks and the manager’s ability to successfully predict market movements. The management fee of 3% and performance fee of 27% is above the industry average and IPO investors should be aware that substantial fluctuations in the value of their investment may occur. The leveraged nature of the fund’s investment strategy intensifies the risk to the upside and downside and IPO investors are required to have a speculative appetite for this listing.
ASX Code: BHD
Shares on Offer: 20m
Listing Price: $1.00
Market Capitalisation: $20m
Listing Date: May 10
Author: Simon Herrmann
May 08, 2017
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.