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Antipodes Global LIC IPO launches: Antipodes Global Investment Company (APL)

ETF Watch - Aug 15, 2016

Antipodes Partners have today launched their new Listed Investment Company (LIC) IPO, Antipodes Global Investment Company Limited (APL), which is aiming to raise up to $220m. Antipodes Partners are likely relatively unknown to most investors, they haven't been around too long, launching their first 3 managed funds in July 2015, however they have offer an impressive pedigree, with ex Platinum Asset Management Deputy Chief Investment Officer, Jacob Mitchell at the helm. They also boast a number of ex Platinum staff on the books. The 3 unlised managed funds that Antipodes currently offer have all outperformed their respective benchmarks, albeit only over a relatively short time period since they were first offered in July 2015. Impressively, in a little over 12 months Antipodes has grown its Funds under Investment to $769m from a starting point of $200m.

Antipodes Global Investment Company will invest predominantly in a portfolio of Long and Short positions in international listed securities, aiming to outperform the MSCI All Country World Net Index. The portfolio will focus on capital preservation and hold 20-60 stocks with a net equity position of 50-100%. The portfolio's entire market position is capped at 150%, which implies it can short up to 50% of its total exposure. Antipodes employs a Value approach to investing and their blog is well worth a read to uncover the rationale for some of their investment decisions. The unlisted version of the fund has returned 9.5% since inception, compared to the index returns of 1.6%.

According to the ETF Watch Fund Database, there are 15 LICs available on the ASX which focus on international equities, including some big names such as Magellan and many Antipodes staff's old employer, Platinum. One of the key points of difference that Antipodes brings is their Long/Short bias.Currently the only Absolute Return (ie Long/Short) focused international LICs are microcaps Aurora Global Income (AIB - $5m), Henry Morgan Limited (HML - $18m) as well as PM Capital Global Opportunities Fund (PGF - $290m) which has only limited shorting ability and continues to trade at around 20% discount to its underlying NAV and finally Platinum Capital Limited (PMC - $365m) which as mentioned above is the ex employer of many of the Antipodes staff and also tends to hold a limited short portfolio.. APL has an opportunity to fill a market niche if it can maintain its strong performance, with investors certainly attracted to the Absolute Return options which invest in Australia, due to their potential to provide more consistent returns and high dividend income.

As per the usual LIC IPO process, investors in the IPO will be gifted a free option for every share they purchase. These options have a generous expiry date of around 24 months after listing (15 October 2018). Shares will be listed at $1.10, with Net Asset Value of between $1.076 to $1.078. Investors in the IPO should be aware of the above 2 facts, as exercise of options in the future will result in dilution of capital, and for every $1.10 invested, the investor will actually receive $1.076 worth of shares. Management fees will be 1.1% of assets per annum, with a performance fee of 15% of outperformance.

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IPO Facts

  • Minimum raise of $119m
  • Maximum of $220m (with $110m oversubscription facility)
  • $1.10 issue price
  • 1 option attached for each share
  • Offer open date 15 August 2016
  • Broker firm offer closes 23 September 2016
  • Offer expected to close 30 September 2016
  • Expected trading on the ASX 14 October 2016

This post was prepared with publicly available information available from Antipodes Partners. ETF Watch did not receive any payment from Antipodes for this post, but may receive referral payments from OnMarket Bookbuilds.

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