I agree it is a gutsy move. What annoys me is that no details are shared. What is the management fee on the $800M? What is the net .25%? Any guesses? What is it and why can't companies be transparent in sharing this info? Full disclosure with the exception of trade secrets should be mandatory.
If the $800 AUM is at current market values and assuming it is a balanced portfolio then there is considerable upside. Net 800* .1% = $.8M 800* .25% = $2M 800* .5% = $4M
Slide 6 from the AGM http://www.asx.com.au/asxpdf/20081023/pdf/31d21hmty5w1ht.pdf shows the asset management chain with 30-80 bps (.3-.8%). In current times I'd expect MMC to be getting a good deal. $10M for $800AUM 30 bps = $2.4M 80 bps = $6.4M Could they have got higher? These figures are gross. 100 bps = $8M which would seem like an OK price in the current environment.
Anyway, MMC should divulge this information to shareholders.
MMA Price at posting:
33.8¢ Sentiment: None Disclosure: Held
