Ann: Share Purchase Plan Details, page-12

Ok ... I better own up. I sent an email to Geoff and FGG a couple of months ago suggesting a SPP at pre-tax NTA. However, I’d suggested a proportional rights issue rather than this $15k retail limit and open ended for wholesale. I’d think that it was on their minds anyway and perhaps other holders suggested it to ... so not claiming credit/blame!

My reasons were ...
- FGGs a good investment vehicle (lower cost that underlying funds, well managed fund-of-funds, additional ability to go to cash when risks are elevated, etc)
- Only a small proportion of options were converted (I let some lapse myself)
- Great performance - especially since options converted
- Premium to NTA was discouraging me and others from investing more
- More available to charities if company was larger

Since the options were converted, we’ve had great performance across leading funds and we’ve outperformed the investors in the underlying funds because 1/ we pay less fees and 2/ as other investors have realised this they’ve bid the price of shares above the NTA (adding an extra 5+% up to yesterday). A small premium to NTA is logical (due to lower fees than direct investing in the funds) ... however a large one is unlikely as the option is just to invest in the funds via a wrap.

So - for me it’s all positive. I add to my holding, I expect the SP will then creep back up to a similar premium and there’s more money for the charities. I think there will be a natural cap on the size of this LIC as Magellan and co. won’t want a too high proportion of their FUM dominated by an LIC that’s not paying them fees and is competing for their business, eg. Shareholders like me - I hold both Magellan and Antipodes funds in my wrap account as well as thru FGG.

The only thing that irks me is that I’d like a lot more than $15k so will have to talk to a broker (and I hate brokers!).