Blue Sky ready to welcome White Knight, page-30

No surprise, given the independent directors of BAF will have been looking around nervously since March. Their stated rationale for adopting a multi-manager strategy for BAF makes eminent sense:

▪ Multi-manager strategy allows them to access "best of breed" managers (perhaps a dig at BLA)
▪ Provides investment opportunities into asset classes that BLA does not offer (another dig).

But unless there's a subtlety I'm missing, the BLA stated rationale don't reflect that well on them:

▪ "BAF’s discounted fee arrangements do not sufficiently compensate for the costs of managing BAF" - what, BAF's historical returns were boosted by heavily discounted management fees? Will this unwind for BAF shareholders when Pinnacle charges market rates? Why were these costs so high when BLA was just managing its own funds on behalf of BAF?

▪ "BLA’s forecast annual savings for BLA from the new arrangement are greater than $1.0 million p.a." Huh? Weren't BLA managing their own funds which BAF had solely invested into? How could this have cost them an extra $1m which they are now saving? Should BLA exit other funds they are managing to reduce their cost base and shrink their way to profitability?