They're all joined at the hip. They have no interest in biting one another. The broker makes money from placement fees and from trades the fund manager puts through them, the fund manager gets all their dividends underwritten and does a SPP and Raising and Options convert every year. They will make sure CGA gets bigger and bigger by making the LICs bigger each year and backing other LICs they will do. Its very comfortable.
In normal circumstances I would say CGA is a good bet now because it will get bigger, but then I remember its already bleeding money on $600 or $700m so another $100m won't make any difference to profitability, or, rather, stemming the bleed there. I don't rate that company because no one there has ran a company or an LIC from what I can see, they've mostly been PAYG type employees most of their life
To your question about the brokers and their % stake- IMO brokers would have no interest seizing this board because they might be doing this with 10 LICs and who has the time? All they needed to do was get rid of those recalcitrant directors who threatened the revenue streams of their cash cow LIC (which they probably put a lot of money into the do the listing too I might add)
I am surprised so many shareholders voted for this. I don't think they understood what happened here. But it is what it is. Under different people and different questions I probably would have voted them out myself, I certainly thought when they sold CGA for $13m and it came on at $60m the next day it was enough to anger my and want their removal. But not these directors, and most definitely not to the (bottom quartile) fund manager. Reflecting on that, for the life of me I can't see how the shareholders voted for this, it must have been their brokers controlling the vote is all i can think
Reading the directors have zero shares does not surprise me one bit
As for Mark Kerr he is kinda, kinda independent, which means he'll be gone next lest he have a come to god moment in a board meeting when they are voting some performance incentive back in for the manager or something like that
I spoke to my broker about this he said a good microcap manager needs to have lots of brokers it feeds trades through to ensure they get access to deals and research. I would expect most of the trades will be fed through the broker who made over $1m listing CGA
As for "Will he be instructed to take part in ipos and placements he might otherwise have turned down" well I hope so! Because they are a stinker of a manager, maybe this way they will make some money.
I now click from Held to Not Held, and with that, wish remaining holders the best of luck, removing this one from my watch list also
CTN Price at posting:
98.5¢ Sentiment: None Disclosure: Not Held
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