David Rickards. Photo: Paul Jones
AN OPPORTUNITY appears to have arisen for investment companies to list on the sharemarket as the market discount of listed investment companies narrows.
Over the past year, listed investment companies have returned 22 per cent on average, which has prompted Naos Asset Management, with about $20 million under management in two unlisted funds, to test the waters in the listed space.
It is seeking to raise up to $50 million for its Naos Emerging Opportunities Co, which is to invest in emerging companies that are outside the S&P/ASX 100 Index, but not microcaps. ''We can be 100 per cent cash, or hold up to 15 to 20 positions,'' Naos managing director Sebastian Evans said. ''It will be a high-conviction fund.''
Chaired by former Macquarie banker David Rickards, with another ex-Macquarie banker, Warwick Evans, as a director, management and directors are putting $2 million of their own money into the fund.
''The rush for yield is on its way to reaching a climax,'' Mr Evans said, with the fund to focus on poorly understood or overlooked stocks.
The Naos prospectus follows Contango Asset Management seeking to raise $200 million for a listed fund.
Amid a rally of the listed investment company sector over the past year, Djerriwarrh and Mirabooka have been pushed to trade at a premium of 21 per cent and 13 per cent respectively, while the three listed funds in the Geoff Wilson stable - Wilson Asset Management, Wilson Active and Wilson Research - are trading at about net asset backing, as is Cadence Capital, Australian Leaders and Mercantile Investment.