Financial Guru Launches $40 Million Fat Fund
Mon, 14 Feb 2005
Kiwi Financial Guru Launches $40 Million Fat Fund
Auckland, 14 February 2005 - Angus Geddes, the Nelson-raised founder of Australasia's most successful investment newsletter, Fat Prophets, this week announced the creation of a A$40 million dollar independent boutique listed investment company, Fat Prophets Australia Fund Limited ("Fat Fund").
The Fat Fund will issue 40 million stapled securities at A$1 each, representing one share (A$1) and one option, exercisable at A$1 within three years. Minimum investment in the Fund is A$5,000.
Geddes, co-founder of Fat Prophets Australasia, says the creation of the Fat Fund is in direct response to strong demand by more than 7,000 Fat Prophets' subscribers.
"Many of our subscribers include New Zealanders, so this provides ready access to a listed Australasian vehicle that expertly invests in diversified value-based, liquid stocks. The Fund has set aside 15,000,000 stapled securities for priority allocation to Fat Prophet subscribers," says Geddes.
The Fat Fund is a separate entity to the Fat Prophets' publishers, with an independent board of directors, risk and investment committee, providing a safety net to shareholders and has the ability to disregard the stock picks of the Fat Prophets' reports.
The Fund expects its investment portfolio will contain between 25 and 80 stocks. The company will seek out value and can hold 30 per cent of its portfolio to be held outside its benchmark - the S&P/ASX 300 Accumulation Index.
Angus Geddes notes that the Fund will be able to respond quickly to new opportunities as they arise in the market.
"We will be light on our feet to capitalise on opportunities that inevitably arise in a falling or rising market, with the ability to get in and out of stocks quickly".
"Our investment filters allow rapid ranking of opportunities with priorities being analysed in detail prior to purchase. Stocks are ranked on many criteria, including recent share price movement, financial strength, dividend yield and price earnings ratios, as well as analysis of share price to net tangible asset backing and liquidity."
Chairman of the Fat Fund, Mr Robert Bolton has 20 years executive management experience and is one of the independent non-executive directors of The Fat Fund.
"The Fat Prophets report has had a very successful record in picking value stocks that have been largely ignored by large funds managers because they are too small or not researched by many stockbrokers," says Bolton.
"The Fat Fund will use the Fat Prophets' report as one source of research for picking high value stocks, as well as a range of other research analytics employed by our independent research team."
The Fat Fund's experienced research and management team is led by Chief Executive Officer, David Shearwood, a well known value investor who has 18 years of analytical experience in funds management, investment banking and stock broking in Australia. Mr Steve O'Hanna is Fat Funds' Senior Fund Manager and he joins Fat Fund from Advance Asset Management Ltd, where from 2001 he performed both analytical and dealer functions.
The Fat Fund investment portfolio will be managed by Fat Prophets Funds Management Australia Pty Limited. For this service the Fund intends to pay the Manager an annual base management fee equivalent to 1.25 per cent of the net value of the portfolio, with a 15 per cent benchmark out-performance fee. Investors will be protected by the fact that any under performance by the company of the benchmark will need to be recouped before a performance fee is paid.
"Through this mechanism and open transparency of our investments, delivered by monthly reporting, we will offer very high protection for our shareholders. The Fat Fund will release its cash holdings and top 15 investments (once portfolio is established) each month," says Geddes.
"In addition, we intend to implement an ethical investment screen, preferring companies with a strong track record of corporate governance and health and safety for their staff and customers".
The offer opens on February
17, 2005, and closes on April 8, 2005. The Fat Prophets
subscriber priority offer closes February 28, 2005. A
prospectus, together with application forms (online and
offline) are available at