HM1 Announces Conference Portfolio and EAI Seeks to Restructure to Address Discount

The IIR LMI Monthly Report provides key LMI market news for the month of November as well as IIR research updates and key data points as at 31 October 2022.

Key news items include:

EAI Seeks to Restructure to Address Discount: 
At its AGM on 10 November 2022, Ellerston Asian Investments Limited (ASX: EAI) informed shareholders it is considering merging the Company’s asset with the Ellerston Asia Growth Fund (EAGF) and converting the merged entity to an exchange-traded managed fund (ETMF). Under the proposed structure the transaction will involve a transfer of assets from EAI to EAGF.
EAI shareholders will receive new EAGF units in exchange for their current shares held in EAI, based on a predetermined ratio, and then EAGF will seek admission to ASX AQUA. The restructure will require shareholder approval as well as ASX and ASIC review. Assuming the necessary service providers and infrastructure required for an ETMF can be implemented, the Board anticipates the transaction would be presented to EAI shareholders for approval during the first half of 2023 with a view to implementing the restructure in mid to late 2023.

VG8 Changes Name & Ticker: 
VGI Partners Asian Investments Ltd (ASX: VG8) has changed its name to Regal Asian Investments Ltd and the ASX code to RG8 following shareholder approval at the AGM on 23 November The name change was sought to reflect the changes in the investment management responsibility of the portfolio to Regal Funds Management Pty Ltd and to leverage Regal’s brand and track record of investing within the Asian region.

PL8 Announces SPP:
On 21 November 2022, Plato Income Maximiser Limited (ASX: PL8) announced it is undertaking a Share Purchase Plan (SPP). Under the SPP, eligible shareholders have the opportunity to acquire a minimum of $2,500 and a maximum of $30,000 worth of PL8 shares. No brokerage will be incurred for new shares issued.
Shares will be issued at the lower of: (1) $1.11 per share, being the pre-tax NTA per share plus the franking credit balance per share on 18 November 2022; or (2) the pre-tax NTA on the date the SPP closes (9 December 2022) plus the franking credit balance per share of $0.029.

RF1 Seeks to Add Private Credit Strategy: 
Regal Investment Fund (ASX: RF1) has announced an expansion of the Investment Processes to allow the Manager the ability to allocate capital to a Regal investment strategy with a track record of less than one year.
The amendment to the Investment Processes is primarily to allow the Manager to add the recently launched Regal Private Credit Opportunities Fund to the investment mandate. The Private Credit Strategy is the ninth strategy eligible for investment by RF1 with up to 25% of the portfolio able to allocate to the strategy.

PCI Amends Mandate to Enable Investment in Securitised Credit Fund:
Perpetual Credit Income Trust (ASX: PCI) has amended the investment strategy for the Trust to allow it to invest in the Perpetual Securitised Credit Fund (PSCF), a newly established securitised assets fund, to gain exposure to securitised assets. PSCF is an open-ended unregistered managed investment scheme and seeks to provide exposure to a diversified portfolio of securitised credit assets that aims to generate returns of RBA Cash Rate + 3.5%-5.5%p.a. through the economic cycle (before fees and taxes).
The Fund can hold rated and unrated (sub-investment grade) assets and cash. The securitised assets currently held directly by PCI will be transferred to PSCF and PCI will be issued units in PSCF. The assets are expected to be transferred at market value and therefore there is expected to be little to no impact on the NAV of PCI. PCI will initially have an allocation of less than 5% of the NAV in PSCF.

WHF Announces SPP:
 Whitefield Industrials Limited (ASX: WHF) has announced a Share Purchase Plan (SPP) providing eligible shareholders with the opportunity to apply for up to $30,000 worth of shares. Shares under the SPP will be issued at the lower of $5.00 per share or at a 2.5% discount to the volume-weighted average market price of WHF shares over the five days up to and including the closing date of the SPP, which is scheduled for 14 December 2022.
The maximum issue price of $5.00 per share represented a 5.1% discount to the closing share price of WHF on the day prior to the announcement. WHF intends to cap the SPP at $50m (being 10m new shares at the maximum price of $5.00 per share).
If subscriptions exceed the cap amount the Company may scale back applications received, however, the Board retains the discretion to issue more shares to satisfy all or part of applications if the cap amount is exceeded, subject to the maximum number of shares issued not exceeding 30% of the issued share capital of the Company at the date of issue.

Vince Pezzullo Promoted to Head of Equities at Perpetual:
 Perpetual Limited announced that Vince Pezzullo has been promoted to the Head of Equities within Perpetual Asset Management Australia. The promotion follows the resignation of Paul Skamvougeras, who has decided to step down from the position after more than 18 years at Perpetual. Vince has been with Perpetual since 2007 and steps up from the role of Deputy Head of Equities. Vince will commence the role immediately.

HM1 Announces Conference Portfolio & New Core Fund Managers:
 On 21 November 2022, Hearts and Minds Investments Limited (ASX: HM1) released its Conference Portfolio following the annual Sohn Hearts & Minds Investment Leaders Conference. The Conference Portfolio represents 35% of HM1’s total portfolio and the stocks are generally held for a period of 12 months.
HM1 also announced the appointment of Munro Partners and Tribeca Investment Partners as Core Fund Managers. The new managers will replace Paradice Investment Management at the end of their mandate term. HM1 Core Fund Managers provide HM1 with their highest conviction stock recommendations on a pro bono basis.
HM1 invests in these stock recommendations in the Core Portfolio which makes up 65% of the portfolio. Following the current rotation of Core Fund Managers, Munro Partners and Tribeca Investment Partners will join TDM Growth Partners, Cooper Investors, Caledonia Investments, Magellan Asset Management and Regal Partners as HM1 Core Fund Managers.

See the full details and more in the attached report.

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