- Leveraging the fund’s solid expertise: Antipodes Global Investment Company Limited (APL) has exceeded $220 million in subscriptions as on September 21, 2016 and this is maximum proceeds under the offer (issue price of $1.10 per ordinary share). The group is set to accept up to a further $110 million in oversubscriptions. The offer aims to generate returns over each full investment cycle (which the Manager and the Company consider to be a period of typically 3 to 5 years) in excess of the MSCI All Country World Net Index which is a benchmark and would be actively managed with a focus on capital preservation. Moreover, there would be the benefit from the manager, Antipodes Partners Limited as they have deep expertise across equity markets, and has been the manager of the Antipodes Global Fund since July 2015 that implemented the same investment strategy which is now proposed for the company and has a strong and robust investment process. In addition, APL would provide capital growth and income (through a steady dividend yield franked to the extent possible).
Dates (Source: Company Reports)
- Outsourcing to third party providers could be a risk: The success and profitability of APL would largely depend on the Antipodes Partners’ ability to manage the portfolio to achieve the APL’s objectives, strategies, policies, guidelines and permitted investments. If the manager is unable to perform investment management services for the company or should there be significant key personnel changes at the Antipodes Partners, the investment activities may be disrupted and its performance would be negatively impacted. Moreover, the value of the portfolio may be impacted by factors such as economic conditions, interest rates, regulations, sentiment and geopolitical events as well as environmental, social and technological changes. The investments in the foreign companies may be exposed to a higher degree of sovereign, political, economic, market and corporate governance risks than domestic investments. Additionally, APL would outsource its key operational functions including investment management, custody, execution, administration and valuation to a number of third party service providers.
- Targeting Fintech trends: H2Ocean Limited (H2O, listed investment company) would invest in ventures that have completed an accelerator or incubator program and it would typically invest on a matched basis. H2O, through its agreement with H2 Ventures which is the manager can have an access to a proprietary database of both early and growth stage Fintech Ventures and would give it unique insights into fintech trends and investment opportunities around the world. In addition, the advantages of this Listed Venture Company structure would include a stable closed-ended pool of capital, plus a requirement to comply with applicable ASX corporate governance policies which would provide the investors with transparency and accountability. The issue price for the IPO is $1.10 per stapled security and capital to be raised is $55,000,000 (expected offer close date is 11 October 2016).
- High growth ventures equally have risks: H2O might invest into a new or rapidly growing ventures business which is considered to be speculative.
- Expanding penetration: Gooroo Ventures Limited (GOO) operates an HR technology company, uses big data, machine learning and sociometrics to shortlist candidates for the company. GOO has entered into the partnership with the Microsoft for three years to drive global awareness and adoption of GOO platform. GOO is extending its reach in the Australia, US and UK and has planned the extension in India and Canada for second half of CY 2016. Additionally, GOO has a unique matching algorithm to predict whether a candidate can do the job skills and would be able to fit the organization and the team. GOO solves the manual “hit and miss” nature of the candidate search and short listing process which is overall $14.1 billion cost to the companies. In addition, GOO has signed the sales partnership contracts with the global leading training providers. The issue price for the IPO is 20 cents per ordinary share and capital to be raised is $5,000,000 (expected offer close date is 27 September 2016).
- Rising Management changes pose concerns: Major reshuffle in the management which includes the appointment of at least 3 new directors including Greg Muller (CEO) and Emmanuel Foundas (Director). The final director and the Chairman would be appointed. The existing director Terry Kallis is going to resign. The functioning of the new team can affect the company.
- Strong portfolio: Powerhouse Ventures Limited (PVL) has expertise across four sectors which are engineering and cleantech, agritech and environmental, medical and healthcare and digital and ICT. PVL generates revenues through the mandated arrangements with the universities and in active management of portfolio companies. PVL has achieved 34.6% internal rate of return (IRR) in company portfolio value since 2010 and has in the portfolio the blend of early-stage to mature businesses and anticipate planned liquidity events. The PVL portfolio currently comprises 19 active companies, with a combined net asset valuation (NAV) of $NZ20.92 million, as at 31st March 2016. Moreover, PVL takes an active role in building these new ventures into companies with global growth potential. PVL currently holds relationships with 14 universities and five government-owned research organizations. The ASX listing is planned for Q3 CY16 which would scale portfolio investment in Australasian market. There is large market opportunity as the NZ University research funding is valued at $NZ800 million per annum and Australia valued at $A10 billion. In addition, the IPO would provide investors with the unique access to mature university IP commercialization model, supported by existing portfolio of early-stage to mature businesses. The IPO offer is at AU$1.07 and investment is being accepted through the Equitise Platform at the price of NZ$1.14. The capital to be raised is $20,000,000 (maximum) and the expected offer close date was extended to 23 September 2016).
Offer Dates (Source: Company Reports)
- Negatives: PVL is focused on investing in early-stage companies, which carry higher risks as their business success remains to be validated. Moreover, PVL is reliant on external funding to execute and expand its investment portfolio and there is no guarantee whether or not the ongoing funding would remain available. The pro forma income includes revisions of the book value of the investment portfolio rather than just cash flow. The validation of its business plan through the liquidity events could be a major value driver, however the company has no track record of realizing material value and there is no guarantee that this can be achieved at a reasonable cost.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in: BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.