ECP Asset Management (ECPAM) has issued its prospectus for a new listed investment company (LIC) offering access to the Australian small and mid-cap equity sectors, with SMSF trustees as its target audience.
Called Barrack Street, the new LIC will be looking to invest in the shares of companies outside the Australian Securities Exchange (ASX) top 50 listed funds with the view to generating in excess of its 8 per cent a year benchmark return.
“Just about every person who’s got an SMSFs I’ve had the pleasure of talking to have got all the big banks and all the big mining companies and stocks like Woolworths in their portfolios, and Barrack Street has been launched to complement their existing holdings,” ECPAM chief executive Manny Pohl told selfmanagedsuper.
“Too often people have got underlying stocks and they buy into a few managed funds and they’re just doubling up in their existing holdings.
“So it’s to complement that. A lot of people avoid this part of the market because it’s so volatile, but we’ve got expertise in it so that’s what we’ve decided to do.”
Pohl added ECPAM had access to better information about the small and mid-cap sectors than SMSF members and could therefore offer a more disciplined investment approach to those equities.
The LIC will not employ any sector limits in its operation and weightings will be based on expected internal rates of return.
Pohl said Barrack Street should have appeal to all SMSF members regardless of whether they were in accumulation or pension phase as the LIC aimed to provide strong income yields as well as capital growth at low risk.
“It’s all about total return and how that happens, so it’s not like we favour one type of SMSF member over another,” he said.
The initial public offer (IPO) is priced at $1.00 an includes a free 24-month option for every subscribed share exercisable at $1.00. The offer closes on 31 July and Morgans Corporate is the lead manager.
ECPAM has targeted $50 million as the maximum amount of capital it would like to raise via the IPO.
