Antipodes LIC addresses SMSF home bias

Antipodes Partners has officially opened its first listed investment company (LIC), which is designed to address the risks associated with SMSFs’ high allocations to Australian equities by providing them with access to a long-short global securities portfolio with active currency management.

The Antipodes Global Investment Company is based on its successful managed fund, the Antipodes Global Fund.

The initial public offering is seeking to raise up to $220 million with the ability to accept an additional $110 million in oversubscriptions.

The offer period is open until 30 September, with trading on the ASX expected to start on 14 October.

“I’m still amazed that we’re still having this conversation about global 16, 17 years later and that’s why we’re offering the product because many investors are yet to move,” Antipodes Partners managing director and chief investment officer Jacob Mitchell told a media briefing in Sydney yesterday.

“Financial advisers have generally made that switch.

“A lot of the institutions have made that switch.

“But a lot of the SMSF space still has this extreme home market bias and I don’t think that’s particularly wise because of the layers of risk, so even a small allocation to global isn’t that hard to consider as a part of your overall management of risk.”

Pinnacle Investment Management director Andrew Findlay, who sits on the Antipodes board as a non-independent director, explained why the firm was moving into the LIC space in the first place.

“Obviously in this day and age when there’s a lot of disruption about, exchange-listed makes a lot of sense,” Findlay said.

“A lot of SMSFs prefer to invest via their broker accounts and on exchange, whether that means ETFs (exchange-traded funds), ETMFs (exchange-traded managed funds), LICs, direct shares, whatever it happens to be.

“So from a business perspective, to get Antipodes’s skill into the hands of investors all across the market we need to be available not only in unlisted managed funds format but also in listed format, and that’s a big part of the reason why a LIC makes sense – to make ourselves available for investors who prefer to invest on exchange and LICs are a big part of that.”

Generally, SMSF investors were searching for long-term capital growth, steady rising dividends and capital preservation, he noted.

“So the long-short approach that Jacob and his team pursue suits that extremely well,” he said, adding he expected significant growth in the LIC market.

“I think it’s a theme we’ll see over the coming years – if disruption is to take hold in retail funds management distribution or wealth management more generally, exchange-listed is a key ingredient to that because it facilities straight-through processing.

“If anyone’s ever had to fill in an application form for an unlisted managed fund, you’ll realise how much of a pain that is and it’s really a barrier to growth in managed funds vis a vis anything that’s exchange-listed.”

He underlined that under a LIC structure, the board of directors had a separate decision process in relation to areas such as capital management.

“That is separate from Jacob and his team managing the portfolio of assets that underlies the company, so it’s a very important distinction from the LIC world to the managed fund world,” he said.

Antipodes Partners has grown its funds under management from about $200 million to $769 million since inception.

It is part of multi-affiliate firm Pinnacle Investment Management.

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