Market-neutral LIC closes IPO

Watermark Funds Management’s listed investment company (LIC), the Watermark Global Leaders Fund, has closed its initial public offering (IPO), raising over $90 million from self-directed investors.

Trading on the Australian Securities Exchange is expected to start on 21 December.

Watermark founder and chief investment officer Justin Braitling said the LIC had resonated with investors looking to take advantage of global share opportunities without having to worry about volatility in the share market.

“For an alternative strategy in the current investment environment, this is a great result,” Braitling noted.

“The Global Leaders Fund represents Watermark’s third and largest LIC raising to date and we are excited about the global LIC as a key pillar of growth of the Watermark business.

“It gives investors the opportunity to achieve stronger, more consistent performance amidst the current volatility and reduced equity market risk.

“The fund’s strategy hedges out market and sector risks. Currency exposures are also hedged. This means market-neutral funds can still rise during volatile markets.”

Last month, he said the LIC addressed many concerns and risks for SMSF investors.

“SMSFs are trying to reduce their risk, which is why they’re holding so much cash. They really don’t want to take on any risks, but they actually do have a lot of risk in their portfolio in the other 70 per cent that’s not in cash,” he said at the time.

The Global Leaders Fund provides access to an actively managed portfolio of global equities in a market-neutral structure, which uses long and short positions to deliver consistent, positive returns through market cycles with no correlation to the share market.

The firm has a strong long-term track record implementing market-neutral strategies of this nature, delivering a 22.6 per cent return on its global portfolio over the past 15 months.

The IPO is the third LIC managed by Watermark Funds Management, taking the firm’s total funds under management to over $700 million.

Watermark’s corporate adviser is Seed Partnerships, while joint lead managers include Taylor Collison, CommSec, Morgans, Morgan Stanley and Ord Minnett.

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