Merchant Opportunities Fund
The Fund aims to materially outperform the ASX All Ordinaries Accumulation Index net of fees over a rolling 5 year period via investing in a portfolio of Australian companies listed - or soon to be listed - on the ASX.
The Merchant Opportunities Fund (MOF) aims to materially outperform the ASX All Ordinaries Accumulation Index net of fees over a rolling 5 year period via investing in a portfolio of Australian companies listed - or soon to be listed - on the ASX.
The overriding objective of the Fund is to create increased value for Unitholders. This is measured by growth in net assets and earnings distributions to Unitholders.
The Fund aims to deliver a gross return of approximately 7 percent per annum over the long term. There is no guarantee that the Fund’s objective will be achieved. This objective is not meant to be a forecast. It is merely an indication of what the Fund aims to achieve on the assumptions that markets remain relatively stable.
The Fund has the following specific objectives:
• Maintain a low fee structure where the interests of the Unitholders and the Investment Manager are aligned.
• Achieve above index returns for individual asset classes over the medium to long term.
• Provide a diversified investment portfolio consisting of investments in financial assets that may have an interest in Australian equities, private or seed investments, cash and international equities.
• Invest into assets that the Manager believes provide the potential for capital growth.
• Maintain a medium risk profile.
• Where possible select financial assets that have a presence in Australia.
The Fund will invest in financial assets, which may include private companies, pre-IPO Investments, ASX Listed Shares or other unit trusts that invest in asset classes such as:
- Australian equities.
- Fixed interest or convertible note investments.
- Seed or pre-IPO investments.
- International equities; and
- Cash
A dividend accumulation strategy will be applied where appropriate. Investments that offer high dividend yields will be considered where appropriate to enhance the liquidity of the Fund.
This is also expected to provide cash for new investment opportunities.
The investment strategy of the Fund is to:
- only invest in financial assets, which may include investments in asset classes such as equities (Australian and international), pre-IPO and private investments.
- be a “long-only” Fund, comprising a diversified portfolio of ASX listed assets or assets to be listed on the ASX in the near to medium future.
- incorporate fixed interest or convertible note type investments where appropriate.
- reduce the correlation of the Fund to the ASX 200 by investing outside the ASX 200 and in private and pre-IPO investments that the public have difficulty accessing; and
- where appropriate hold larger cash positions than a traditional fund would do.
The weightings for each asset class will be determined by the Fund’s investment committee from time to time.
Unlisted Investments or Pre-IPO Investments
As at 30 June 2021, the Fund holds unlisted investments (including Convertible Notes) totaling $36,617,480 or 27% of the portfolio.
Listed Small Capitalisation Shares
As at 30 June 2021, the Fund holds $91,292,828 or 68% of the portfolio in small capitalisation Australian shares, listed on the Australian Securities Exchange.
Property Investments
As at 30 June 2021, the Fund holds unlisted property investments totaling $4,133,247 or 3% of the portfolio.
Cash
The other assets of the Fund are held in cash pending the identification of future investments in line with the Fund’s investment strategy.
The overall asset allocation of the Fund is shown in the chart below:
Opportunities Fund Results
The Merchant Opportunities Fund has consistently outperformed, with average returns (after fees) well ahead of the ASX Small Ordinaries Index over a 1-year, 3-year, 5-year, and 7-year period.
Merchant Opportunities Fund Performance as at 30 June 2022
A Unitholder may, by giving notice in writing, request the redemption of some or all of their Units. Different withdrawal procedures apply according to whether the Fund is liquid or not. As at the date of this PDS the Fund is not liquid.
If the Fund is not liquid, then you may only redeem your Units if the Responsible Entity makes a redemption offer to Unitholders.
The continued availability of the redemption offer and the quantum of funds available for redemptions will be subject to variables such as the market, the current liquidity of the Fund and the Responsible Entity’s view as to the effect of a redemption on remaining Unitholders. If the redemption facility/offer is oversubscribed then redemptions will be scaled back on a proportional basis.
Merchant Funds Management Pty Ltd (ACN 154 493 277) is the Manager of the Merchant Opportunities Fund, under an agreement with our Responsible Entity, CIP Licensing Limited, AFSL 471728.
This publication has been prepared on behalf of and issued by Merchant Funds Management Pty Ltd (ACN 154 493 277) Corporate Authorised Representative No. 420444 of Draupner Investment Management Pty Ltd (ACN 112 894 845) AFSL No. 303566.
Merchant Funds Management Pty Ltd (Merchant), does not accept any liability for loss or damage suffered or incurred by any person however caused (including negligence) relating in any way to this Listing including, without limitation, the information contained in it, any errors or omissions however caused or any person placing any reliance on this presentation, its accuracy, completeness or reliability.
Merchant and its affiliates or any of its directors, agent, officers, or employees do not make any representation or warranty, express or implied, as to or endorsement of, the accuracy or completeness of any information, statements, representations or forecasts contained in this Listing, and they do not accept any liability for any statement made in, or omitted from this Listing. Merchant accepts no obligation to correct or update the information in this Listing.
This Listing is intended only to provide a summary and general overview of matters of interest. The Listing is not financial product advice, whether personal or general, for the purposes of Section 766B of the Corporations Act. The Listing does not involve or imply a recommendation or a statement of opinion in respect of whether to buy, sell or hold a financial product. The information in this Listing does not take into account the objectives, financial situation or needs of any person. You should not act on or rely on the contents of this Listing before first obtaining professional advice specific to your circumstances.
This Listing and contents has been made available in confidence and may not be reproduced or disclosed to third parties or permission of the Fund or Merchant Funds Management Pty Ltd. made public in any way without the express written.
We are Merchant Funds Management, a boutique Perth-Based fund manager focused on driving value for our clients.
We do things a little bit differently, with a focus on making wealth creation accessible to as many Australians as possible. Managing Director Andrew Chapman is taking the expertise he has gained over 20 plus years of managing the investments of the uber-wealthy and is working to make those opportunities available to all.
Andrew has a background not just in Finance, but in Hospitality, and is also the co-owner of a number of venues in Perth. His management style is shaped by the hospitality practice of “management by walking around”- getting into the depths of an organisation and getting your hands dirty. When required, Merchant has taken an activist investment style as opportunities have presented, turning companies around for the benefit of all.
With our own money invested in both funds, Merchant Funds Management takes a great interest in the management of the companies we invest in, we’re looking for management that have had track records in their field and “skin in the game”. Management must have passion, drive and a clear strategy to achieve and deliver upon their goals. The vision and the passion driving the company is what will often catch Andrew’s eye as a potential investment opportunity.
Merchant Funds Management works hard to find emerging companies that present the best investment opportunities that, over time, we hope to assist in turning them into big name brands.
Investment Manager Andrew Chapman is known for his own successful funds management operation, Merchant Group which manages funds for a VIP client base across Australia.
Andrew has Graduate and Post Graduate qualifications in Business, Finance and Hospitality. He established Merchant Group in 2011, after spending 9 years with one of Perth’s leading private wealth managers.
During his financial career, he has traded through a number of market cycles, which have in turn shaped his views on active portfolio management and risk. Through Merchant Group he offers a specialised investment management service to a select group of high-net-worth clients, the unit holders within the Merchant Opportunities Fund and the soon to be launched, Merchant Biotech Fund.
Away from the markets, he is passionate about the hospitality industry and is an owner of several venues in Perth. In 2014, Andrew was an integral part of the establishment of the Western Australian branch of the food rescue organisation, Oz Harvest. He still holds the Australian record for the highest amount raised by one person at a single fundraiser event, the 2019 OzHarvest CEO Cookoff, where he raised $324,000.
Reece holds a Bachelor of Business and Finance from Murdoch University, an MBA from the University of Canberra, and a Graduate Diploma in Financial Planning with Kaplan. Reece worked as a Trader in the City of London and as a Stockbroker in Perth prior to joining Merchant. During his financial career he has managed and traded his way through economic and market cycles. His long-term investment approach and care for his client’s needs and objectives is critically important to him. Through Merchant Group he offers a specialised investment management service to unitholders.
Outside of financial markets, he is passionate about his family and his community. Being the inaugural Adam Gilchrist Cricket Scholar as a teenager he is passionate about helping and giving back to young sports people from rural WA.
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The issuer of this product is identified at the top of this page. The PDS and target market determination for the product are available in the Documents section of this listing. Prospective investors should consider the PDS before deciding to acquire the product. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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