This trust is similar to a property trust, except it has global equities instead of offices or shops as the underlying investment.
The trust will invest in 15-35 global companies with a mandate that allows it to manage its currency exposure and hold up to 50% of the portfolio in cash.
The trust will invest in a focused portfolio of outstanding global companies as assessed by Magellan, and intends to target a 4% per annum cash distribution yield.
The trust will include a permanent dividend reinvestment plan at a fixed 5% discount. The dilutive impact to existing investors will be negated by Magellan.
The Magellan Global Trust will be managed by Hamish Douglass and Stefan Marcionetti and will draw upon Magellan's investment expertise in global equities.
Through an Initial Public Offering of ordinary units in the Trust, Magellan is seeking to raise a minimum of $250 million.
The Magellan Group will pay all the costs of the Offer in cash, intending that the trust trades without a discount on debut.
This means investors will be subscribing for Units in the Trust at a price equal to the Pro Forma NAV (Net Asset Value) per Unit of $1.50 after completion of the Offer.
Investment Themes and Strategy for the Magellan Global Trust
The Magellan Global Trust represents an opportunity for investors to globally diversify their savings and wealth.
The available investment universe in Australian equities is relatively narrow, and in Magellan’s opinion, remains heavily dependent on the ongoing economic success of China, the domestic economy, and the large Australian banks.
Companies such as Alphabet (the owner of Google), Apple, Microsoft, Nestle, PayPal and Yum! Brands are world leaders in their fields that have no equivalents on the ASX.
Australians are familiar with these names because we use their products and services all the time.
Magellan’s philosophy is to invest in a focussed portfolio of the world’s best companies, as assessed by Magellan, and to invest at a discount to their assessment of each company’s underlying intrinsic value.
Magellan undertakes detailed macroeconomic analysis in order to take advantage of mis-pricing of economic cycles and to manage investment risk.
It is focussed on generating attractive absolute returns over the medium to long term.
Magellan’s investment strategy is benchmark agnostic as the strategy has few similarities to market benchmarks or share market indices.
Magellan believes investing in such a portfolio should generate attractive returns over time whilst reducing the risk of a permanent capital loss.
However at the same time, note that investments by the Trust in a company's securities will be subject to many of the risks to which that particular company is itself exposed. These risks may impact the value of the securities of that company and the value of the Trust's portfolio. These risks include such factors as: changes in management, actions of competitors and regulators, changes in technology, and market trends.
More About the Magellan Global Trust
The Magellan Global Trust is an Australian registered managed investment scheme structured as a unit trust, which has been registered with ASIC and is expected to be admitted to the official list of ASX under the ticker code MGG.
Magellan Asset Management Limited (ABN 31 120 593 946) (“Magellan”) is the responsible entity and investment manager of the Trust.
Magellan is a wholly owned subsidiary of Magellan Financial Group Limited (“MFG”), which is listed on the ASX.
Hamish Douglass (Co-Founder, Chief Executive Officer and Chief Investment Officer of MFG) and Stefan Marcionetti (Portfolio Manager of Magellan) are the Portfolio Managers responsible for the investment decisions for the Trust.
Mr Douglass will personally invest $20 million into the Trust.
More About Magellan Financial Group
Magellan Financial Group is a specialist funds management business established in 2006 and based in Sydney, Australia.
Magellan’s core operating subsidiary, Magellan Asset Management Limited, manages approximately $50 billion of funds under management at 31 July 2017 across its global equities and global listed infrastructure strategies for retail, high net worth and institutional investors and employs over 100 staff.
Magellan Financial Group Limited is listed on the Australian Securities Exchange (ASX: MFG) and has a market capitalisation of approximately $4.6 billion.
About the Offer
Investors should download the PDS (including the investment considerations and risks detailed in Section 6) and any updates to the PDS before making any decision about whether to acquire and/or hold the Units.
The Magellan Global Trust PDS is available by clicking on the button on this page.
Please find below a brief summary of the key points of the Offer, based on the PDS.
Key Points of the Offer
|Issuer||Magellan Asset Management Limited|
|Units offered||Fully paid ordinary units|
|Application price per unit||$1.50 per Unit|
|Pro Forma Net Asset Value per Unit||$1.50 per Unit|
|Offer size||Minimum of $250 million|
|Offer closes||21 September 2017|
|Expected date for the allotment of Units under the General Public Offer||13 October 2017|
|Expected date for dispatch of holding statements||13 October|
|Trading of Units commences on the ASX (on a normal settlement basis)||18 October 2017|