Listed investment trust manager Aurora Funds Management has closed the capital raising for its fifth exchange traded fund, slated to list before the end of December, after raising $20 million in six weeks from Australian and New Zealand-based retail investors.
The infrastructure buy-write income trust brings Aurora’s funds under management to around $200 million – or $270 million as a total measure including geared assets. Only $15 million is needed to list a fund on the Australian Stock Exchange, according to Aurora director Hugh Latimer. The $20 million raising is a good sign for Aurora that investors’ appetites for listed managed funds have not waned, despite many financial services company floats struggling to attract interest from some investors. “;We’re pretty happy with the result given the market conditions,”; Latimer said. Adelaide-based boutique Talon Infrastructure, whose principal Nigel Trewartha originally hailed from Macquarie Bank, is the investment manager for the fund. Barclays is the investment adviser and will run an over-the-counter call options overlay. Talon will select 20 global infrastructure shares from a pool of 350 global infrastructure companies. An initial screen for investment in a stock is for the company to have a minimum market capitalisation of $US500 million. The fund will have an average exposure of 5 per cent to each stock – no single holding will be greater than 7.5 per cent or less than 2.5 per cent. The fund is able to gear up to 65 per cent. Aurora has four other listed investment trusts. According to the Aurora website, Sandringham Capital manages the Aurora Sandringham Dividend Income Trust, a fund investing in the top 30 listed companies in Australia. Blackrock Investment Management manages the Aurora Buy Write Income Trust using an active strategy of selling exchange traded call options over a portfolio of Australia’s largest ASX listed companies. The Aurora Property Buy Write Income Trust is a concentrated fund – around 10 stocks – investing in Australian listed property securities, and also uses call options over these securities. And the van Eyk Blueprint Alternatives Plus fund invests in the unlisted van Eyk Blueprint Alternatives Fund, which in turn invests in a range of “;underlying managers who employ alternative investment strategies”;.
The brunt of losses from the LA wildfires are expected to be borne by primary insurers and high-risk reinsurance programs, but super funds are nevertheless closely monitoring the possible impact of the fires on catastrophe bond and insurance-linked securities exposures.
Simon HoyleJanuary 17, 2025
