IIR initiates coverage on Argo Global Listed Infrastructure Limited

Argo Global Listed Infrastructure Limited (ASX: ALI) is a Listed Investment Company (LIC) that listed on the ASX in July 2015. Argo Service Company Pty Ltd (ASCO), a wholly-owned subsidiary of Argo Investments Limited (ASX: ARG), is the Manager of the Company and has appointed Cohen & Steers as the Portfolio Manager. Cohen & Steers is a global investment manager in long-life assets, including infrastructure, real estate securities, natural resource companies, commodity futures and fixed-income securities. ALI seeks to provide investors a total return, consisting of capital growth and dividend income, from a diversified long-only portfolio of global listed infrastructure securities. The Portfolio Manager will seek to outperform the benchmark over the long-term, however, given the nature of the underlying investments we expect any alpha generation to be moderate. The portfolio will be actively managed and comprise 50-100 securities. IIR has initiated coverage on ALI with a Recommended rating. The full report can be found on the IIR website.

IIR initiates coverage on Magellan FuturePay

Magellan FuturePay (Chi-X: FPAY) is an exchange traded managed fund (ETMF) that is seeking to provide investors predictable, monthly distributions that grow with inflation, with the potential for capital growth and protection in down markets. The Fund will be managed by Magellan Asset Management Limited, who is also the Responsible Entity (RE) and Market Maker of the Fund. The Fund will seek to achieve its objective through an investment in a portfolio of securities that represents a blend of the Magellan Global Plus strategy (50%- 60%) and the Magellan Core Infrastructure strategy (40%-50%), in combination with a reserving strategy whereby cash will be directed to a discretionary trust (“Support Trust”). The Support Trust will be used to support distribution payments if the portfolio performance is insufficient to meet the ongoing distribution requirements. IIR has initiated coverage on FPAY with a Recommended rating. The full report can be found on the IIR website.

Reclassification of WCM Global Long Short to Absolute Return Fund

Given the change in the investment strategy and the change in the company’s name to reflect the new strategy, we have reclassified WCM Global Long Short Limited (ASX: WLS), previously Contango Income Generator Limited (ASX: CIE), as an Absolute Return Fund. As the name suggests, WLS now provides exposure to a long/short portfolio of global equities.

PM Capital Global Opportunities Fund dividend uplift offers attractive yield

On 12 August 2021, PM Capital Global Opportunities Fund (ASX: PGF) announced a final dividend for FY21 of 5.0cps, fully franked, a 100% increase on the FY20 final dividend. The Company also announced that due to its strong profits reserve position, it intends to maintain a minimum dividend of 5.0cps for both the interim and final dividend for FY22, representing a full year FY22 dividend of at least 10cps. As at 30 June 2021, the Company has 5 years dividend coverage at 10cps. The increased dividend announcement represents a significant uplift in yield. Based on the share price at the close of 19 August 2021, the full year dividend declared for FY21 represented a dividend yield of 4.8%. The forecast FY22 dividend would represent a yield of 6.4%, fully franked, which is strong for a global equity focused LIC.

Magellan High Conviction Trust unitholders approve transition to ETMF

Unitholders of Magellan High Conviction Trust have voted in favour of the transition from a Listed Investment Trust (LIT) to an Exchange Traded Managed Fund (ETMF). MHH was removed from the ASX on 30 August 2021 and the ETMF commenced trading under the ticker MHHT on 31 August 2021. There is no change to the investment strategy, distribution policy or fees associated with the Trust. The Trust will continue to invest in a concentrated portfolio of Magellan’s highest conviction ideas and aim to deliver a target cash distribution yield of 3%p.a.

Sandon Capital declares special dividend and further aligns interest with shareholders

Sandon Capital Investments Limited (ASX: SNC) has declared a fully franked special dividend of 1cps in addition to the full franked FY21 final dividend of 2.75cps. The Board anticipates paying an interim FY22 dividend of 2.75cps, fully franked, subject to the Company having sufficient profit reserves, franking credits and it is within prudent business practices. This would represent a 10% increase on the FY21 interim dividend. SNC currently has 32.1cps in profits reserves and more than 9cps in franking credits. In addition to this, the Manager (Sandon Capital Pty Ltd) announced that from FY22 onwards, the Manager intends to invest at least 50% of the after-tax proceeds of performance fees earned from SNC in SNC shares. Shares will be purchased on-market and will be acquired after the payment of the relevant performance fee where SNC’s share price is trading at a discount to its after-tax NTA. The Manager and entities associated with its directors and shareholders currently have in excess of $7.3m invested in funds managed by Sandon Capital Pty Ltd, including 2.1m SNC shares.

Gryphon Capital Income Trust taps wholesale investors

During the month, Gryphon Capital Income Trust (ASX: GCI) raised $62.1m through a placement of 30.92m new units to wholesale and sophisticated investors at a price of $2.01 per unit. The placement was done using the Trust’s available placement capacity under the ASX listing rules with the placement representing no more than 15% of the Trust’s issued capital and therefore unitholder approval was not required. Capital raised will be used to invest in line with the Trust’s investment strategy. The Manager believes the placement will benefit existing GCI unitholders by providing additional scale to expand the portfolio and therefore improve portfolio diversification, as well as provide greater liquidity for unitholders. The placement was at a slight discount to the closing unit price of $2.04 on the trading day prior to the offer (6 August 2021). The Manager and the RE are considering an Interest Purchase Plan (IPP), which will be available to all eligible unitholders.

Metrics Income Opportunities Trust seeks to raise up to $152m through institutional placement and unit purchase plan

On 26 August 2021, Metrics Income Opportunities Trust (ASX: MOT) announced they are seeking to raise $52.86m through the issue 26.04m new fully paid ordinary MOT units at a price of $2.03 per unit to wholesale investors. In addition to this, the Trust announced a Unit Purchase Plan (UPP) to existing eligible unitholders to acquire up to $30,000 worth of new units at a price of $2.03. The Trust is seeking to raise up to $100m through the UPP. Applications in excess of this amount may be scaled back on a pro rata basis. The UPP is scheduled to open on 6 September 2021 and close on 30 September 2021. The offer price of $2.03 is in line with the NAV at the time of the announcement with the UPP providing unitholders the ability to acquire units at a discount of 1.9% to the unit price at the close on the trading day prior to the announcement (25 August 2021). The funds raised through the institutional placement and the UPP will be invested in accordance with the investment mandate and target return of MOT.

WCM Global Growth increases final dividend 25%

WCM Global Growth Limited (ASX: WQG) reported a net operating profit after tax of $48.4m for FY21. The investment portfolio delivered a return of 26.8% for FY21 with total shareholder returns of 35.6%. The Company declared a final dividend for FY21 of 2.5cps, fully franked, a 25% increase on the FY20 final dividend. This represents a full year dividend of 4.5cps, a 12.5% increase on the FY20 full year dividend. The Board has announced it expects to deliver an increased dividend for the next two dividend payments, with a FY22 interim dividend of 2.75cps and a final FY22 dividend of 3.0cps. These dividends are anticipated to be fully franked.
The increased dividends will be subject to the Company having sufficient profit reserves and franking credits and be subject to corporate, legal and regulatory considerations. In February 2021, WQG issued Bonus Options on a 1 for 3 basis. The options have an exercise price of $1.50, which represents a discount of 7.4% to the share price at the close on 19 August 2021. The options have an exercise period that runs until 31 August 2022. Shareholders that exercise their options by COB 17 September 2021 and continue to hold the shares for the relevant record date will be eligible for all the above mentioned dividends.

Spheria Emerging Companies targets dividend yield of 4% of NTA p.a and moves to quarterly dividends

Spheria Emerging Companies (ASX: SEC) declared a final dividend of 5cps, fully franked, for FY21, taking the full year dividend to 8.5cps, fully franked, a 54.5% increase on the FY20 full year dividend. The dividend uplift was a result of the strong performance in FY21.The Board has set a target dividend yield of 4% of NTA p.a for FY22. The Board has also announced an increase in the frequency of dividend payments from semi-annual to quarterly with dividends of 1% of NTA per quarter.

VGI Partners Global Investments declares significant uplift in final dividend and VGI Partners Asian Investments announces inaugural dividend

VGI Partners Global Investments Limited (ASX: VG1) announced a significant uplift in the final dividend for FY21, with a final dividend of 5.5cps, fully franked. This compares to the previous final dividend of 1.5cps. Based on the share price as at the date of the FY21 results announcement, the FY21 full year dividend represented a yield of 3.1%. After providing for the FY21 final dividend, the Company has over 5 years of dividend coverage in the profit reserve at a full year dividend of 11cps. VG8 declared an inaugural final dividend of 5.5cps, fully franked. After providing for the FY21 final dividend, the Company has 3 years of dividend coverage in the profit reserve at a full year dividend of 11cps. In May 2021, both VG1 and VG8 announced a dividend yield target of 4%p.a. The final dividends reflects the new dividend yield target.