BUSINESSDESK: Marlin Global, the NZX-listed fund managed by Fisher Funds, which invests in international equities, will be wound up, with capital returned to shareholders if investor and rival fund manager Elevation Capital Management gets it way.
Elevation Capital, whose shareholders include Auckland commercial lawyer Andrew Harmos, high-profile fund manager Craig Stobo and founder Christopher Swasbrook, wants Marlin shareholders to support a resolution at the November 1 annual meeting to terminate its management contract with Fisher Funds and liquidate the portfolio.
Elevation managing director Mr Swasbrook says that would see shareholders get a return of about 81 cents per share, a 16% premium to the current trading price of 70 cents.
He says Mr Marlin has "traded at a persistent and sizeable discount to net asset value" in spite of the board setting up a share buy-back and quarterly dividend policy.
"In our opinion, shareholders have little prospect of seeing the current discount close if the status quo prevails," Mr Swasbrook says.
The proposal was put to Marlin chairman Alistair Ryan this week and Marlin yesterday announced it had renewed its management contract with Fisher Funds for a further five years before.
Elevation cashed in on the sell-down of Salvus Strategic Investments' portfolio last year when it acquired a stake in the listed investment company after the board said it was looking at ways of making a capital return. Salvus shareholders eventually voted in favour of liquidating the portfolio and the company, now called Veritas Investments, is looking at ways to achieve a reverse-listing.
Marlin independent directors Ryan and Carol Campbell scotched the proposal, saying Elevation is a rival fund manager and has only been a shareholder for a matter of weeks.
"Shareholders are encouraged to look past this short-term opportunism and focus on the unique opportunity Marlin offers them, the underlying and undoubted quality of the manager and the strong results relative to other international equity options that have been achieved in extremely difficult markets," they say.
Fisher Funds' Carmel Fisher says Elevation's hostile approach was aimed at making a one-off gain and investors should be looking for a long-term investment focus.
In 2009, Marlin shareholders turned down a similar bid from investor Gary Cross, who sought to change the investment company into an open-ended managed fund after the gap between its share price and net asset value widened.
He and his supporters forced Marlin to order an independent report to look at delisting and restructuring, and said ways the investment vehicle could improve its NAV were through share buy-back schemes, implementing a managed dividend policy, or winding up.
As at October 9, Marlin's net asset value was 83.34 cents after deducting treasury stock from the buy-back programme. Its five biggest assets are Germany's Biotest, Stratec Biomedical and Tom Tailor Holdings, Israil's Sarin Technologies and USA's Orthofix.
Marlin wrote down 80% of its stake in recycling paper company Fook Woo after the Hong Kong-listed firm was suspended from trading amid allegations of fraud. Fook Woo accounts for about 1% of the Marlin portfolio.
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