Bell Potter LIC Weekly: ALF Suspended

By Hayden Nicholson | More Articles by Hayden Nicholson

Australian Leaders Fund suspended

Pengana Further to previous announcements regarding a proposed restructure,Australian Leaders Fund (ALF)has now sought the necessary shareholder and court approvals, with shares being suspended on 17 March and the scheme now legally effective. The investment portfolio had been largely liquidated back in November 2019, excluding two immaterial securities that were suspended, jointly accounting for less than 0.5% of NTA. The reported 28 February NTA was $1.026, adjusted for the 3c scheme dividend, current tax liability, operating costs, scheme costs and Investment Management Agreement termination fee. ALF will reduce its capital via a one-for-one in specie distribution of new units in the Watermark Absolute Return Fund, with the residual post-tax cash asset of ALF also being transferred to the fund (continued in report).

Cadence Capital pick with large uplift

Accounting for 2.8% of the Cadence Capital (CDM) investment portfolio, constituent company DeepGreen Metals has announced a definitive business combination agreement with an ESG-focused and New York listed special purpose acquisition company. The transaction merges a private procurer of battery metals from oceanic polymetallic rocks with experienced stewardship and deep operational and capital market capabilities, in the energy and resource sectors. The combined company will be renamed ‘The Metals Company’ (TMC), with the merger expected to be finalised during 2Q 2021. The transaction reflects a pro forma equity value for TMC of US$2.9bn and an Enterprise Value of US$2.4bn, representing an Enterprise Value to EBITDA of 1.2x as measured by the company’s estimated 2027 EBITDA of ~US$2bn. This includes an upsized US$330m of Private Investment in Public Equity at US$10.00 per share. TMC will continue to be led by Gerard Barron, DeepGreen Chairman and CEO, while Scott Leonard, CEO of SOAC, will join the Board (continued in report).

Bell Potter’s Indicative NTA tracks the ‘indicative’ movement of a LIC’s underlying NTA each month by monitoring the percentage movements of the disclosed holdings and using an index to track the movement of the remaining positions. The Indicative NTA works best with LICs that have a high percentage of investments concentrated in its Top 20, regular disclosure of its Top 20, lower turnover of investments, regular disclosure of its cash position and the absence of a performance fee. We have also included an adjusted indicative NTA and adjusted discount that removes the LIC distribution from the ex-dividend date until the receipt of the new NTA post the payment date. This report is published each Monday prior to the market open and is available on a daily basis. Intraday indicative NTAs will be available on request through your adviser.

For full details refer to the detailed report below or click here to download your copy.

About Hayden Nicholson

Hayden Nicholson is an ETF/LIC Specialist at Bell Potter Securities. Hayden provides comprehensive coverage of the ETF and LIC sectors, producing a range of highly regarded reports covering investment fundamentals, asset class structure and cost, and the role of managed investments in portfolios.

View more articles by Hayden Nicholson →