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Global equities IPO pledges to donate 1% of assets to youth mental health

Photo of Geoff Wilson By Geoff Wilson

min read

Future Generation Global Investment Company (FGG) is undertaking an initial public offering (IPO) and once listed will provide investors with access to Australia’s best global fund managers, who have agreed to work pro bono alongside the board of directors and leading service providers.

This generosity will allow the company to make an annual 1 per cent donation of its net tangible assets to charities supporting Australian youth mental health.

FGG is seeking to raise up to $550 million for the fund, the largest float for an Australian LIC. If reached, the company would be on track to make an annual donation of approximately $5.5 million. This would make FGG the largest funder in the youth mental health area.

About the fund

FGG is Australia’s first internationally focused listed investment company (LIC) with the dual objectives of providing shareholders with diversified exposure to selected global fund managers and changing the lives of young Australians affected by mental illness.

FGG offers investors the opportunity to gain unprecedented access to Australia’s most prominent global fund managers – a number of whom are closed or not accessible to retail investors – through a single ASX-listed investment vehicle. The Company charges 0.0% management fees and 0.0% performance fees. Fund managers are managing the capital entirely pro-bono so that 1.0% of net assets each year can be donated to Australian non-profits committed to young Australians affected by mental health issues.

(Editor’s note: ASX Limited has agreed to waive annual listing fees that the Company would otherwise be required to pay in order for the Shares and Options to remain quoted on the Australian Securities Exchange.)

FGG’s investment objective is to provide shareholders with long-term capital growth. By investing in companies globally, the aim is to maximise total return with a combination of capital growth and income, thus allowing fully franked dividends to be distributed to shareholders provided the company has sufficient profit reserves and franking credits available and it is within prudent business practices.

In a recent report, Independent Investment Research rated FGG "recommended plus", stating: "Given the management and performance fees associated with the underlying funds to select from are greater than 1 per cent on average, investors will be getting exposure to the funds for a discounted cost."

Why global equities?

Following the success of the domestically focused Future Generation Investment Company (FGX) after its listing in September 2014, its shareholders requested an equivalent philanthropic investment vehicle that provides global equity exposure.

Demand for global equities is high, as ASX is only around 1.5 per cent of the global market. There is far greater breadth of opportunity available offshore and a broader range of industries to select from, and most stocks are available at significantly cheaper valuations than those in our local markets.

The wide range of stock includes high-quality multinationals such as Google, Microsoft, Johnson & Johnson, Dell, General Electric, Nestle, Facebook, Wells Fargo and JP Morgan. In terms of industry choice, the Australian market is dominated by financials and commodities, while offshore markets feature global leaders in media, technology and pharmaceuticals. Above all, the driving force for demand in global equities is valuation.

Youth mental health

While the attractiveness of global equities and the need for diversification make a compelling case for global investment, FGG’s true value is in its ability to create shareholder and social wealth.

FGG is a perpetual gift from the fund management industry to Australia’s future generation.

Nearly half of all Australians will experience a mental health problem in their lifetime. Adolescents and young adults are especially at risk, with 75 per cent of mental health problems first appearing before the age of 25.

Timely and appropriate help-seeking, particularly during adolescence, can reduce the long-term health, personal, economic and social impact of many of these mental health problems.

FGG is determined to transform youth mental health by driving philanthropic investment in three core areas:

  1. Helping the community understand the issue.
  2. Investing in the most effective programs and services.
  3. Enabling investment in research and development.

With the support of the investment community, it is hoped to create a  brighter future for young Australians affected by mental illness. For more information, please download our prospectus and fact sheet or visit here:

Indicative timeline

Date of replacement prospectus 9 July 2015
Offer expected to open 10 July 2015
Broker firm offer expected to close 21 August 2015
Offer expected to close 28 August 2015
Priority allocation offer closes 28 August 2015
Date of allotment/despatch of holding statements 7 September 2015
Trading of shares and options expected to commence on ASX 10 September 2015
Option expiry date 15 September 2017

FGG relies on the support and generosity of the following fund managers:

  • Magellan Asset Management Limited
  • Cooper Investors Pty Limited
  • IronBridge Capital Management L.P.
  • Paradice Investment Management Pty Ltd
  • Nikko Asset Management
  • Eastspring Investments (Singapore) Limited
  • Insync Funds Management Pty Ltd
  • Hunter Hall Investment Management Limited
  • Ellerston Capital Limited
  • Antipodes Partners Limited
  • VGI Partners Pty Ltd
  • Manikay Partners, LLC
  • Avenir Capital Pty Ltd
  • Morphic Asset Management Proprietary Limited
  • Optimal Fund Management Pty Ltd
  • Neuberger Berman Australia Pty Limited
  • Tribeca Investment Partners Pty Ltd

About the author

Geoff Wilson is chairman of Wilson Asset Management, a leading investment manager.

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The views, opinions or recommendations of the author in this article are solely those of the author and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN 98 008 624 691 and its related bodies corporate ("ASX"). ASX makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions. To the extent permitted by law, ASX excludes all liability for any loss or damage arising in any way including by way of negligence.

© Copyright 2015 ASX Limited ABN 98 008 624 691. All rights reserved 2015.
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