Australia’s best fund managers join for charity


Transcription of Finance News Network with Future Generation Investment Fund Limited (ASX:FGX) Founder and Director Geoff Wilson
Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me to discuss the launch of the first ASX listed fund to target returns for both investors & charities is the Founder and Director of Future Generation Investment Fund Limited (ASX:FGX), Geoff Wilson. Geoff, welcome to FNN.

Geoff Wilson: Thank you. 
Lelde Smits: You’re about to launch a new Listed Investment Company (LIC) targeting returns for both investors and charities. Who is behind the fund and what are the funds objectives?
Geoff Wilson: I’ve got together Australia’s best fund managers, or who I believe are Australia’s best fund managers. People like Peter Cooper, David Paradice, Phil King, some really good Australian managers. We’ve got 14 managers in total, they are managing money so it’s a fund of funds, but they’re all giving their management and performance fees, they are giving it back to the company, so they’re managing the money for free, at no cost. And, what that allows is the company to pay 1 per cent of its assets per year to children’s charities and focusing on children at risk. 
Lelde Smits: How exactly will Future Generation Investment Fund work in terms of investing and generating returns?
Geoff Wilson: The company will invest with the managers in their managed funds. These are the funds they live or die by the performance of, and the company will get returns from those investments, and then will flow through those returns to its shareholders. As it is a listed investment company it will pay fully franked dividends and the plan is to pay a growing stream of fully franked dividends to shareholders over time. 
Lelde Smits: Which charities has Future Generation Investment Fund identified to support?
Geoff Wilson: The focus is on children’s charities and children at risk. Charities like Youth off the Street, The Lighthouse Foundation which is homeless children, Act for Kids which is the old abused children’s trust, Unite Away which focuses on literacy for children from zero to five years of age, they are the type of charities. 
There’s 14 charities and the fantastic thing about this product, my view is that it’s a win-win-win. The fund managers are managing the money, they want to give something back, the investor is getting a fantastic deal, because he can’t get access to those fund managers and if he does he gets it a lot more cheaply here. And the charities get a source of funding for a long period of time. This potentially could be a game changer for the funding of those charities. 
Lelde Smits: How will the returns be divided between investors and charities?
Geoff Wilson: The charities will get 1 per cent of the assets per annum, and that is less than it would cost the investor to invest with those fund managers. The interesting thing is three of those fund managers are actually closed. Lanyon, Paradice and Cooper, it’s actually impossible to invest with them, a lot of the other managers are just wholesale managers so people can’t invest with them. If you’re invested with those managers, you’ll pay at least 1.3 per cent on average, management fees, and they all have performance fees except one, so the average performance fee is about 17 per cent. So, all that money goes back to the shareholders and only 1 per cent, which is less than what it would cost to invest in those funds, that goes out to charity, and the investor gets all the upside. 
Lelde Smits: How much is the fund looking to raise ahead of listing and when will you start trading?
Geoff Wilson: We are looking at raising up to $200 million and the issue closes on September 3 and the shares will start trading on September 15, 2014. 
Lelde Smits: Finally Geoff, how can potential investors get involved in Future Generation Investment Fund?
Geoff Wilson: The prospectus is open at the moment and you just need to go to the website and you can download a prospectus or you can actually apply online. 
Lelde Smits: Geoff Wilson, thank you for the introduction to a very worthwhile cause.  
Geoff Wilson: Thank you very much. 


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