Hearts and Minds Investments Limited (ASX:HM1) Chairman, Chris Cuffe talks about the LIC's investment approach and the charitable goals of the company. Hearts and Minds Investments listed on the ASX on 14 November 2018. You can learn more about the LIC at www.hm1.com.au.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network with the Hearts & Minds Investments Limited (ASX:HM1) Chairman, Chris Cuffe. Hi Chris and welcome to the Network.
Chris Cuffe: Hi Jessica.
Jessica Amir: Congratulations on the listing today. So for those who don’t know, just give us an introduction to the company and the investment vehicle.
Chris Cuffe: The Company’s called Hearts & Minds Investments Limited (ASX:HM1) and it’s a listed investment company. We raised $500 million and as you’ve said, it listed today, so we’re all very proud of that. And the company will own 25 stocks, so it’s a concentrated portfolio. Stocks in both Australia and offshore, so probably more than half the portfolio will be offshore. But the key thing with it is that almost everybody involved with it is doing it pro bono. And in lieu of that, we’re giving away 1.50 per cent of the value of this investment company every year, to medical research organisations in Australia. So hopefully it’s a win win for investors and the medical research industry.
Jessica Amir: Now can you tell us about the insights that’ll be provided from the fund managers, into the fund and why that’s important?
Chris Cuffe: There’re two groups of fund managers, so one group we call the core fund managers. That’s 60 per cent of the portfolio will be invested in stocks that they recommend. And there’re five core fund managers. There’s Caledonia, Cooper Investors, Magellan Group, Paradice and Regal Funds Management. And so each of those groups will provide us with an ongoing list of what their top picks are. And we will use three stocks from each of those managers. So that’s five managers times three stocks, that’s 15 stocks, so that’ll be 60 per cent of the portfolio.
And the other 40 per cent of the portfolio will come from managers, who present at the yearly Sohn Hearts & Minds conference, which happens to be on this Friday in Melbourne. So we’ll take 10 of those picks from those fund managers, so in total 25 stocks, which makes it a concentrated portfolio. But it’s from what we would regard the best managers across Australia. And because each manager is different to the other, you get quite an eclectic mix, which should be very good.
Jessica Amir: Touching back on the float itself, you received the maximum subscription, $500 million just in the first three days. Just tell us about why you think people really barracked behind the fund, and why it’s so important?
Chris Cuffe: It was an extremely strong demand, it was much stronger than what we had anticipated at the start. But we’re only after $500 million, we didn’t want more than that. I think this has hit a cord, people I think like the concept of a charitable giving at the backend of it. So as we’ve said, all the fund managers and other people involved with it are doing it pro bono. And medical research in Australia is the beneficiary. But they know they’re accessing fund managers that you might not necessarily be easily able to invest with, either their sum of money, or whether their funds are open. And these fund managers are hand picked by us, so I think people are getting an easy one-stop shop group of managers.
Jessica Amir: Lastly Chris. What’s the long-term ambition for the company?
Chris Cuffe: We’ve raised the money now, so we’ve got to get on with the investing. But the key will be invest well, as I’ve pointed out, the managers we’re using we think are the top of their game. And then really getting the donations going to the medical research groups in Australia. And Australia leads the world in medical research, and we do a lot there. So this will provide, if you look at $500 million starting point 1.5 per cent, that’s $7.5 million from day one is going to these organisations. So it should make a real impact.
Jessica Amir: Chris Cuffe, thank you so much and congratulations on the listing and well done on the initiative.
Chris Cuffe: Thank you very much.