Alexander McNab

Blue Sky Alternatives Access Fund Limited  has successfully completed a $20 million capital raise through a one for three non-renounceable entitlement offer.

The funds raised will be used to build on the listed investment company’s actively managed portfolio of alternative assets across private equity and venture capital, water and agriculture, hedge funds and private real estate.

The Blue Sky Alternatives Access Fund is the only listed investment company (LIC) on the ASX allowing investors to make a strategic allocation to a diverse portfolio of directly managed alternative assets.

Blue Sky Chief Investment Officer, Alexander McNab, said alternatives enhance the risk/return characteristics of a portfolio.

“Alternative assets have the potential to enhance returns, and with the share market and property valuation looking stretched, the diversification alternative assets provides is key to reducing a portfolio’s volatility and correlation to traditional markets,” Mr McNab said.

“The LIC gives investors the opportunity to invest in alternative assets through an ASX-listed structure that is more readily accessible and liquid than typical alternative assets.”

Blue Sky advised the capital is likely to be fully deployed in the next three months.

“We have a strong pipeline of investment opportunities across a wide variety of alternative assets,” Mr McNab said.

The new shares will be entitled to receive any dividend in respect of the year ending 30 June 2015, to the extent that any dividend is declared. The Blue Sky Alternatives Access Fund Limited’s board currently anticipates a partially franked two to three cent per share year-end dividend, subject to ongoing investment performance and portfolio realisations.

Ord Minnett Limited and Morgans Corporate Limited acted as joint lead managers for the capital raise.

The Blue Sky Alternatives Access Fund is managed by a wholly-owned subsidiary of Blue Sky Alternative Investments Limited.

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Alexander McNab

Blue Sky Alternatives Access Fund Limited will raise up to $20 million through a one for three non-renounceable entitlement issue of new ordinary shares.

The Blue Sky Alternatives Access Fund (BSAAF) is Australia’s only listed diversified alternatives investment vehicle. The directly-managed portfolio is invested across private equity and venture capital, water and agriculture, hedge funds and private real estate.

Blue Sky chief investment officer Alexander McNab said the raise would be a chance for investors to increase their exposure to alternatives as value in traditional asset classes becomes increasingly hard to find.

“Alternatives are becoming mainstream, they are the fastest growing asset class in Australia. The market is starting to understand the benefits of diversification and the increased returns an allocation to alternatives can bring to a portfolio,” Mr McNab said

“We are getting very positive feedback from the financial community, and there is significant interest from financial planners keen to access Blue Sky’s strong investment track record.

“The capital raised from the BSAAF IPO nine months ago has been fully deployed and the portfolio is performing well. We continue to see attractive investment opportunities in the alternatives sector and this entitlement issue will help feed this pipeline.”

Under the entitlement offer, eligible shareholders have the opportunity to subscribe for new shares at the issue price of $1.00. This represents a discount of 9.4 per cent to the ten day volume weighted average price (VWAP) of the company’s shares traded on the ASX over the ten days up to and including 10 April 2015.

The entitlement offer closes at 5pm AEST on Friday 1 May 2015. Any new shares not taken up by the closing date may be made available to those eligible shareholders who took up their full entitlement and applied for additional new shares under a top-up facility. Any shares not taken up by eligible shareholders under the entitlement offer or top-up facility may be offered to sophisticated or professional investors under a shortfall facility.

The new shares will be entitled to receive any dividend in respect of the year ending 30 June 2015, to the extent that any dividend is declared. The BSAAF board currently anticipates a partially franked two to three cent per share year end dividend, subject to ongoing investment performance and portfolio realisations.

Ord Minnett Limited and Morgans Corporate Limited are acting as joint lead managers for this issue.

The Blue Sky Alternatives Access Fund is managed by a wholly-owned subsidiary of Blue Sky Alternative Investments Limited.

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Alexander McNab

Blue Sky Alternative Investments Limited (Blue Sky) has allocated nearly 70 per cent of the $60 million raised for its Alternatives Access Fund (ASX: BAF) into alternative assets – including private equity and venture capital, water and agriculture, a hedge fund and private real estate. The Listed Investment Company (LIC) is Australia’s only listed diversified alternatives investment vehicle.

Blue Sky’s Chief Investment Officer Alexander McNab said a quarter of the Listed Investment Company (LIC) capital had been deployed to the Blue Sky Water Fund, which invests in water entitlements and returned 15.58 per cent for the financial year ending 30 June 2014[1].

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Alexander McNab

Strong investor interest has seen Blue Sky Alternative Investments Limited raise more than $60 million in an Initial Public Offering (IPO) of its Alternatives Access Fund, exceeding the minimum subscription level of $50 million.

The new Listed Investment Company (LIC), set to debut on the Australian Securities Exchange (ASX: BAF) on Monday 16 June, will be Australia’s only directly managed, alternatives-focused LIC, a unique investment vehicle available on a wide range of platforms[1].

Blue Sky’s investment director Alexander McNab said the listing marked Blue Sky’s most important milestone to date.

“Now Australian investors can directly access the only actively managed diversified alternatives investment vehicle on the ASX.”

According to Rainmaker data from December 2013, alternatives are the fastest growing asset class in Australia, increasing from five percent of all investments in 1997 to more than 13 per cent at the end of 2013. This trend is continuing with almost 20 per cent of all investments forecast to be allocated to alternatives by 2033.

Alexander McNab also thanked the joint lead managers to the offer Ord Minnett Limited and Morgans Corporate Limited, and co-lead manager Shaw Corporate Finance Limited for their role in the capital raising.

Ben Wilson from Ord Minnett Corporate Finance said they had received a lot of interest from financial planning, private wealth, SMSF and retail investors, who had found it hard to access alternatives until now.

“While most Australian LICs invest in listed equities and fixed interest, the Alternatives Access Fund will hold a diversified portfolio of alternative assets managed by Blue Sky across the company’s four divisions of real assets, private equity and venture capital, private real estate and hedge funds,” Ben Wilson said.

Official quotation of the company’s securities is due to occur on Monday 16 June 2014. The company raised $60.39 million under the offer by the issue of 60,391,800 ordinary shares each fully paid at an issue price of $1.00.

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[1] Blue Sky Alternatives Access Fund Limited (ASX:BAF) will be available on the following platforms and MDA providers: MLC Wrap, BT Wrap, Netwealth, Macquarie Wrap, Asgard, HUB24, Mason Stevens and Managed Accounts (IAS).

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In contrast to most Australian LICs, which invest in listed equities and fixed interest, the Blue Sky Alternatives Access Fund LIC will have a diversified alternatives focus and will be directly managed by Blue Sky’s experienced team.

The LIC will co-invest alongside direct investors in Blue Sky’s managed funds across the company’s four alternative asset classes of real assets, private equity and venture capital, private real estate and hedge funds.

According to Blue Sky’s investment director Alexander McNab, overseas investors have long enjoyed the benefits of substantial allocations to alternative asset classes but there have been barriers for Australian investors.

“There is a growing appetite for alternatives in Australia, but access and liquidity have been problematic. Until now, these funds were only targeted at institutional investors,” Mr McNab said.

“The Blue Sky Alternatives Access Fund is removing these barriers and providing financial planning, private wealth, SMSF and retail investors with a simpler way to get exposure to Blue Sky’s managed alternatives.

“Launching a listed diversified investment product has been a long-term strategy for Blue Sky,” he said.

In Australia, allocation to alternatives has almost tripled from five per cent in 1997 to 14 per cent in 2013, and is forecast to rise to nearly 20 per cent by 2033 according to a Rainmaker report from December 2013.

With a low correlation to traditional asset classes such as listed equities and bonds, alternative assets have the potential to reduce volatility and enhance portfolio returns.

Blue Sky, which launched in 2006 and listed in 2012, currently has a market capitalisation of $125 million and more than $550 million in assets under management.

Participants in the IPO will receive one separately listed option (exercisable at $1 for up to 18 months) for every share acquired in the IPO.

Ord Minnett Limited and Morgans Corporate Limited are joint lead managers of the offer, and Shaw Corporate Finance Limited has been appointed co-lead manager.

A prospectus (Prospectus) in respect of the offer has been lodged with the Australian Securities and Investments Commission and is available at blueskyfunds.com.au/accessfund.

The offer of securities by way of issue is contained in the Prospectus and you should consider the Prospectus in its entirety before deciding whether to acquire the securities.

If you wish to acquire securities under the offer you will need to complete the application form that will accompany a copy of the Prospectus once the ASIC exposure period has ended.  You may not apply for securities under the Offer before that time.

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