Andrew Champion

Blue Sky Alternatives Access Fund Limited (ASX:BAF) has announced a successfully completed $47 million capital raise through a one for three non-renounceable entitlement offer to existing investors and shortfall offer to new investors. The shortfall offer was opened on Thursday 10 November and closed on the same day heavily oversubscribed.

The funds raised will be used to continue to grow a diversified and actively managed portfolio of alternative investments providing shareholders with a meaningful yield as well as an attractive capital gain opportunity through a Listed Investment Company (LIC) structure.

Blue Sky Alternatives Access Fund director Andrew Champion said the strong support for the raise was due to a growing awareness around the benefits of alternatives as well as the unique nature of the fund’s product offering.

“Financial planners nationally are increasingly looking for attractive opportunities to diversify their client’s portfolios into alternative asset classes,” Mr Champion said.

“The Blue Sky Alternatives Access Fund is Australia’s only LIC that allows investors to make a strategic allocation to a diverse portfolio of directly managed alternative assets, making it more accessible and liquid than typical alternative asset investments.”

Alternatives are the fastest growing asset class in Australia. Funds under management allocated to alternatives increased seven per cent to $422 billion in the last financial year. In the past three years the asset class has grown 70 per cent, increasing its market share from 15 to 20 per cent.[1]

The Blue Sky Alternatives Access Fund’s asset allocation includes investments in Australian water entitlements, agricultural and water infrastructure assets, purpose-built student accommodation and medium density retirement living as well as private equity investments into Australian growth companies.

Since IPO in mid-2014, BAF’s portfolio has generated a compound annual return of 9 per cent per annum to 31 October 2016[2] over a period where the ASX200 Accumulation Index has delivered 3.9 per cent.

“We continue to see a strong flow of investment opportunities across all of Blue Sky’s alternative assets classes and the capital raised will allow us to continue to broaden and deepen our portfolio of alternative investments.” Mr Champion said.

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

The Blue Sky Alternatives Access Fund is managed by a wholly-owned subsidiary of ASX 300-listed Blue Sky Alternative Investments Limited (ASX: BLA). Blue Sky Alternative Investments has a track record of generating returns to investors across its funds of 16.7 per cent per annum net of fees since inception in 2006.

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The portfolio consists of 10 suburban hotels in Adelaide with significant infrastructure and diverse revenue streams.

GM Hotels will be run by CEO Greg Maitland who has an extensive history in the pub industry nationally and is a long time resident of Adelaide.

“I am looking forward to the opportunity to partner with Blue Sky and to focus on the operational performance of the portfolio in my home town,” Mr Maitland said.

Blue Sky Private Equity executive Andrew Champion said Blue Sky had been looking for the right opportunity in the pub sector for a number of years.

“We are attracted to the defensive nature of these pubs flowing from their scale, multiple revenue streams and their strong suburban catchments. These hotels are well operated and invested however there are selective operational improvement opportunities and surplus land assets we will exploit in due course,” Mr Champion said.

“We are also delighted to be partnering with Greg who has a proven track record.”

GM Hotels includes the Beach Hotel, Christies Beach Hotel, The Lodge and the Tower. All are suburban pubs located between five and 40 kilometres from the Adelaide CBD.

The portfolio includes three freehold going concerns and seven long leasehold going concerns, with an average leasehold period well in excess of 30 years. GM Hotels is expected to deliver a stable earnings base and a double digit cash yield to investors.

Blue Sky Private Equity is a division of Blue Sky Alternative Investments Limited.

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