Dear Unitholders
Monash Absolute Investment Fund ARSN 606 855 501
Monash Absolute Active Trust (Hedge Fund) ARSN 642 280 331 ASX: MAAT
Monash Investors Pty Ltd (Monash Investors) on behalf of the Trust Company (RE Services) Limited (Responsible Entity), announced today that it intends to update and refocus the investment parameters of the Fund, highlighting Monash Investors’ expertise as a small cap manager and repositioning the Fund for new investors.
Since inception :
- the Fund’s equity investments have been predominately listed small cap companies (the small cap investments representing an average of approximately 90% of its total equity investments);
- the Fund has not held material short positions and generally the Fund’s average shorting exposure has been approximately 6%
- the Fund has not entered into any derivative (exchange traded or OTC); and
- the Fund has not borrowed any cash.
Monash Investors will continue to invest the Fund in a diverse portfolio of small companies listed on the ASX, outside S&P ASX100. Monash Investors will seek only to invest in compelling opportunities. To identify these opportunities, Monash Investors will primarily employ fundamental, bottom-up company research and the judgement of its experienced portfolio managers, Simon Shields and Shane Fitzgerald.
What changes are being made?
Monash Investors intends to update and narrow its investment parameters to focus on how the Fund has generated returns. This will involve:
- changing the name of the Fund to “Monash Investors Small Companies Trust (Hedge Fund)”;
- updating the investment objective and narrowing the investment strategy of the Fund to reflect Monash Investors’ expertise as a small cap manager;
- removing the discretion to enter into derivatives or borrow cash; and
- updating the distributions policy.
A summary of the proposed changes is set out in the table below.
How and when will the changes occur?
Monash Investors will work with the Responsible Entity of Fund to implement the changes set out in Annexure A at least 30 days from the date of this notice, which is 10 July 2023 by:
- updating the Product Disclosure Statement and Target Market Determination for the Fund;
- making consequential amendments to the investment management agreement with Monash Investors; and
- making the applicable filings with the Australian Securities and Investments Commission and the Australian Securities Exchange.
| Current | Proposed change | |
| Name | Monash Absolute Investment Fund | Monash Investors Small Companies Fund |
| Investment objective | The Fund aims to deliver double digit returns while limiting loss of capital over a full Market Cycle.
The Market Cycle is the time period over which the stock market reflects the strong and weak phases of an economy. This typically has previously occurred over circa 7 years (though this is not indicative that it will continue to be the case). |
The Fund aims to outperform the S&P/ASX Small Ordinaries (Total Return) Index over a full Market Cycle.
The Market Cycle is the time period over which the stock market reflects the strong and weak phases of an economy. This typically has previously occurred over circa 7 years (though this is not indicative that it will continue to be the case). |
| Investment strategy | Monash Investors seeks to implement the Fund’s investment strategy by investing in predominantly Australian listed equities (long biased/short), with international listed equities expected to average no more than 5% over seven years. The Fund may also invest in Australian unlisted equities, exchange traded and OTC derivatives, cash and cash equivalent investments. | The Fund is an actively managed Australian small companies fund predominantly invests in securities that are generally trading outside the S&P/ASX 100 Index.
The Fund has a net exposure range of 90 -100% of net asset value (NAV), however it also has a limited capacity for short selling. |
| Derivatives | Both exchanged traded derivatives and derivatives traded over the counter may be used by the Fund from time to time to manage risk or gain investment exposure if Monash Investors believes this to be in the best interests of investors in the Fund. | The Fund will not invest in derivatives. |
| Borrowing cash | From time to time, the Fund may borrow cash using an overdraft facility with the prime broker. | The Fund will not borrow cash. |
| Distributions policy | The Responsible Entity intends to target a cash distribution of at least 1.50% of NAV each quarter. Distributions can be made more or less frequently at the Responsible Entity’s discretion.
Distributions are automatically reinvested unless you instruct the administrator otherwise in the application form. |
The Responsible Entity will determine distributions annually as at 30 June each year. Distributions will be paid as soon as reasonably practicable and in any event within 90 days of the calculation date.
Distributions are automatically reinvested unless you instruct the administrator otherwise in the application form. |