Closed fund nirvana: Fisher
The problems with the tax regime around unit trusts, plus the desire to tap into a new market of investors are resaons why Carmel Fisher has chosen a listed investment vehicle structure for her Kingfish fund.
Wednesday, March 3rd 2004, 7:22AM
Fisher says she wanted to get her management style to more investors but knew she needed a new vehicle as there are a group of investors who won’t go near a managed fund. Also tax was an issue.
“We knew we had to something in terms of tax efficiency because a unit trust is not tax efficient.”
She says the company had looked at using foreign domiciled vehicles, such as the Australian Unit Trust (AUT), which is currently favoured by New Zealand fund managers for tax purposes, but choose not to.
“They seemed to be vehicles which suited a loophole and we didn’t seem comfortable with that,” Fisher says.
Fisher currently is one of the two managers which advise the dual listed UK listed company NZ Investment Trust and knew that it was a legitmate structure which worked.
While listing in itself doesn’t provide tax benefits the way the fund has been established is designed to get around the tax issues facing managed funds.
Kingfish is essentially two funds. One is a long term buy-and-hold fund where the assets aren’t traded and therefore gains should be tax-free.
The other is a “nursery” and is a fund where new stocks are added to the portfolio. These can be traded and are taxed.
Fisher says the listed company structure is “nirvana for a fund manager” as they get a sum of money and can concentrate on investing it and don’t have to deal with issues such as redemptions and keeping liquidity in the fund.
“We can truly act like long term investors,” she says.
- FEATURE: Kingfish catches small fry
- Fisher on her new fund
- Fisher wins NZ Shares section of FundSource Awards 2003
| « Fund managers should disclose the size of their tax losses | Sovereign takes regulation bull by the horns » |
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