News Round Up

Worries about finance companies, Salvus offer successful, FPIA Success Forum.

Monday, June 21st 2004, 6:54AM

The burgeoning finance company scene is in for a shake-up with one or more failures to be expected, the first in-depth research study on the sector has predicted.

A significant report by independent broking house McDouall Stuart has baldly stated that some finance companies pose a significant risk to investors a risk for which they are being "woefully compensated."

It highlights how some investors are getting interest rates of only 1% above the 90-day bill rate or less despite taking on this risk.

That means they could get practically the same return from putting their money into nice, safe, government-backed stock. [MORE]

MONEYfund offer extended
Liontamer has decided to extend the closing date for its innovative MONEYfund for another two weeks.

The new closing date will now be Friday 2 July 2004.

Liontamer says it is working on an idea for a new fund with an estimated launch date around the end of July.

Salvus offer gets away
Salvus Strategic Investments has confirmed that it had received sufficient investor support through investor applications and other firm commitments to proceed with its planned sharemarket float.

Advice from the lead managers and organising participants, Forsyth Barr and Direct Broking, was that Salvus had raised more than the minimum subscription level of $20 million required for the IPO to proceed.

It has had support from the New Zealand public as well as local and United Kingdom-based institutions.

Salvus is looking to raise money to invest in listed shares and it will have a focus on the burgeoning smaller company sector.

Partial closure of two PM Capital funds
PM Capital is proceeding with a “soft closure” of the PM Capital Absolute Performance and Australian Opportunities Funds. The company first announced its intention to restrict the size of these two funds in September last year.

It says it is necessary to close them at some stage otherwise they could become too big.“It is necessary that the performance of these equity funds is not inhibited by the burden of managing excess funds.” Under the soft closure PM Capital will no longer accept money from some sources.

A full, or hard closure, may follow.“If our ability to manage money and hence perform for our clients is restricted by an extra dollar of FUM, then at that stage, we will close the equity funds to all investors.”

It says there aren’t too many restraints on the Absolute Performance Fund: “Being a global investment fund has very little capacity constraints - it is a big world.”However, the Australian Opportunities Fund, being a concentrated long/short Australian equity fund will perform at its optimal level if it does not grow beyond A$500 million.

Enrol for the FPIA Success Forum today
Don’t miss out on securing a place at the Financial Planners and Insurance Adviser Conference. Register today.

The Success Forum is being held in Auckland and promises to be an excellent event with a range of high caliber speakers.

Good Returns is pleased to support this year’s Success Forum, which is being held in Auckland from July 21-23.

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