Pinnacle has knocked off performance fees from its bid to manage the Blue Sky Alternatives Access Fund, bringing it in line with Wilson Asset Management's bid, according to LIC's directors.
The two managers have put in proposals to gain the management of the listed investment company that has traded at a discount to its NTA, as it separates from its current manager Blue Sky Alternative Investments Limited (BLA). Aware Water Group has also made a proposal to acquire BAF's interest in Blue Sky Water Fund.
On October 18, Pinnacle and BAF's board reached an agreement under which new Pinnacle boutique Alterum was to take over as BAF's manager next year. The new boutique is to be led by BAF executive chair Andrew Champion, per the original agreement.
Today, Pinnacle amended its investment mandate and is now offering to manage BAF at 1% per annum (ex GST) management fee in total, with a no-fee period of existing investments until 1 July 2019.
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This gets rid of the earlier proposal's performance fee of 7.5% of the fund's outperformance over an 8% pa fixed benchmark.
Second, Pinnacle has also amended the initial fixed term to contract to five years, after which shareholders will be able to vote out the Alterum agreement on three months' notice.
Lastly, Andrew Champion will not seek re-election to the board of BAF at the December extraordinary general meeting to reflect his commitment to the proposal, in consultation with the BAF board.
"BAF's independent non-executive directors welcome these proposed amendments, which bring the Alterum arrangements in line with the terms proposed by WAM (as announced on October 24) in respect to these key matters. All other terms of the Alterum MSA remain unchanged," The BAF board said in a statement.
Wilson Asset Management's October 25 draft proposal is currently being reviewed by an independent expert, the BAF board said today.
Aware Group made a proposal to acquire BAF's interest in the Blue Sky Water Fund for $4.4 million or 8.8% discount to the then most-recently reported book value. On Nov 2, BAF confirmed Aware was willing to up its offer.