What’s Happening With The Magellan High Conviction Trust?

Yesterday, global fund manager Magellan Financial Group Ltd (ASX: MFG) announced the indicative raising size of its Magellan High Conviction Trust.

At the closure of the initial public offering, Magellan said that the High Conviction Trust had indicatively raised $862 million. That’s a lot of fixed money that Magellan will now be earning an attractive management fee from (1.5% p.a. plus a performance fee).

Magellan also disclosed that the estimated costs of the offer, including the loyalty units and IPO foundation units, that will be paid for by Magellan are around $55 million.

Management Commentary

Magellan co-founder and CIO Hamish Douglass said: “We are very pleased with the successful initial public offering for the Magellan High Conviction Trust which has raised approximately $862 million.

We received applications from approximately 17,000 investors participating in the Priority Offer and 1,800 investors participating through the General Public and Wholesale Offers. We welcome each and every investor and look forward to continuing our partnership over the years to come. We firmly believe our partnership approach is a win-win outcome for our investors and Magellan shareholders,” he added.

What Now?

The investors who participated in the priority offer will receive an extra 7.5% units, while the investors who took part in the general offer will get an extra 2.5% units.

The units to be issued under the offer are expected to be allotted on Tuesday the 8th of October, and the Magellan High Conviction Trust is expected to begin trading on the ASX a few days later on Friday the 11th of October.

Although I didn’t participate in the offer, I imagine the high conviction strategy will continue to perform well for a long time to come by investing in the best businesses in the world.

Disclaimer: At the time of writing, Jaz has no financial interest in any of the companies mentioned.

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