Veteran stock-picker Geoff Wilson’s passion project, Future Generation Investment Fund is off to a solid start. The latest in a raft of listed investment companies to hit the local boards in the past year, it has been well received as investors embrace the chance to generate money for kids charities, while earning returns from a who’s who of the local funds management industry.

Future Generation Fund is a $200 million listed investment company with allocations to 14 local fund managers, all of whom have agreed to donate their management and performance fees. The fund has a mandate to donate 1 per cent of total assets to Australian children’s charities every year. “I am very proud of the local financial services industry today and hope this represents a new phase in Australian corporate philanthropy,” said Wilson Asset Management chairman Geoff Wilson, who was the driving force behind assembling the Future Generation Fund, addressing the listing ceremony in Sydney on Monday via video link.

Participating fund managers were hand-picked by Mr Wilson and his chief executive officer Kate Thorley. Among the 14 firms managing money pro-bono for the fund are Eley Griffiths Group, Paradice Investment Management, Regal Funds Management, and Watermark Funds Management.

“The fund represents an evolution in funding philanthropic endeavours akin to social venture bonds and crowd sourcing,” said Peter Edwards, the boss of Victor Smorgon Group – an investor in Future Generation. “As a family that’s involved in both the operation and funding of charities, we are very excited to be investing in this type of forward-thinking organisation, which provides a win for investors, a win for fund managers, and a win for children’s charities,” Mr Edwards said.

Other high profile investors that have invested in the LIC include the mining magnate and philanthropist Fortescue Metals Group chairman Andrew “Twiggy” Forrest, and the legendary retailer Premier Investments chairman Solomon Lew.

Investors who tip in more than $1 million are allowed to pick their favourite registered children’s charity to receive the benefit from their investment, otherwise the annual donations will be spread across a range of charities chosen by the Future Generation Fund board.

“When the fund approached us they had already done their due diligence on how we run the charity as if we were a business they were considering investing in,” said Neil Carrington the chief executive officer of ACT for Kids, an organisation that provides intervention and treatment for abused and neglected children.

“We are hopeful that being a recipient of the Future Generation Fund will provide between $80, 000 to $100,000 a year – enough to hire one full-time senior counsellor,” Mr Carrington said.

Stock closes at $1.06 on first day

The shares began trading at $1.08, slightly under the $1.10 offer price, and closed the first day of trade at $1.06.

Wilson Asset Management chief investment officer Chris Stott said he was pleased with how the shares performed on debut.

“Because LIC’s are clearly valued by the worth of the assets in the fund, they usually begin trading at a discount,” Mr Stott said.

When the 6¢ value of the options issued to all shareholders taken into consideration, Future Generation Fund is trading at a slight premium to its $1.10 per share offer price.

The fund is chaired by Jonathan Trollip, who also chairs LIC Global Value Fund. Other directors, alongside Mr Wilson, are Sandon Capital managing director Gabriel Radzyminski, and Paul Jensen who sits on the investment committees of both Wilson Asset Management and Sandon Capital.

The structure for Future Generation Fund was modelled on that of British-based charitable fund, Battle Against Cancer Investment Trust.

Since it was established two years ago, BACIT has since doubled its capital and, as at July, has delivered shareholders an annualised return of 11.8 per cent. Meanwhile, BACIT has donated approximately £3.2 million ($5.8 million) to British-based cancer charities over that period.

Back to blog