Q: Our SMSF has holdings in the Platinum International Fund, its European fund and also in Platinum Capital Listed, and we received an invitation to invest in Platinum’s new Asia focused listed investment company (LIC) - PAI. Could you please comment on the relative merits of investing in PAI, as opposed to investing in the existing Platinum Asia Managed Fund?
A (by Paul Rickard): The key question is – do you want to invest in Asia (ex Japan)? If you do, this is a good vehicle to do it through (based on the track record of the manager, proposed management fee, listed investment company structure). If you don’t, then go no further.
I wouldn’t get too hung up about the “Priority Offer”. This is a marketing strategy, and they will take over-subscriptions. You will be paying $1.00 for a share that is really worth $0.98 – due to broker placement fees. Okay, so they will throw in a free option to buy more shares at $1.00 – however in the medium term, this will potentially cap any rise in the share price as exercised options at $1.00 will dilute the overall asset value.