A: Thanks for the question on the new listed investment company from Platinum, Platinum Asia Investments Limited.

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 (track record of 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 oversubscriptions. 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.

Bottom line – if you miss out in the IPO, you won’t pay that much more, if at all, by buying the shares subsequently on the ASX.

As to the relative merits of the LIC versus the existing fund, I understand that the same investment strategy is to be deployed; as a quoted product, pricing should be more transparent; and that the fees in the LIC may be lower if it becomes big enough (1.1%pa plus company expenses plus GST vs 1.54% pa). A potential downside is that the LIC also pays a performance fee, whereas the managed fund doesn’t do this in the standard option. There are also some tax differences.

Bottom line – I probably prefer the LIC – if I was investing over $500,000, I would look at the managed fund and the performance fee/lower base fee option.