BLUE SKY FUND SECURES $60M
Written on the 12 June 2014 by Nick Nichols
BLUE Sky Alternative Investments (ASX: BLA) has beaten the low end of its target by raising $60 million for its new “fund of funds” vehicle, the Alternatives Access Fund.
Blue Sky had sought to raise a minimum of $50 million, and up to $100 million, through the IPO which the company says gives retail investors access to alternative investments that are otherwise restricted to institutions and sophisticated investors.
Investors secured 60.39 million shares at $1 each in Alternatives Access Fund which is expected to list on the Australian Securities Exchange on June 16.
Blue Sky says it will be Australia’s only directly managed, alternatives-focused listed investment company that will be available on a wide range of platforms, including MLC Wrap, BT Wrap and Macquarie Wrap.
Blue Sky says alternatives are the fastest growing asset class in Australia, increasing from 5 per cent of all investments in 1997 to more than 13 per cent at the end of 2013.
“This trend is continuing with almost 20 per cent of all investments forecast to be allocated to alternatives by 2033,” the company says.
Alternatives Access Fund is targeting long-term pre-tax returns of more than 8 per cent a year through investments in water entitlements, infrastructure, and income generating private equity and private real estate opportunities.
Blue Sky is leveraging off its strong performance since 2006 with pre-tax returns of 16.3 per cent per annum in private equity and 16.7 per cent in private real estate.
Alexander McNab (pictured), the Blue Sky investment director, says the listing of Alternatives Access Fund marks Blue Sky’s most important milestone to date.
“Now Australian investors can directly access the only actively managed diversified alternatives investment vehicle on the ASX,” he says.
Ben Wilson, from joint lead manager Ord Minnett Corporate Finance, says the listed fund attracted interest from financial planners, private wealth players, self-managed super funds and retail investors.
“While most Australian LICs invest in listed equities and fixed interest, the Alternatives Access Fund will hold a diversified portfolio of alternative assets managed by Blue Sky across the company’s four divisions of real assets, private equity and venture capital, private real estate and hedge funds,” Wilson says.
The move comes more than two years after Blue Sky listed on the ASX, making it the only listed fund manager in Australia focused on a diversified portfolio of alternative assets.
Blue Sky was established in 2006 by Mark Sowerby as a private equity investment vehicle and it has since expanded its operations across Australia and into New York.
The company has more than doubled its market capitalisation to $143 million over the past year.
Author: Nick Nichols