Consider APL done, dusted and removed from the LIC/LIT market. The announcement is extraordinary in a number of ways. One, tender offers (the ‘CTO’) have limited impact, two, LICs are a hell of a lot of work, and three, the future is (for an international equities strategy) via an ETF. Also, consider it Hyperion eating Antipodes, in some respect. You can only imagine. Right?
The first point to note that APL and AGXT1 are not the same investment vehicles. APL is a long / short vehicle. AGXT1, due to daily market liquidity ETF issues, is long only. Hence, this goes to a shareholder vote (75% required). And the masses will votes for it – they all like full market exposure these day versus being, for eg, 85% long exposed.
Whether AGXT1 (Antipodes / Pinnacle) ultimately benefit from this in terms of net FUM is highly questionable. But just like the CTO, this is as much about Pinnacle reputation as anything. If you need to burn Antipodes to do so, so be it. Active ETFs is a winner takes all environment – can’t see a (even good) Value manager thriving.