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Event recap: Mainstream Breakfast Session on the Convergence of Listed and Unlisted Funds

Mainstream Breakfast Session on the Convergence of Listed and Unlisted Funds

 

Quoting unlisted funds on ASX was the key topic of discussion at Mainstream’s “Convergence of Listed and Unlisted Funds” Breakfast Session in Sydney last week.

Nearly 200 fund managers and industry professionals attended the Mainstream Breakfast Session at Sydney’s Establishment Ballroom on 20 February 2020.

Mainstream’s Group CEO, Martin Smith, opened the event by summarising the current state of play of unlisted and listed funds in Australia. He then outlined how offering a single registry solution for both on-market and off-market investors within one fund is an industry first.

This was followed by a panel discussion featuring Brett Cairns (Group CEO, Magellan Financial Group), Alva Devoy (Managing Director, Fidelity International Australia), Bill Fuggle (Partner, Baker McKenzie), Darren Miller (Associate Director, Macquarie Securities (Australia), and moderated by Andy Harrison (Australia CEO, Mainstream Fund Services).

The panel discussed the evolution of the Australian fund industry, from mFunds to active ETFs, with unlisted funds being quoted on ASX to be the next wave of investment vehicles.

Mainstream predicts that allowing investors – and their brokers – to seamlessly access listed and unlisted funds will change the investment landscape in Australia.

Investors will be able to access an investment manager’s pool of assets through different entry points and then have the flexibility of moving their units between their brokerage account and the issuer sponsored sub-register.

Under this model, managers will only need to run a single register for their off-market, or unlisted fund investors, and on-market investors.

For a manager considering quoting their unlisted funds on ASX, key considerations are:

  1. Is your fund open ended, with sufficiently liquid underlying assets?
  2. Are your target investors looking to access your IP through different entry points?
  3. What changes are required to your fund’s constitution and offer documents?

“When an unlisted fund is listed on ASX, existing off-market investors can be issued with a shareholder reference number, or SRN, so they effectively hold issuer sponsored units in the fund. The investor can then transfer these units to a holder identification number, or HIN, with any broker for trading on exchange – just like BHP shares.” explained Martin Smith, Group CEO of Mainstream.

Quoted funds are likely to appeal to managers currently running both unlisted and funds. It gives them the opportunity to collapse their existing fund structures into single vehicles.

Moving forward with Mainstream

Our goal is to remove the barriers impeding investors from transacting in listed and unlisted funds.

More information