SYDNEY, AUSTRALIA: ARC Funds Ltd (ASX:ARC) announced to launch ARC Emerging Managers (AEM) as an unlisted unit trust, with the launch scheduled for late 2022 or early 2023.
On 10 th May 2022, ARC announced to the ASX that it had entered into an agreement (the Novation and Implementation Deed) to acquire the investment management rights in respect of LAN, with the intention being to repurpose LAN as the ARC Emerging Managers LIC.
Since then, following due consultation with investors and the LAN board, ARC has decided that it is in the best interests of our shareholders and the prospective AEM investors, for AEM to be structured as an unlisted trust and not a LIC. ARC Investment Management Pty Ltd, an 85% owned subsidiary of ARC, will continue to hold the investment management rights of the proposed AEM.
ARC believes this new structure will benefit the fund raising process and provide greater flexibility in underlying investments, remove the NTA discount risk prevalent with many LICs and will allow the fund to operate on a substantially reduced cost base.
ARC Managing Director, Harley Grosser, said “We’ve spent the last month engaging with advisers, brokers and investors nationally and the overwhelming response to AEM was that it represents a unique product that fills a gap in the portfolios of many advisory groups, family offices and High Net Worth individuals. In listening to investors, we have learnt that the demand for AEM is far greater when structured as an unlisted product rather than as a Listed Investment Company, and we have made this decision accordingly.
The market has given us a clear signal that the demand for AEM is significant, and we are responding to this feedback.”
ARC Investment Management Pty Ltd, an 85% owned subsidiary of ARC, also continues to hold the investment management rights in respect of LAN.
ARC will work with the Board of LAN to seek to determine the best options for shareholders of ARC, and next steps for LAN.