Emerging Companies Fund
Early-entry to major growth companies | 2024 - Tranche 3
Product Type
Managed Fund
Distribution
10% p.a
Payment
Quarterly
Term
3 Years
Summary
The Emerging Companies Fund gives investors exposure to Gleneagle’s proprietary strategy and the opportunity to co-invest with us.
Technological advancements, societal shifts, economic conditions, geopolitics, and unexpected global events such as the pandemic, play pivotal roles in shaping the investment landscape.
Over decades of global metamorphic change, entire industries have been birthed, evolved, matured, and for some, diminished. With so much opportunity in the market, the most arduous task for investors is identifying which upcoming ventures to pay attention to.
Innovation and technologies create opportunities for new industries and disrupt existing ones.
Economic cycles, regulatory changes and events like energy crises drive sector rotation and create shifts in demand.
Globalisation opens up new markets, while environmental, social, and governance (ESG) considerations impact investor sentiment and allocation.
Fund Objectives
Gleneagle seeks to leverage global thematics by acquiring early-entry into listed or unlisted companies that align with these themes and are uniquely positioned for exponential growth.
The fund seeks to pay 10% p.a income to investors throughout the 3-5 year term, with final profits realised and distributed at maturity.
Short Term Objectives
Distribution Paying
10% p.a
Payment to Investors
Quarterly
Long Term Objectives
High Growth
Capital Appreciation
3-5 Year Maturity
Final Profits Realised
Sophisticated Investors
To be considered for this investment product; applicants must supply evidence they qualify as a Sophisticated Investor
The U.S. and mega cap stocks were last decade’s growth stars
However, history shows that thematic shifts give rise to new stock leaders that differ from those that led in previous years. The dominant stocks of one decade do not extend to the next, with rare exceptions like Microsoft, GE and Walmart.^
1950’s:
European Stocks
1960’s:
‘Nifty Fifty’
1970’s:
Emerging Markets / Commodities
1980’s:
Japanese Stocks
1990’s:
American Tech
2000’s:
Emerging Markets / Commodities
2010’s:
American ‘Mega Caps’
Cumulative % Return (USD)
Source: ^Bloomberg. Chart provides simplified visual representation of data sourced from: MSIM, Bloomberg, Factset, Haver.
It's Time to Look for New Leaders
Gleneagle is pursuing early entry into the sectors and stocks shaping the next decade.
The fund provides exposure to these emerging companies, and others that Gleneagle may identify throughout the term of the fund.
3D Printing
& Material Technology
Company 1
Company 1 provides cutting-edge additive manufacturing technology, which applies durable layers of speciality metals onto surfaces.
Type | Listed Company |
|---|---|
Industry | Materials & Technology |
Gleneagle Commitment* | > $4,050,000 AUD |
Company 2
Company 2 is a market leader of digitally enabled health care in the United Kingdom (UK).
Type | Listed Company |
|---|---|
Industry | Health Care & Technology |
Gleneagle Commitment* | > $1,750,000 AUD |
Data &
Digital Health
Fund Manager Comment
“They not only met financial targets for 2023, but continue to innovate their offering, diversify revenue streams and build margin progression for the future. This is a prime example of a company’s share price being disconnected from its operational performance, exactly what we look for.”
Drones
& Defence
Company 3
Company 3 is a pioneer of hardware and software technologies which enable global drone and unmanned vehicle operation.
Type | Listed Company |
|---|---|
Industry | Technology Hardware & Equipment |
Gleneagle Commitment* | > $5,400,000 AUD |
Fund Manager Comment
“This isn’t a traditional technology play. We’re talking about the Intellectual Property that’s actively shaping the global adoption of drones – from Defence through to Transport, Retail, Mining, Agriculture and beyond. This Company is at the tipping point for exponential growth.”
*Gleneagle Commitment figures are inclusive of Gleneagle and its Beneficial Owners’ current and committed holding in each company. These figures may be updated from time to time, should there be considerable material changes. Listed companies are subject to daily fluctuations in the market price of the share. All figures are reflected in AUD, and are subject to daily fluctuations in exchange rates if the company’s valuation is designated in a currency other than AUD.
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Investment Process
Source
Qualify
Due Diligence
Active Management
Exit
Investment Terms
Distribution
10% p.a
Payment
Quarterly
Term
3 Years
Investment Overview | Gleneagle Asset Management Limited (ABN 29 103 162 278, AFSL No. 226199) (Gleneagle) has established the Fund to facilitate Eligible Investors acquiring an economic interest in listed or unlisted emerging companies. The Fund’s sole purpose is to invest in these companies. |
Investment Universe | Listed and unlisted global equities and global swaps. |
Legal Structure and Currency | The Fund is an Australian unit trust. Units in the Trust (Units) are fully paid. This class of Units are referred to as Tranche 3. All dollar amounts referred to in this Term Sheet are in Australian dollars. |
Trustee and Manager | Gleneagle Asset Management Limited (ABN 29 103 162 278, AFSL No. 226199) is the Trustee and Manager of the Fund. |
Eligible Investors | Interests in the Fund are only available to persons who are wholesale clients for the purposes of the Corporations Act 2001 (Cth) (Corporations Act). |
Target Raising | Gleneagle is proposing to raise $10 million, however the Trustee may close that class of Units and create a new class being the next tranche |
Application Cut Off and Application Moneys | Applications will generally be processed on the first business day of each month. The application form, wholesale status, any information requested and cleared funds (Approved Applications) must be received by the Trustee on or before the 25th of each month to be processed on the first business day of the next month, otherwise it will be processed the subsequent month. Application monies will be held in an account which may be interest bearing until invested in the Fund (or returned to the Applicant) and that interest (if any) earned on this account will be retained by the Trustee. |
Minimum Investment | The minimum investment by any Investor will be $50,000 unless permitted by the Trustee. All subscription amounts must be paid in Australian dollars. |
Closing Dates | The first close of Tranche 3 is expected to occur on 30 September 2024 (First Closing) for which Approved Application must be received no later than 25 September 2024. The issue price of a Unit issued on the First Closing will be $1.00. Subsequent closings may be held at the discretion of the Trustee, provided that the final closing will occur no later than 12 months after the date of the First Closing being 30 September 2025 (Final Closing). |
Term of the Fund | The Fund will have an initial term of 3 years from the First Closing ending on 30 September 2027 (3rd Anniversary), which may be extended by up to 2 additional extensions each of 1 year as determined by the Trustee in its discretion ending on 30 September 2028 (4th Anniversary) and 30 September 2029 (5th Anniversary), respectively. The Trustee must give at least 1 months prior notice (Extension Notice Period) before extending the term of the Fund beyond the 3rd Anniversary and the further extension beyond the 4th Anniversary. |
Withdrawal and Transfer from the Fund | Investments in the Fund are illiquid. Subject to the below, Investors have no right to redeem their Units prior to the 3rd Anniversary or, if the Fund is extended as referred to above, during either of the 2 extension periods. If the Fund is extended beyond the 3rd Anniversary or the 4th Anniversary, Investors may request the redemption of their units after they receive an extension notice from the Trustee prior to the end of the relevant Extension Notice Period (i.e. by the 3rd Anniversary or the 4th Anniversary as applicable). If a redemption request is accepted by the Trustee the redemption proceeds will generally be paid within 15 business days after the 3rd Anniversary or 4th Anniversary. The redemption of Units in such circumstances will be funded by selling assets and/or by borrowings secured by lodging stock owned by the Fund with the lender. Any interest charged by the lender will be paid from the assets of the fund. However, the acceptance of all or some of the Units subject to redemption requests and the time for paying out any accepted redemption requests is at the Trustee’s absolute discretion. An Investor may only transfer any of its Units with the prior written consent of the Trustee in its absolute discretion. Investors may seek to sell or transfer their units by notifying the Trustee in writing which will use commercially reasonable endeavours to facilitate the sale of those Units. |
Distributions | The Trustee intends that the Fund will pay an annual distribution yield of 10% per annum (i.e. 2.5% per quarter), which may be paid out of the income or capital of the Fund and may be funded by borrowings secured by lodging stock owned by the Fund with the lender. Any interest charged by the lender will be paid from the assets of the fund. Distributions will be paid in cash and payments will be made quarterly, based on the 2.5% per quarter in proportion to the time those Units have been invested in the fund for that quarter. Distributions cannot be reinvested in the Fund. The Fund will not be distributing dividends that have franking credits for taxation purposes. |
Operational costs and expenses (including Administration, Audit, and Registry Costs and Expenses) | Operational costs and expenses are costs incurred in managing the Fund which directly reduce the return on a product. The Trustee is entitled under the Trust Deed to be reimbursed out of the Fund’s assets for the costs and expenses incurred in the proper performance of its duties as the Trustee of the Fund. Operational costs and expenses include the fee charged by the Administrator, Auditor, Registrar and other expenses which relate directly to the Fund. The Trustee will be reimbursed operational costs and expenses of up to 0.5%1 per annum, of the Funds NAV (before Performance Fees and the operational costs and expense recovery) calculated on the last business day of each month and accrued monthly in arrears and paid within 15 business days after the month end out of the Fund’s assets. |
Establishment Fee | The Trustee is entitled to receive a once off establishment fee of 4%1 paid out of each investor’s subscription amount which will be used to, without limitation, fund the establishment costs and expenses below. |
Establishment Costs and Expenses | All costs incurred in the establishment of the Fund and other operational costs and expenses not recovered from the Fund, will be paid by the Trustee in its personal capacity from the establishment fee. Transaction costs incurred in relation to the acquisition of the Fund’s assets or its borrowings will be borne by the Fund. |
Performance Fee |
|
Risks | The risks of investing in emerging companies i.e. early stage ventures is typically seen as a highly risky venture, with the potential to bring in high returns. Emerging companies aren’t a commonality and only a limited number succeed. It is not suitable for conservative or risk-averse investors or those who cannot recover from capital loss or have a short term outlook. There is also the liquidity risk and sellers might have to wait for liquidity events to get their money out. The other risk is majority control where the founders' interests might be poorly aligned with those of small investors. Gleneagle Group, its partners and our sophisticated investors already have significant holdings in those emerging companies. The risk is decreased as Gleneagle may also seek to appoint a representative of the Fund to the company’s board, providing further opportunity to apply strategic influence, pivot business strategy and facilitate growth. |
Track Record
Entry | 90c |
|---|---|
Exit | $3.60 |
+300%
Zip Co is a leading player in the global 'buy now pay later' financial technology industry.
Entry | 20c |
|---|---|
Exit | $3.00 |
+1400%
Independence Group acquired Sirius Resources for $4.38 per share / 1.8b.
Entry | 60c |
|---|---|
Exit | $5.00 |
+733%
HUB24 is a technology, data, and platform provider to the wealth management industry.
Entry | 45c |
|---|---|
Exit | $7.20 |
+1500%
Chalice Mining is an exploration and production company, focusing on nickel, copper, cobalt, and gold.
Entry | $2.00 |
|---|---|
Exit | $56.00 |
+2700%
Gleneagle backed this financial technology company in its very early stages.
Entry | 30c |
|---|---|
Exit | 75c |
+150%
Gleneagle backed Nickel Mines' good management, which returned significant growth.
The above percentages reflect the approximate realised gains which the Fund Manager and its Beneficial Owners have had with investments in emerging companies in the past. Investment in emerging companies carries inherent risk and not all investments by the Fund Manager have resulted in gains. The above companies are not included in The Emerging Companies Fund. All returns represent past performance only. Past performance is not a reliable indicator of future performance.
