NextGen Resources Fund
Overview
A diverse portfolio of small and emerging companies that focuses on commodities being positively impacted by global disruptions, such as the clean-energy transition. The Fund is managed by ex-geologists with the technical and financial skills that are essential for investing in this universe.
Overview
A diversified portfolio of Resources & Energy companies:
Acorn Capital (Acorn) will construct a portfolio of companies that are exposed to growth commodities in the Resources & Energy sectors. These companies will also cover the full range of development stages (i.e., explorers to producers) and include both listed and unlisted (e.g., pre-IPO) opportunities.
Overview
Investment management by Australia’s most experienced fund manager of microcap and emerging-growth companies in the Resources & Energy sectors:
Overview
Strong fee alignment and capacity management:
A performance fee will only be paid if the Fund’s returns are above both the benchmark and 0%. In addition, Acorn will hard close the Fund at $100m, thereby preserving and optimizing return potential for existing investors.
The state of play
Unit Pricing.
1.3276
Unit Price (Entry)
October 31 2023
1.3223
Unit Price (Exit)
October 31 2023
Nextgen
Why invest in the resources & energy sectors now?
The global shift to low-carbon economies is reshaping the demand for the commodities used in energy storage, energy generation and the production of electric vehicles. Also, as the world emerges from COVID-19 lockdowns, major stimulus programs and ballooning government debt are impacting the price of commodities such as gold and silver. At Acorn, we believe the confluence of these factors, together with China’s transition from urban growth to urban consolidation, are creating the ideal conditions for a new Resources Supercycle.
NEXTGEN
Why the NextGen resources fund?
We believe the next Resources Supercycle will generate strong demand for commodities such as nickel, lithium, copper and rare earth elements, as well as gold and silver. For the experienced investor, microcap companies can provide attractive direct exposure to these commodities. However, to navigate the large and diverse universe of complex (and often poorly understood) geological systems that contain these metals requires deep financial and technical skills. The NextGen Resources Fund is supported by Acorn investment capability with these skills, which have been built over 20 years.
NEXTGEN
Investment Objectives
The fund aims to:
- Provide a diversified portfolio of micro-, small- and mid-cap companies that are exposed to growth commodities in the Resources & Energy sectors
- Outperform the S&P/ASX Small Resources Accumulation Index (the benchmark) over rolling 3-year periods
Investment Strategy
Suitable Investors
- Capital growth through a diversified exposure to the Resources & Energy sectors
- An active investment approach
- A long term 5+ year investment
*As defined by the Corporations Act
Key Fund Terms
Type
Unregistered Unit Trust.
Objectives
Exceed the returns of the benchmark over rolling 3 years periods.
Benchmark
S&P/ASX Small Resources Accumulation Index (XSRAI)
Asset Allocation
Australian Equities1,2,3 Up to 100%, Global Equities 0-10%, Unlisted investments4 0-15%, Cash 0-20%.
Stocks #
25-40.
Liquidity
Daily.
Investment timeframe
5+ years.
Distributions
Annually.
Capacity
$75m (soft), $100m (hard).
Minimum Investment
$50,000
Management fee
1.10%5
Performance fee
20% of returns in excess of the benchmark6,7,8,9
Market capitalisation
Must be ex-ASX100 at time of purchase
Stage of development
Seed/startup 0-10%, Early 20-60%, Expansion 40-70%, Mature 10-20%.
Borrowing
The fund is permitted to borrow up to 5% of NAV to apply to redemptions. Borrowings may not be used to leverage or gear the fund.
Shorting
The fund is long only. The fund is not permitted to short sell securities.
Trustee
Evolution Trustees Limited.
APIR Code
ACQ3509AU.
Platforms
Hub24, Netwealth, Ausmaq.
1. Outside the ASX100 at the time of purchase.
2. No further purchases can be made in any company that exceeds 10% of the Fund’s net assets.
3. Global equities will only be included where gaps occur in the Australian market (e.g., quality silver producers & explorers). Focus will be on TSX-listed stocks.
4. Positions will only be taken in Australian unlisted companies where a liquidity event (e.g., IPO or trade sale) is likely within 6-12 months.
5. Unlisted securities may include equity and convertible notes.
6. Exclusive of expense recoveries of 15bp (excludes deal related legal fees and deal transaction costs).
7. Subject to prior High Water Mark (HWM) being exceeded (no HWM resets allowed).
8. Subject to the Fund’s return also exceeding 0%.
9. Calculated after management costs and expense recoverables have been deducted.
The rating issued 09/2023 is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2022 Lonsec. All rights reserved.
Related Documents
Latest Commentary
Fund Factsheet
Fund Information Memorandum
Application Form
Additional Investment Form
Get in touch today.
For further information
IMPORTANT NOTICE
This report is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security by the sender or Acorn Capital ABN 51 082 694 531 (AFSL 227605). This report does not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision. Any person considering investment in the Acorn Capital NextGen Resources Fund (“the Fund”) should first review the Investment Memorandum for the Fund dated 20 March 2020 and any other material published by Acorn Capital. This information is available at www.acorncapital.com.au. Evolution Trustees and Acorn Capital does not guarantee repayment of capital or any particular rate of return from the Fund. Past performance is no guarantee of future performance. Investment returns have been calculated in accordance with normal industry practice utilising movements in unit price and assuming reinvestment of all distribution of income and realised profits. Statements of fact in this report have been obtained from and are based upon sources that Acorn Capital believes to be reliable, but Acorn Capital does not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions and estimates included in this report constitute Acorn Capital’s judgement as at the date of this communication and are subject to change without notice.
