Will invest in a portfolio of boutique private equity funds in the US - The Trust was oversubscribed, raising $188m through the issue of units at $1.60 per unit. Unlike the other three trusts in the series, the Trust will be unlisted and will have a partly paid unit structure whereby the application price of $1.60 is paid in instalments.

The Fund was launched in June 2013 and, over its now almost five year track record has generated alpha and superior risk-adjusted although relative returns have varied materially over different time periods. The Fund is managed by a small, but capable investment team. The long portfolio consists of a concentrated 20-40 ASX listed holdings of large to small cap stocks.

Stand out performances from the active managers in the quarter came from microcap vehicles managed by OC Funds Management, Wilson Asset Management and Acorn Capital. With Acorn’s LIC The Acorn Capital Investment Fund (ACQ:ASX) taking the blue ribbon registering a return of 19.4% for the quarter.

Prior to 2016 the Manager had a solid track-record of generating alpha. However, 2016 was a poor year for the Fund, materially under-performing the benchmark.

The Fund’s level of historic beta and correlation to the index has been surprisingly high but, by the Manager’s own statement, we expect the high conviction nature of the portfolio to only increase over time and performance to be largely driven at the stock level. The approach to risk is capital preservation, rather than a concern over shorter term price volatility.