BKI Investment Co., the fund management company run by the family that founded Washington H. Soul Pattinson & Co, plans to raise an additional $48 million next month as it seeks to grow funds under management, improve liquidity in the stock and take advantage of benign capital raising conditions.
BKI hopes to raise $48 million by October 16 from existing shareholders by offering stock at $1.48 a share, a seven per cent discount to the fund’s net tangible assets, or the same price it offered shares to investors in a successful $59 million share sale earlier this month.
“It’s a pretty good time to be raising money,” says Tom Millner, chief executive of BKI. Pitt Capital Partners, the boutique investment bank in which Millner’s family has a stake, is advising BKI on the sale being managed by stock brokers Baillieu Holst.
The two share sales will bring assets under management to about $800 million from about $710 million at present, according to Millner. The fund’s total shareholder return has been 10.6 per cent per annum in the last nine years, compared with 8.7 per cent for the S&P/ASX300 ACC Index. Management expenses this year are 0.19 per cent of assets under management.
BKI’s ordinary dividend income rose 7.4 per cent to $32 million in the 12 months to June 30, from a year earlier. Total dividends per share were 7.15 cents, a 12 per cent increase.
As of August, 10.3 per cent of BKI’s portfolio was in Commonwealth Bank of Australia shares, 9.8 per cent in National Australia Bank Ltd, 8.8 per cent in energy company New Hope Corp. and 7.6 per cent in Westpac Banking Corp.