Investors To Access The Best Of British
The Age
Thursday February 28, 2008
AUSTRALIAN investors and superannuation funds will soon have a chance to invest in British growth companies that outperform one of the world's pre-eminent markets.
Inteq, the investment bank subsidiary of British-based niche banking firm Blue Oar, is now approaching Australian super funds and institutions to put money into a special index of British companies that regularly outperforms the FTSE100 and FTSE250.The Blue Oar Unique Index Fund, which will start in June, will focus on 35 to 40 companies that have carved out markets in areas where there is no real competition and where they can set their own rules. The companies are usually less well researched because they are only followed by a handful of analysts and have attracted interest from only a few of the largest institutions.There is another reason why many of these companies might be attractive to investors. Because they are unique in their fields, they get more takeover approaches, and larger companies have to pay a massive takeover price to gain access to a particular product or service. A takeover premium also ensures they trade at a high valuation.Companies in the index include Unite Group, the sole provider of university accommodation and related services; Greggs, the only listed company that makes its money from high street bakeries; Dignity, the only listed provider of funeral services; and Carpetright, the only listed carpet retailer.These companies are drawn from the FTSE250, which has outperformed the FTSE100 by 86% since January 2000.But Blue Oar says its Unique Index, which was created in 2004, has outperformed both the FTSE250 and FTSE100.The list also tends to change regularly as many of these companies are successful enough to enter the FTSE100, or be acquired by a bigger corporation seeking to enter that market.Blue Oar chief executive Andrew Monk said the index was a good fit for Australia's $1.6 trillion superannuation pool, which, as it started to eclipse the ASX in size, would look to invest overseas. Australian superannuation funds looking overseas are now generally restricted to generalist global funds. "You do have a very successful super fund situation and we couldn't see any pure UK product that people in the Australian market could access," Mr Monk said.He said the aim was to build the fund to #500 million ($A1.06 billion) over the next three to five years.The market capitalisation of the Blue Oar Unique Index is now #30 billion.Inteq, the only fully integrated group that specialises in medium to small companies - which also has a British parent and therefore close links to the London Stock Exchange and Alternative Investment Market - is also finalising a joint venture with an institution LINK? www.inteq.com.au
© 2008 The Age