Investment Offer

New investment opportunities are regularly made available to our clients across all asset classes and industry sectors through company IPOs and capital raisings.

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Whitefield Income Limited

Whitefield Income Limited Offer

Morgans is a Joint Arranger and Joint Lead Manager to the Offer¹
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Whitefield Income Limited (“Whitefield Income” or “Company” or “WHI”) has announced the launch of a new ASX listed investment company (“LIC”)² to raise up to $250 million³. Whitefield Income will be actively managed by Whitefield Capital Management (“Manager”) with the objective of providing investors with:
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Income inclusive of franking credits through a diversified equity portfolio focused on investments in ASX 300 listed securities over their income recognition and dividend payment periods,
Gross monthly franked income of approximately 8% p.a. (base dividend) plus periodic special dividends where available⁴, and
Total returns including franking credits (consisting of gross income and fluctuations in capital values net of expenses) that are similar to or exceed the gross return of the Benchmark⁵ over rolling 3-year periods.

The Offer includes a Broker Firm Offer to clients of Morgans. Please contact your Morgans Adviser to discuss the suitability of the Company given your specific investment objectives, current portfolio holdings and if appropriate secure an allocation.

Whitefield Capital Management

Whitefield Capital Management as the Manager operates a range of wholesale and institutional investment portfolios and retail funds, including Whitefield Industrials Ltd (ASX: WHF) which is the longest running LIC on ASX.
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Experience
Approximately $1 billion funds under management. Over 100 years of operation of WHF and Whitefield’s insurance and private wholesale funds.

Reliability
Successfully navigated many changing economic climates. WFH has not cut dividends since imputation introduced over 30 years ago.

Innovation
Proprietary quantitative investment framework and systematic approach provides accuracy and efficiency. The framework calculates relevant metrics, rankings and ratings across multiple dimensions in accordance with the Investment Strategy objectives.

Integrity
Large co-investment in funds. Three CEOs in over 100 years. Average tenure of investment personnel in excess of 20 years; no departures since 2008.

Investment Portfolio Strategy

The Company will focus on systematically investing in ASX listed entities over their income recognition and dividend payment periods and will actively change its investment holdings across a year to achieve a balance between portfolio income, total return and the control of risk. The Manager expects to hold approximately 70-100 equity securities of which 90% or more must be selected from the S&P/ASX 300 Universe.

The strategy seeks to benefit from:

The systematic mispricing of listed equity securities over their income recognition and dividend payment periods;
An orientation of the portfolio towards profitable, cash flow generative and dividend paying companies; and
The potential for growth in the underlying earnings and value of Australian shares across each year.

Strategy Performance

Whitefield Income has operated the Investment Strategy in an unlisted fund (Unlisted Fund) for ~4 years. The performance of the Unlisted Fund and the benchmark is shown in the table below. The listed past returns inclusive of franking credits have been calculated after the actual costs of investment and after all expected costs of operation of Whitefield Income, including the Management Fee, Performance Fee and other direct costs of operation.

No assurance can be given that any investment will achieve its objectives or avoid losses. Past performance may not be a reliable indicator of future performance. The Benchmark and the Unlisted Fund returns assume all dividends and returns are reinvested.

Whitefield Income Overview

Key highlights of investing in the Fund include:

Monthly Franked Dividends
Income harvesting strategy providing investors with monthly franked dividends of approximately 8% p.a. gross (base dividend) which equates to 5.6% net of franking plus periodic special dividends where available⁴. The Company will seek to pay its first dividend to investors in the first month after the completion of its first full calendar quarter of operation and monthly thereafter.

Diversified, differentiated offering
Manager expects to hold 70 – 100 securities focused on the S&P/ASX 300 Universe with an average size of security holdings to be approximately 1.5% of the value of the portfolio. Differentiated by exposure to diverse, non market-capitalised weighted positions, targets both franked and unfranked dividends and difficult to replicate at institutional scale.

Systematic Return Generation
Strategy involves investing over the strongest period of companies’ income recognition and dividend payment cycles. Optimally timed holding periods around high quality dividend-paying companies’ ex-dividend dates enhances portfolio gross income and gross excess return. Driven by underlying company earnings and structural mispricing, using a consistently applied quantitative framework.

Whitefield’s quantitative process
Detailed stock models generate a comprehensive fundamental view of over 400 companies in the Australian share market. Over 1,000 custom metrics are used with over 2 billion individual calculations performed each week. Proprietary portfolio construction algorithm selects the best opportunities to generate portfolio income and total return, combining dividend modelling with stock fundamentals.

Access to one of the most experienced investment teams on ASX with a proven track record
The investment process will be managed by the same investment team that manages Whitefield Industrials (ASX: WHF). The Investment Committee, consisting of senior executive investment personnel, provide input at each level in the process.

Manager alignment
Angus Gluskie (Chairman and Managing Director), senior members of the investment team and the Directors intend to participate in the Offer.

Key Features of the Offer

Ability to secure a Broker Firm allocation in Whitefield Income Limited.
A “day 1” Subscription Price set at a NAV per share of $1.25 with the IPO Offer costs paid by the Manager.
The potential to earn dividend income from a diversified portfolio of listed equity securities focused on profitable, cash flow generative and dividend paying companies within the S&P/ASX 300 Universe.
Income harvesting strategy providing investors with monthly franked dividends of approximately 8% p.a. gross (base dividend) which equates to 5.6% net of franking plus periodic special dividends where available⁴.
Access to an actively managed portfolio investing over the strongest period of companies’ income recognition and dividend payment cycles. The Company will actively change its investment holdings across a year to achieve a balance between portfolio income, total return and the control of risk.
Access to highly experienced investment manager with a strong track record managing a range of wholesale and institutional investment portfolios and funds, including listed investment company Whitefield Industrials (ASX: WHF).
Fee and total costs with incentives for performance that aligns with the interests of investors.
ASX listed liquidity expected to be quoted on ASX under the code WHI².

Issuer: Whitefield Income Ltd
Transaction: Listed Investment Company Offer
Morgans Role:  Joint Arranger and Joint Lead Manager
Offer Size: $250 million
Offer Launch Date: 29 October 2024
Expected Morgans Broker Firm Close Date: 19 November 2024

The objective of paying regular dividends is not intended to be a forecast, it is merely an objective of the Company. The Company may not be successful in meeting this objective. The payment of dividends is subject to the Company having sufficient profits, reserves and franking credits available, provided the Company considers it is commercially prudent to do so and subject to any retention of profits or reserves for corporate purposes or for the smoothing of distributions. Accordingly, investors should recognise that in some circumstances (particularly those when dividends from Australian shares fall rapidly, materially or for an extended period) the Company may reduce, temporarily cease or adjust the franking of dividend payments.

Past performance of any investment product (including WHF and the Unlisted Fund) may not be repeated and is not a reliable indicator of the future returns of the Company. The Company may not be successful in generating returns for investors, and may suffer losses.

The investment strategy may be impacted by various factors outside the control of the Company and is subject to the risks set out in Section 5 of the Prospectus. Prior to investing, you should consider the risks involved and whether they are appropriate for your objectives and financial circumstances.

Cooling-off rights do not apply to an investment in shares pursuant to the Offer. This means that, in most circumstances, you cannot withdraw your Application once it has been accepted.

Design and Distribution Obligations (DDO)

The Corporations Act imposes obligations on the Issuer to determine an appropriate Target Market for the Offer. Morgans as the distributor must take steps which result in the Offer being distributed only to investors that are within the Target Market.

Footnotes

Morgans will receive fees for its role.
Application will be made to list Whitefield Income Limited on ASX.
With the ability to accept oversubscriptions. The Offer may proceed with a lower amount, subject to the Minimum Subscription.
This is an objective not a forecast. By their nature dividends are paid at the company's discretion, are not guaranteed, may vary over time and in some circumstances may not be paid.
S&P/ASX 300 Equal Weighted Franking Credit Adjusted Daily Tax-Exempt Total Return Index (Benchmark) over rolling 3 year periods.
The WHI Strategy has been tested in practice since January 2021 through an unlisted fund with approximately $10m of invested funds; All performance figures are to 30th September 2024. All performance figures are inclusive of franking credits unless stated otherwise.
All performance figures for periods greater than one year are shown as annualised.
Portfolio Return is after the actual costs of investment and after all expected costs of operation of Whitefield Income Ltd, including the management fee, performance fee and other direct costs of operation. Calculations assume all dividends are reinvested. The listed past returns are based on unaudited figures.
Benchmark Return does not include any transaction costs, management expenses or taxes. The benchmark of the fund and WHI is the S&P/ASX300 Equal Weight Franking Credit Adjusted Daily Total Return Index (Tax Exempt). Calculations assume all dividends are reinvested.

More information

Investors should read the Prospectus in full to understand the features and risks of the Offer. Please contact your Morgans adviser to apply under the Offer.

If you have any questions about the Offer, please contact your Morgans adviser, call 134 226 or find your nearest office.

Download Prospectus

The Offer is being offered only in Australia and the Prospectus will only constitute an offer to a person receiving it in Australia. Not for distribution, directly or indirectly, in the United States or to, or for the account or benefit of, US Persons, except in accordance with an available exemption from the registration requirements of the US Securities Act. The distribution of the Prospectus (including an electronic copy) in jurisdictions outside Australia may be restricted by law.