Colville offer launched

Monday 10th May 2004

The public offer of up to $75 million of ordinary shares by investment company Colville Equities (�Colville�) is designed to give New Zealand investors a combination of low fees, high transparency and the benefit of a highly experienced investment team.

The offer, of $1 per share, opens on Monday 17 May and closes on Friday 11 June. For every two shares allotted investors will receive one transferable option exercisable on 31 March 2006 upon payment of $1 per option. The Manager of the Colville portfolio is Milford Asset Management Limited.

Colville Chairman James Ogden says the offer is designed to meet a clear need in the market among �heartland investors�.

�More and more Kiwi investors are looking for investment opportunities with low costs and transparency, backed by experienced investment management.�

The public can apply for shares from a public pool of at least $25 million.

Ogden says Colville�s objective is to outperform the NZSX All Gross Index by at least 3 percent per annum over time. Minimising costs will be a key aspect of this � the portfolio manager will receive an annual management fee of 1 percent and there will be no additional performance-related fees.

�The incentive for the investment manager is to expand the value of the portfolio,� Ogden said.

Colville Director and investment analyst Brian Gaynor says another strength of the offer is a focus on governance and transparency.

�Colville has a majority of independent directors and will have a high degree of disclosure around the performance of the portfolio�s performance,� Gaynor said.

The management agreement with Milford is for three years, after which time the manager may be changed on a resolution of directors or shareholders without the payment of a termination fee.

Strong corporate governance will also be a feature of the companies in which Colville Equities invests. Colville plans to invest in between 10 and 25 companies at any one time, with no more than 15 percent in any one NZSX or NZAX entity (unless that entity has a greater index weighting).

Aggregate investment in Australian S&P/ASX 200 companies is limited to a maximum of 15 percent of the portfolio, by value, and 20 percent in New Zealand unlisted companies. The Australian companies must have New Zealand operations and the unlisted companies will each have plans to list within 24 months of the investment being made.

Milford Asset Management�s investment team has extensive experience � Graeme Thomas, Alan Moore and Brian Gaynor have each had many years in the investment management and analysis industry.

If you would like more information on this issue send an email to offers@sharechat.co.nz

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