Wilson calls operational crisis at Hunter Hall
Wilson Asset Management (WAM) chairman, Geoff Wilson has ramped up the rhetoric around his calls to replace the board of the Hunter Hall Global Value Fund (HHV), accusing the existing board of self-interest and claiming what was a corporate governance crisis has deepened into an operational crisis.
At the same time he has pointed to the WH Soul Pattinson subsidiary, Pengana, as having underperformed its benchmark since inception.
In a letter to shareholders in the fund, Wilson has urged shareholders to vote for what he describes as an “independent, competent and ethical board” at a general meeting called by WAM.
“As owners of listed companies, boards should treat shareholders with the utmost respect. When Peter Hall announced his shock decision to leave behind the companies he asked shareholders to support, the Hunter Hall Global Value Fund board should have immediately allowed shareholders to choose between leaving at fair value, or remaining invested in the company,” Wilson’s letter said.
“We believe HHV shareholders must be given the opportunity to elect an absolutely independent board that is unburdened by conflicts and focused on creating a better future for the company and holding the investment manager to account,” he wrote.
“The corporate governance crisis caused by Mr Hall’s exit has deepened into an operational crisis,” the letter said.
“Mr Hall was responsible for managing 50 per cent of the HHV portfolio before his departure was announced. We understand the broader investment team members that managed over 85 per cent of the HHV portfolio have either left or will be made redundant. The expected investment manager, Pengana, has underperformed its benchmark since inception and over a one-month, six-month and one-year period.”
Wilson said that contrary to the assertions of the HHV board the costs related to the liquidation of the investment portfolio would be negligible.
He claimed that HHV had sold equivalent to 64 per cent of its equity portfolio in the six months to 31 December 2016, and that liquidity analysis showed HHV could liquidate 90 per cent of its top 10 holdings within seven days based on the 30-day average daily volume as at 8 March 2017.
“We are fighting for a new board because it is the desired outcome for ourselves and for many retail HHV shareholders who, in our view, have been ignored by the current board. We have been overwhelmed by the support we have received from HHV shareholders, investors, fund managers, stockbrokers and financial advisors,” Wilson’s letter said.
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