- Dated 01/03/19 – Fee and Expenses Update
Aurora Funds Management Limited (ACN 092 626 885) (“Aurora”), in its capacity as the responsible entity of the Aurora Global Income Trust (“AIB” or “Fund”), provides the following update in relation to AIB’s management fees, performance fees and other operating costs.
Waiving of Management Fees and Capped Normal Operating Expenses
The Fund currently pays 1.3325% per annum in management fees and 20.50% in performance fees (including GST) above its watermark. The Fund also meets the various normal operating expenses, including ASX listing fees, registry fees, accounting, audit and compliance fees, in accordance with its Constitution. These normal operating expenses, which are fixed in nature, have increased relative to the Fund’s net assets following the write-down of the Fund’s investment in Molopo Energy Limited.
From 1 March 2019, in response to the smaller net asset position of the Fund, Aurora has elected not to charge its management fees and will also cap normal operating expenses at no more than 2.00% (ex GST) of the Fund’s net assets (per annum). Normal operating costs incurred by the Fund above this cap will therefore be borne by Aurora in its own capacity until further notice. Aurora notes that any extraordinary costs will still remain an expense of the Fund.
Resetting Watermark and Performance Fee Change
Aurora hereby provides 30-day notice that it will be resetting the Fund’s performance fee hurdle in accordance with Fund’s Constitution, to the Net Asset Value (NAV) as at 30 June 2018 plus the accrued hurdle. This amounts to a benchmark of $0.258 per unit at the effective date (1 April 2019), a premium of 67% to the Fund’s current NAV of $0.155. Aurora is also increasing the performance fee from 20.5% to 25% (including GST).
In effect, this means that Aurora will cover the Fund’s excess operating costs over 2.00% (excluding GST) and waive its base management fee for the benefit of the Fund, and will only earn a fee when the value of the fund grows by in excess of 67%.
- Dated 14/08/18 – Valuation of Molopo Energy Limited & Off-market Redemptions Update
Aurora Funds Management Limited (“Aurora”) provides an update in respect to the Aurora Fortitude Absolute Return Fund (“AFARF”), which directly impacts the Aurora Global Income Trust Fund. Attached is a copy of the relevant announcement by AFARF.
In light of the announcement by AFARF, including the write down of its investment in Molopo Energy Limited to 3.6 cents as at 30 June 2018, all investors that had previously lodged Redemption Requests will now have the option of withdrawing their Requests until 31 August 2018.
Read more here.
- Dated 29/06/18 – Molopo Energy update and Fund Redemptions
Aurora Funds Management Limited (Aurora), in its capacity as responsible entity for the Aurora Global Income Trust Fund (Fund), provides unitholders with an update in relation to the Fund’s investment in Molopo Energy Limited (MPO).
Molopo Energy Limited’s unacceptable circumstances and breach of ASX Listing Rules
In response to an application made by Aurora to the Takeovers Panel (Panel), the Panel made a declaration of unacceptable circumstances1 against MPO following a series of transactions it announced on 8 May 20182. These transactions were determined to be frustrating actions in relation to AFARF’s takeover bid and Molopo’s Target Statements were deemed to contain omissions and misleading and deceptive information. This follows a finding by the ASX on 11 May 20183 that stated MPO had breached ASX Listing Rules and may have also breached various sections of the Corporations Act for making misleading disclosures to the ASX.
Impact on MPO value, Fund NAV and AFARF’s current takeover offer
Aurora has formed the view that if these transactions are not capable of being unwound, with the cash value returned to MPO, the value of this investment, which represents 55% of the Fund’s Net Asset Value (NAV), will need to be written down. It follows that any such write-down would have a material effect on the Fund’s NAV. Aurora will await the outcome of the Panel orders prior to determining whether to write down the value of its MPO investment and whether to exercise its right to withdraw AFARF’s current takeover offer.
Impact on Redemptions
Aurora considers it prudent to delay redemptions until such time that it receives final orders from the Panel and subsequently forms a considered view on the appropriate carrying value of the Fund’s investment in MPO.
- Dated 01/06/18 – Distribution Update
Aurora Funds Management Limited (ACN 092 626 885) (“Aurora”), in its capacity as the responsible entity of the Aurora Global Income Trust (“AIB”), provides the following update in relation to AIB’s Distribution Policy.
AIB currently pays a quarterly distribution to unitholders of 2% of Net Asset Value (NAV), or, 8% per annum. Effective 30 June 2018, the quarterly distribution rate for the Fund will be adjusted to the greater of 0.5% of NAV (2% per annum) or distributable taxable income.
- Dated 08/12/2017 – Investment Strategy Update
Aurora Funds Management Limited (ACN 092 626 885) (“Aurora”), in its capacity as the responsible entity of the Aurora Global Income Trust (“AIB” or “Fund”), provides the following update in relation to its earlier announcement made on 28 September 2016, via the fund update section on Aurora’s website, regarding and Enhancement to Investment Strategy.
On 28 September 2016, Aurora notified AIB unitholders of its intention to change the Funds investment strategy, specifically by changing the single position limit restrictions from “no long position can exceed 12% of the NAV on a cost basis” to “no long position can exceed 80% of the NAV on a cost basis”. Aurora previously advised that it would re-evaluate this change in investment strategy once the takeover for the HHY Fund had been completed. As such, Aurora hereby advises that previously announced change in investment strategy will remain in effect and form part of AIB’s ongoing investment strategy.
- Dated 26/04/17 – Appointment of Chief Operating Officer
Aurora Funds Management Limited is pleased to announce it has expanded its management team with the appointment of Mr Ben Norman to the role of Chief Operating Officer, effective 26 April 2017.
Ben is a qualified Chartered Accountant, with over 16 years of professional and industry experience. Prior to joining Aurora, Ben was a Director in Ernst & Young’s Transaction Advisory Services division, where he spent over 9 years working on numerous due diligence, performance improvement, restructuring, turnaround, financial modelling and transaction integration engagements with clients in all industry sectors. While working with Ernst & Young, Ben also performed extended secondments with global financier GE Capital in a senior risk and compliance role and with ASX listed Origin Energy Limited as a finance manager in Origin’s upstream business.
Prior to joining Ernst & Young, Ben held a senior finance position with gas transmission business Epic Energy (which was owned by the ASX listed Hastings Diversified Utilities Fund, backed by Westpac Banking Corporation) where he was responsible for overall financial control and compliance.
Managing Director, John Patton, commented, “we are delighted to have secured the services of a very senior and experienced industry professional to Aurora’s management team. Ben Norman’s extensive professional and industry experience will be a valuable addition to Aurora’s capabilities”.
In light of the changes that have taken place within the business, Aurora has decided to update and refresh its Product Disclosure Statement (PDS). Pending this review being finalized, Aurora has withdrawn its PDS for new retail applications, however all existing terms will continue to apply save as varied in accordance with the terms of the PDS. Upon the lodgment of an updated PDS, the fund will then accept applications from new retail investors.
- Dated 18/04/17 – Takeovers Panel – MPO
Further to the announcement made by Aurora Funds Management Limited (“Aurora”) on 12 April 2017 in relation to applications made by the Australian Securities and Investments Commission (“ASIC”) and Molopo Energy Limited (“Molopo”) to the Takeovers Panel seeking declarations of unacceptable circumstances in relation to Aurora’s acquisitions of shares in Molopo on the basis of an alleged ‘association’ with Keybridge Capital Limited, Aurora notes that:
1. the members of the Panel who will consider the applications have been appointed;
2. the Panel has not yet decided whether to conduct proceedings on either application; and
3. if proceedings are conducted, one of the orders sought by ASIC is that approximately 39.5 million Molopo shares held by Aurora be sold within a period of 3 months (with the net proceeds of sale being paid to Aurora). If such an order were to be made, the effect that the sale of such a large number of shares in a relatively short timeframe would have on the trading price of Molopo shares is unknown (and could be adverse, having regard to the illiquid nature of trading in Molopo shares).
Aurora also notes that in the separate application made by Molopo, a divestment order is also sought on the basis that Aurora not receive any profit on the sale of the shares.
The Molopo shares owned by Aurora on behalf of Aurora Fortitude Absolute Return Fund and Aurora Global Income Trust currently represent approximately 30.4% and 39.5% respectively of the value of the assets of those funds.
As stated in its announcement on 12 April 2017, Aurora intends to vigorously oppose the applications.
- Dated 08/02/17 – Update in relation to the Investment Strategy
Aurora Funds Management Limited (“Aurora”) provides the following update in relation to the investment strategy for the Aurora Global Income Trust.
- Historically, Aurora has typically targeted a large number of positions in highly liquid investments. Whilst this still forms the basis of the investment strategy, Aurora is also prepared to take more concentrated and/or substantial positions where there is an opportunity to take an active role in creating a catalyst to unlock underlying value. Aurora believes the pursuit of these opportunities will enable the Trust to generate higher investment returns over the longer term whilst potentially increasing volatility.
- The current Product Disclosure Statement (“PDS”) contemplates 90% of the Trust’s assets being able to be liquidated within 10 business days. The Trust will revert to the liquidity requirements contained in its Constitution, which is consistent with the Corporations Act.
- All investments continue to be managed within the Investment Mandate as outlined in the current Product Disclosure Statement’s and Trust Updates.
- Dated 06/12/2016 – Voting Results of the Unitholder Meeting
In accordance with Listing Rule 3.13.2 and section 251AA of the Corporations Act 2001 (Cth), we advise that details of the resolutions and proxies received in respect of each resolution put to the General Meeting of the Aurora Global Income Trust, are set out in the attached proxy summary.
Resolution 1 – Removal of Responsible Entity was not carried.
Resolution 2 – Appointment of New Responsible Entity was not carried.
Aurora welcomes the outcome of the meeting, and now that this distraction is behind us, our capable and experienced team look forward to implementing the investment objectives of AIB for the benefit of all unitholders. Accordingly, Aurora will continue to act as the responsible entity of AIB and seek to accomplish the investment objectives and strategy of AIB.
- Dated 06/10/2016 – Amendment to reflect provisions in the AIB Constitution
Effective 7 November 2016, Aurora Funds Management Limited gives notice that the liquidity requirements of Aurora Global Income Trust (AIB) will be amended to reflect the provisions in the AIB Constitution, which is consistent with the Corporations Act.
- Dated 28/09/2016 – Enhancement to Investment Strategy
Effective 28 October 2016, Aurora is pleased to notify Aurora Global Income Trust (AIB) investors of our intention to enhance the investment opportunities of the Trust by amending the following limitation under its investment strategy, being “no long position can exceed 12% of the NAV on a cost basis” to “no long position can exceed 80% of the NAV on a cost basis”. Aurora considers that this amendment is appropriate to facilitate the takeover of HHY Fund and will be re-evaluated once the takeover is completed. Aurora does not consider that this will significantly alter the risk profile of the Fund, and will provide an updated Product Disclosure Statement in due course with further background.
- Dated 31/08/2016 – Resumption of Off-market Redemptions
Aurora Funds Management Limited (“Aurora”) provides the following update in respect of the Aurora Global Income Trust (“the Trust”).
Antares Convertible Note Update.
As at 30 June 2016, the Trust held investments in Antares Energy Limited Convertible Notes (ASX: AZZG), which had been suspended from trading on the Australian Stock Exchange on 15 September 2015 and remain suspended as at the date of this update.
In February 2016, Aurora made the decision to freeze applications and redemptions in the Trust, on the basis that it could not accurately determine a value for the AZZG Notes.
For the purposes of the June 2016 year-end financial statements, and after careful consideration of all of the available information, Aurora has formed the view that the AZZG Notes should be recognised at a nil value. In forming this view, Aurora has relied on the following information:
On 8 April 2016, Antares Energy Limited (“Antares”) issued a notice of resumed meeting of noteholders (to be held on 29 April 2016) to, amongst other things, extend the reset date of the AZZG Notes to 31 March 2017 and amend the next interest payment date to 30 April 2017. This meeting did not proceed.
On 29 April 2016, Antares appointed Bryan Kevin Hughes and Daniel Johannes Bredenkamp of Pitcher Partners as Joint and Several Administrators.
On 10 May 2016, following a resolution passed at the first meeting of creditors, Quentin James Olde and Michael Joseph Ryan of FTI Consulting replaced Bryan Kevin Hughes and Daniel Johannes Bredenkamp of Pitcher Partners as Joint and Several Administrators of Antares.
As part of the 30 June 2016 year end audit procedures, Aurora engaged an external independent valuer in the US, South Texas Reservoir Alliance LLC (STXRA), to perform an independent valuation of the underlying assets of Antares, being Northern Star and Big Star (STXRA conducted a similar valuation for the purposes of Aurora’s 31 December 2015 financial statements). In summarising the STXRA valuation, the following observations are relevant:
o STXRA reviewed, in the course of its analysis, both recent market transactions and public land records to provide both a liquidation and transactional evaluation of the assets;
o The Administrator of Antares, FTI Consulting, made an ASX Announcement on 30 August 2016 calling for Expressions of Interest. In that Announcement, the Administrator advised that circa 5,000 acres of leased land had expired, leaving circa 15,900 acres;
o STXRA indicated that “there is a trend in the E&P industry right now to only focus on core acreage and this leasehold is not considered core in the Midland basin so the number of potential purchasers for this asset are pretty limited”;
o STXRA provided a valuation range of between USD$985,000 (representing 2X the lower end of the Liquidation value) to USD$12,312,500 (representing 5X the upper end of the Liquidation value) (being AUD$1,279,055 to AUD$15,988,183). The face value of the AZZG Notes is AUD$47.5 million;
o STXRA concluded that Antares, given its financial situation and inaction on its leases, would probably tend more towards lower end of liquidation pricing;
o STXRA also noted that “due to Antares lease position falling apart and the recent lower price per acre metrics, it appears that this asset will tend to the lower values”;
o The STXRA valuation range excludes any other liabilities and costs that need to be satisfied by the Administrator;
o The Trust holds circa 1.0% of the AZZG Notes, thereby bringing the valuation range (before other liabilities and Administration costs) to circa AUD$12.5K to AUD$156.7K;
o Antares has been trying to sell the asset for a number of years, with no sale forthcoming; and
o The external valuation is based on the value of the acreage, so any costs of administration would need to be paid first.
In addition to the STXRA valuation, Aurora management had regard to confidential information and reports provided by the Administrators.
The fair value of the AZZG Notes is based on significant estimates and judgements adopted by management of Aurora based on the prevailing market conditions and all available information about Antares as at the date of the 30 June 2016 financial report.
Aurora management considered the range of possible values and determined that the fair value of the AZZG Notes held by the Trust should be nil as at 30 June 2016.
As part of the year-end audit procedures, the external auditors (Deloitte) reviewed the analysis prepared by Aurora management along with the associated reports and concurred with the position taken.
Resumption of off-market Redemptions
In light of the above write down of the Antares AZZG Notes to nil as at 30 June 2016, the Trust is now unfrozen and as such is able to resume the processing of off-market redemptions, effective 31 August 2016.
Read more here.
- Dated 19/08/2016 – Update of investment in Antares Energy Limited Convertible Notes
Aurora Funds Management Limited (“Aurora”) as responsible entity of the Aurora Global Income Trust (the “Fund”), provides the following update to investors.
As part of the annual preparation for financial reporting, Aurora advises that it expects to recognise a non-cash impairment charge against the carrying value of the Antares Energy Limited Convertible Notes (ASX Code: AZZG) (“Antares Notes”) held by the Fund as at 30 June 2016.
The impairment charge reflects information that has become available through the audit process and which leads Aurora to believe there is a possibility that the value of the Antares Notes is substantially less than the current carrying value of $1.82 per note.
The exact amount of the impairment charge is subject to finalisation of the Fund’s full year audited financial statements, which will be released on or around 31 August 2016.
We will continue to monitor the situation and provide additional information on any material changes in due course through ASX announcements.
- Dated 08/07/2016 – Operating Expenses
Effective 8 August 2016, Aurora Funds Management Limited may begin charging all of its normal operating expenses to the Trust in accordance with the Constitution.
- Dated 01/04/2016 – Antares Energy Limited Convertible Notes meeting postponed
Aurora Funds Management Limited (“Aurora”) as Responsible Entity of the Aurora Global Income Trust (“the Fund”) refers to its voluntary suspension from trading and recent announcements in relation to its investment in Antares Energy Limited Convertible Notes (“the Notes”).
The Noteholders meeting was held on 31 March 2016, however, the vote did not proceed and the Noteholders meeting has been postponed until 29 April 2016.
Aurora advises that its voluntary suspension is expected to remain in place for an additional period of up to one month or until further information becomes available to us.
We will continue to monitor the situation and provide any additional information on any material changes in due course through ASX announcements.
- AIB – Letter to Unit Holders
Suspension of applications and redemptions and suspension from trading on ASX From 25th February 2016, applications, redemptions and dividend reinvestments for the Aurora Global Income Trust (Fund) are temporarily suspended. This means you will not be able to apply for or redeem your units in the Fund until further notice.
The Fund is also suspended from trading on the ASX.
The Aurora Global Income Trust Fund holds Antares Energy Limited Convertible Notes (ASX Code: AZZG) (Antares Notes) which have been suspended from trading and are, consequently, currently illiquid. The note is due to be repaid on 31st March 2016, but information has become available to us which leads us to believe there is a possibility that repayment will not occur on this date, and therefore we are unable to accurately determine a value for the Antares Notes. This uncertainty means we do not believe it is the best interest of unit holders to continue to accept applications and
redemptions, and to allow on market trades whilst there is doubt about the liquidity of a position within the Fund’s portfolio. The Antares Notes currently comprise 9.58% of the net asset value of the Fund, but this percentage may change as the value of the Antares Notes, and the value of the Fund’s other assets change.
Acting in the best interests of Investors
Aurora has determined that, in these circumstances, it is in the best interest of investors in AIB, as a whole to temporarily suspend applications and redemptions and halt market trading to ensure all investors are treated equally so there is fair treatment between investors who choose to remain invested in the Fund and investors who choose to exit the Fund in the short to medium term.
What this means for you
The Fund has ceased accepting any off market applications for units or processing off market redemption requests effective from 25th February 2016. Any application funds received will be returned to you. A request for voluntary suspension to suspend ASX trading has also been lodged with the ASX. The temporary suspension does not affect the distributions paid by the Fund or the investment strategy of the Fund. As more information becomes available to us, we will be in better to position to advise when liquidity is likely to be restored.
If you currently have a Distribution Reinvestment Plan in place, your future distributions will only be paid via direct credit into your nominated account and cannot be reinvested in the Fund until further notice. You will need to provide your bank account details by contacting our security registrar, Registry Direct on 1300 55 6635. Alternatively, you can provide your banking details online at www.registrydirect.com.au/investor.
If you have any queries or concerns, please contact us.
Telephone: 02 9080 2377 or 1300 553 431 (within Australia) or 0800 447 637 (within New Zealand)
Post: PO Box R1695, Royal Exchange NSW 1225
- Dated 18/9/2015 – Annual Reporting and Fund Disclosure as at 30th June 2015 for the Master Fund.
Asset Allocation: 29% invested in equities & 71% invested in cash.
Liquidity Profile: 90% within 10 business and 10% within 3 months.
Maturity profile of the Fund’s liabilities:
Note 1 – The fund uses leverage through its Prime Broker facility with UBS AG. A maturity profile cannot be disclosed as the term of the borrowing is dependent upon portfolio construction (subject to the Prime Brokerage Agreement remaining in place.)
Derivative Counterparties: UBS AG.
Investment Returns: +6.36% for the 2014/15 financial year.
Key Service Providers: No change
- Dated 1/7/2015 – Distribution Update
From 1 July 2015, the quarterly distribution rate for the Aurora Global Income Trust will be adjusted to 2.0% of NAV (Net Asset Value) per quarter.
- Dated 1/6/2015 – Introduction of a Performance Fee
From 1 July 2015, a performance fee equal to 20.5% per annum (including GST) of the gross performance (net of fees) over the benchmark subject to a high water market will be introduced.
- Dated 20/5/2014 – Enhancement to Investment Strategy
Aurora is pleased to notify Aurora Global Income Trust (AIB) investors of our intention to enhance the investment strategy of AIB by adding additional investment strategies to the existing earnings announcement strategy.
The existing investment strategy is market neutral global equities. This will not change. The current earnings announcement strategy will continue to be a strategy of the Trust. The additional investment strategies will include Convergence, Convertibles, Mergers & Acquisitions and Long/Short.
The Aurora investment team has a proven ability in generating consistent market neutral returns using these strategies in domestic equities and believe that this expansion will allow the trust to better achieve its overall objective of consistent non-correlated returns.
An updated Product Disclosure Statement will be issued shortly.
- Dated 2/7/2012 – GST Update
On 29 May 2012, amendments to the GST financial services regulations were released, including wide ranging new regulations relating to the reduced input tax credit treatment of supplies acquired by managed investment schemes and superannuation funds. The new rules apply from 1 July 2012.
The amendment regulations introduce a new item 32 of GST regulation 70-5.02(2) under which supplies acquired by a ‘recognised trust scheme’ on or after 1 July 2012 will be eligible for a 55% reduced input tax credit (RITC). Certain specified services will remain eligible for the 75% RITC.