Firetrail Absolute Return Ltd 

Founded in the year 2018, Firetrail Absolute Return Ltd (Proposed ASX Code: FTA) is an investment management boutique, whichis majorly owned by its investment staff and the team has invested alongside their clients in the investment strategies. The group now intends to provide exposure to a true market neutral, absolute return fund to the investors.
 
Details of the Prospectus: On 11 September 2018, the company lodged its Prospectus with Australian Securities & Investments Commission (ASIC) to invite applications for 145 million Shares at an Application Price of $2.10 per Share. The offer was opened on 24 September 2018 and it is expected to close on 19 October 2018. The minimum number of shares available under the offer are 35 million and minimum proceeds from the offer are $73.5 million. The maximum number of Shares available under the Offer assuming oversubscriptions are fully subscribed, are 180 million; and maximum proceeds from the Offer assuming oversubscriptions are fully subscribed, are $378 million. The shares are expected to commence trading on the ASX on 31 October 2018.
 
What the group intends to do: The company will provide its investors the access to an actively managed Portfolio which will include both Long Positions (30 to 40 fundamentally driven positions) and Short Positions (about 100 short positions) in Australian listed securities. The company will provide the expertise of the investment team members to its investors and also the potential to diversify their existing portfolios through a net market neutral investment opportunity. The Company is planning to deliver positive returns in excess of the Benchmark over the medium to long term with the aim of allowing franked dividends to be paid to Shareholders when possible. The management of the company believes that the significant investment opportunities arise when the market’s view on the future is inaccurate. To uncover and capitalize on these opportunities, one must be willing to look beyond the present. The Company believes that fundamental analysis is the best way to capture all the different opportunities available in the market through time.
 
Managing Risks: The Board intends to use the funds raised from the Offer for investment consistent with the investment objectives and investment process of the group. Along with the Long positions, the Portfolio of the company will also include Short Positions which will be selected by the Manager to limit the Company’s net exposure to securities markets and macroeconomic risks. Risk Short Positions will also be used by the Manager to generate additional funding which is then used to increase the gross exposure in Long Positions up to a maximum of 200 percent of the Portfolio’s NAV. The company is facing a Concentration risk which means that the Company’s Portfolio may be less diversified than other listed investment entities. This is consistent with the Investment Strategy which focuses on balancing the Long and Short Positions within the Portfolio rather than diversity to generate returns and manage capital loss. The company is also facing Equity risk which means that there is a risk of Long Positions falling in value or Short Positions rising in value over short or extended periods of time. A Long Position falling in value or a Short Position rising in value could result in a reduction of the value of investment. Nevertheless, the group intends to have returns of 7% pa above RBA Cash rate.
 
This one is a close watch.
  
 

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