PIMCO listing starts a new wave of LITs

Global fixed income manager PIMCO is launching its first ASX-listed Australian investment trust – The PIMCO Global Income Opportunities Trust (ASX:PMX). The fund aims to deliver regular income and attractive risk-adjusted returns by using PIMCO’s best income-generating ideas on a global sector basis. Here are some of the highlights from the fund:

• ASX Code – PMX
• Subscription Price – $2.00 per Unit.
• Number of Units – 250 million
• Offer proceeds – $502.5m
• The manager will contribute $0.01 for each unit subscribed under the offer, so applicants will pay a subscription price of $2.00 per unit.
• Distribution target – 4.75% to 5.75% pa (net of fees & expenses)
• PMX is aiming to raise an amount of approximately $500 million.
• Portfolio team – Dan Ivascyn, Alfred Murata, Robert Mead, Jing Yang, Giang Bui, Adam Bowe
• Management fee – 1.24%

PMX will seek to provide attractive risk-adjusted returns and current income (i.e. regular distributions) by investing predominantly in a portfolio of globally sourced fixed-interest securities, which may include government and government-related debt, corporate debt, mortgage-related and other credit securities of varying maturities.

The fund may invest in both investment-grade and sub-investment grade debt instruments and may use various derivative strategies (both long and short positions). It will adopt a multi-sector approach, spanning government, government-related, corporate, residential, commercial, consumer and speciality finance. The trust may invest in both investment-grade and sub-investment grade debt instruments and securities and instruments that are economically tied to “emerging market” countries.

The trust will be managed by a team of three of PIMCO’s most senior portfolio managers, Dan Ivascyn, managing director and Group Chief Investment Officer; Rob Mead, managing director, head of Australia and co-head of Asia-Pacific portfolio management; and Alfred Murata, managing director and portfolio manager, mortgage credit. Other members of the portfolio management team include Adam Bowe, portfolio manager, Australia; Giang Bui, portfolio manager, securitized debt; and Jing Yang, portfolio manager, structured credit.

PIMCO’s group CIO, Dan Ivascyn, said: “PIMCO has a long and successful history of managing listed trusts around the world. The flexibility of the listed structure provides us with greater opportunities to pursue high-conviction positions to generate attractive income. We will continue to employ our long-standing ‘bend but don’t break’ approach, rigorously analysing and stress-testing potential opportunities that we believe can offer a resilient return profile under a broad range of economic scenarios.”

Rob Mead, head of Australia and co-head of Asia-Pacific portfolio management, said: “We are very pleased to be launching this unique offering to Australian investors at a time when the need for income is strong. PMX will represent PIMCO’s best income-generating investment ideas, taking advantage of our dedicated investment specialists from around the world, and our depth and reach across global fixed income markets.”

Ishan Dan

Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.