Nick Bolton lawyers up as he heads for showdown with Magellan

afr.com:

Is it finally game on at the Magellan Global Fund, the investment vehicle that has caught the attention of Keybridge Capital’s Nick Bolton and his offsider, ex-Domain chief executive Antony Catalano?

Bolton, Street Talk has been told, is telling those close to him that he now has enough support from unitholders in the listed $2.9 billion trust to call for a meeting and attempt to wind up the vehicle. Unless Bolton can wind up the trust before March, millions of options that he holds could expire.

Nicholas Bolton. James Davies

MGF is a closed-end strategy that listed in 2017 and is trading at a 12.5 per cent discount to the underlying value of its portfolio of global stocks. If it is wound up, the unitholders would be able to cash out at the underlying value instead of the significantly lower trading price.

Street Talk has obtained correspondence sent by Keybridge Capital’s lawyers at Allen & Overy to MGF directors asking the trust’s responsible entity to explain what actions they’ve undertaken to address the discount.

In the letter, Allen & Overy also ask for details on any arrangements they’ve put in place to manage potential conflicts of interest, with reference to “a scenario where [Magellan Financial] have a vested interest in the discount of MGF remaining above 7.5 per cent”. “Our client requests that the Responsible Entity sets out why… the RE would not take steps to appoint an independent party to discharge its duties to resolve the discount,” it reads.

It would appear that Bolton believes Magellan’s decision-making is partially driven by a competing commercial interest to not have the options exercised – and save about $160 million – and retain the funds under management.

However, the board has not stood idle. It