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Trust Insider: gold minnows for a mining recovery

by James Carthew on Feb 25, 2014 at 00:01

Even added together, the base fees are the lowest of ARC’s peer group. There is also a performance fee that is 20% of excess returns over a 10% per annum hurdle since launch, subject to a high watermark, and 20% of any money returned to shareholders, subject again to the 10% per annum hurdle.

The manager did earn a chunky performance fee in the good times. It might be worth remembering that the high watermark resets if no fee is earned for three years, and we are not far off this.

At the outset a continuation vote was planned for the five-year anniversary of the fund’s launch  – that is, this year. If they get through it, the plan is to hold three-yearly continuation votes thereafter.

I realise for many of you the fund will be just too small to contemplate an investment but the rest of you might want to take a look.

ARC isn’t the only play on a recovering gold price but it seems to me that at some point the junior miners will be back in vogue and the NAV may spike up again.

James Carthew is a director at Marten & Co

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