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Artesian Corporate Bond Fund

A diversified portfolio of liquid, predominately investment grade fixed and floating rate corporate bonds

Credit
Managed Funds
Bond Fund
25K

Minimum Investment Size

External
Validation

Investors

$3.9M

Amount Raised

 


The Pitch





1. Highlights

The Artesian Corporate Bond Fund will invest in a diversified portfolio of liquid, predominately investment grade fixed and floating rate corporate bonds. With Australian interest rates at all-times lows, floating rate note securities (FRNs) offer fixed income investors opportunities to take advantage of potentially rising rates.

Key features of the opportunity:

  • Target Return Range - Daily RBA cash rate +2.25% to +3.25% (net of fees).*
  • VentureCrowd register wholesale investors are able to gain access to the Artesian Corporate Bond Fund on Institutional terms.
  • The Fund will invest only in AUD interest bearing securities. 
  • The fund design offers investors diversification away from equities and cash. 
  • The fund is managed by Artesian Capital Management (Australia) Pty Ltd, experienced and successful asset managers who have been managing their funds along with client funds for +10 years. 

*See data room for further information.
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2. Artesian Capital Management


Artesian is an alternative investment management company that was part of ANZ's Banking Group's capital markets business until 2004 when it became a standalone business. Artesian is wholly owned by directors and partners.

Since 2004, Artesian has managed specialised funds focused on credit arbitrage and relative-value strategies across global financial markets from its New York, London, Singapore, Sydney and Melbourne offices.

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3. Investment Strategy 



  1. The Fund will invest in AUD corporate bonds comprised of Australian and registered foreign companies.
  2. We actively manage the portfolio, we do not track an index and if we don't like the market we can exit our positions and wait for opportunities.
  3. A carefully selected large floating rate note exposure in order to reduce interest rate risk.
  4. An optimally constructed portfolio selected from diverse market sectors.
  5. The portfolio is likely to consist of 50-60% floating rate securities, 30-40% fixed rate securities, and the balance in cash to invest opportunistically in both fixed and floating rate securities.
  6. Excess returns are expected to be generated through a well constructed bond portfolio plus high velocity turnover in the Australian bond market.

RBA cash rate versus Australian Consumer Price Index.
Data Source: Bloomberg, February 2017.         

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5. Fund Facts



Exclusive offer: VentureCrowd registered wholesale investors can gain access to the Artesian Corporate Bond Fund on institutional terms. Wholesale investors who invest a minimum of $25,000 in the fund, gain access to the same fee structure traditionally reserved for institutions that invest a minimum $5 million in the Fund.    
Fund Objective:  The Fund will invest in a diversified portfolio of liquid, predominately investment grade fixed and floating rate corporate bonds.
Target Return: Daily RBA cash rate +2.75% (net of fees).
Liquidity: It is intended the fund will offer daily liquidity to investors.
Distributions: The fund expects to make quarterly distributions (automatically reinvested unless otherwise advised).
Diversification: The fund is designed to offer investors diversification away from equities and cash.
Management Fee: 0.55% (plus GST).
Administration Fee: 0.20% (plus GST).
Performance Fee: None.
Minimum Investment: $25,000.



9. Investment Management Team

Matthew Clunies-Ross
Managing Partner
Chief Investment Officer
Artesian Capital Management

Matthew was one of the founding partners of Artesian which was created in 2004 with capital from the partners and ANZ Private Equity. Matthew has been managing Artesian's global bond fund for 10+ years. Prior to co-founding Artesian, Matthew spent 12 years trading and selling global bond/credit products for investment banks including ANZ, HSBC and Macquarie Bank in Australia & the United Kingdom. Matthew has a Bachelor of Economics from Monash University.

David Gallagher
Managing Director
Portfolio Manager
Artesian Capital Management

David joined Artesian in June 2013 and has been managing the Australian portfolio with Matthew since that time. Prior to joining Artesian, David spent 9 years in the United Kingdom working for Deutsche Bank and RBS. David has extensive risk and portfolio management trading experience. In David's previous role, David managed a credit portfolio with outright risk ranging between £1-2.5 billion. David has a Master of Applied Finance from Kaplan (formerly Securities Institute of Australia). Whilst studying at the Securities Institute of Australia, David was awarded the Macquarie Bank Dux Award for being the top graduating student.



10. Further Information


Data room 

Further information about this investment opportunity is available in the data room.