The Magellan Financial Group Ltd (ASX: MFG) share price has dropped lower today despite the release of a positive update this morning.
At the time of writing the fund manager's shares have sunk lower with the rest of the market and are down 1.5% to $49.69.
What did Magellan announce?
This morning Magellan provided an update on its Magellan High Conviction Trust.
Magellan's new trust was announced in August and will invest in a concentrated portfolio of high quality global companies, weighted towards its best ideas.
The investment strategy of the trust will replicate the investment strategy of the unlisted Magellan High Conviction Fund which has returned 16.6% per annum net of fees since its inception in July 2013.
Magellan will be the investment manager and act as the responsible entity, with Hamish Douglass and Chris Wheldon acting as the portfolio managers.
Investor demand for the trust has proven strong, with Magellan announcing today that it has now closed the initial public offering and indicatively raised $862 million.
Magellan's chairman and chief investment officer, Hamish Douglass, appeared to be very pleased with the response.
He said, "We are very pleased with the successful initial public offering for the Magellan High Conviction Trust which has raised approximately $862 million. We received applications from approximately 17,000 investors participating in the Priority Offer and 1,800 investors participating through the General Public and Wholesale Offers. We welcome each and every investor and look forward to continuing our partnership over the years to come. We firmly believe our partnership approach is a win-win outcome for our investors and Magellan shareholders."
Units are expected to be allotted on October 8 2019 and holding statements are expected to be despatched on the same day. After which, the trust is expected to begin trading on the ASX on Friday October 11 2019.
Magellan advised that the estimated costs of the offer that will be paid by it, inclusive of loyalty units and IPO foundation units, are approximately $55 million.
Elsewhere in the industry today, IOOF Holdings Limited (ASX: IFL) and Platinum Asset Management Ltd (ASX: PTM) shares have also tumbled lower with the rest of the market after the U.S. revealed plans to place tariffs on Europe.
