Arowana generates value by being both “operator and investor”. We are not “asset gatherers”, and pride ourselves on this important distinction. We frequently return capital to investors upon successful realisations. Conversely, we only raise capital when we can identify truly differentiated opportunities for our partners. Presently, Arowana manages a number of public and private funds on behalf of our investors and employees.
Fund I: Australasian Special Situations Fund (AASSF)
The AASSF is an unlisted fund that includes a venture capital limited partnership. The fund achieved an IRR of 21%, is currently in harvest and therefore closed to new investments. It was established to enable investors to take advantage of significant opportunities providing alternative funding to small and medium sized enterprises that are unable to obtain conventional financing. These investments can be structured to limit downside, deliver favourable risk asymmetry and achieve IRRs in excess of 20% (incorporating annualised yields in excess of 8%).
The AASSF invests in non-controlling stakes in SME companies in Australia, New Zealand and Asia that require investment capital but are unable to secure it from conventional sources. It does so by investing through structured securities that typically have both debt and equity features. Qualifying investments ideally have the following characteristics:
- Ability to secure voting rights between 10% and 49%
- Board representation (at least 25% by number of board members)
- Opportunity for significant influence and management engagement
- High yield potential (through subscription via pre-IPO notes, convertible securities, ordinary shares with warrants, etc.)
- First ranking security status
- Risk asymmetry (i.e. upside risk greater than downside risk)
- Potential IRR of 20%+
- Tailwind drivers
Arowana Contrarian Value Fund (Listed Investment Company)
The Arowana Australasian Contrarian Value Fund Limited (“Arowana CVF”) is an ASX listed investment company (LIC) (ASX ticker CVF) managing approximately A$85 million* of Australian and International listed securities.
Our investment objectives are simple; generate superior returns over the medium to long term, provide shareholders a rising stream of dividends, and grow Net Tangible Assets per share.
Our broad investment mandate allows Arowana CVF to invest principally in Australian & New Zealand securities but also International listed securities. In addition our flexible mandate allows us to hedge our portfolio.