An investment manager has demonstrated sweet timing and generated an annualised return of more than 2,200% by selling a small proportion of the shares it bought the same day in recently-listed GemLife Communities.
Firetrail Investments identified itself as a substantial shareholder in the retirement housing developer in an ASX announcement that disclosed it owned 20.657 million shares, representing 5.44% of the company’s issued capital.
Firetrail bought 21.147 million shares for $88.154 million, or an average of $4.17 per share, on 3 July, the day the company listed on the Australian Securities Exchange (ASX).
But the Sydney-based institution also sold 471,240 for $2.085 million, or an average of $4.42 per share, the same day, according to the announcement.
In doing so Firetrail, which has A$5.4 billion (US$3.51 billion) under management, realised a $120,000 profit, representing a 6.11% return on the day, or 2,230% if annualised, while retaining 98% of its stake.
It is the third largest substantial shareholder after the founding shareholders, the Puljich family (26.3%) and Thakral Capital (16.7%), a unit of Singapore-based real estate investor, Thakral Corp (SGX: AWI).
GemLife (ASX: GLF) raised $750 million in an initial public offer (IPO) at $4.16 share, capitalising the company at $1.6 billion, with the shares trading as high as $4.47 on 3 July.
Since then they have slipped below the issue price and, at the time of writing, were trading at $3.995 each, down 10.4 cents (2.56%) on the day.
Created in 2015, GemLife manages 32 over-50s ‘lifestyle resorts’ with almost 10,000 low-maintenance homes completed or in development.
Firetrail describes itself as an investment management boutique that specialises in high conviction investing, building concentrated portfolios of its best ideas to generate outstanding long-term performance for our clients.
