Marlin

[winner69]

One thing I do get is that the discount to NAV is often what the market sees as the cost of future management fees ...think of it as OK you give somebody a $100 to look after for a long time but you are going to pay him $X a year to look after it and protect it ...so in reality when you get your $100 back you spent quite a lot of money in having it kept safe ....so it not really worth $100 today is it

In MLN case the discount to NPV is about $15 million .......that's what the market sees as how much the manager is taking out in fees in the future. The market is not inefficient or stupid or just doesn't get it ....the market is only valuing something for what it is really worth, taking into account what it knows ....ESP about management fees

[Balance]

Not up with play here Bal but are you saying they sell things to pay this divie? Doesn't this then reduce the amount of assets in the fund? So the NAV reduces ......yes? And then if the discount to the NAV remains constant then the share price will fall as well?

So cash in the hand but on the other hand the paper value of my MLN shares have gone down as well. .....or am really stupid and this is not what happens

Exactly what is happening (capital paid out to look like dividends) BUT we have individuals here actually believing that Marlin is a great dividend stock!

So here's the rub :

1. Put in $1.00, sp falls to 96 cents immediately as costs etc eat up 4%.

2. Bad performance so NAB goes down to 85 cents.
Market discounts for bad performance so sp falls to 75 cents.

3. Pay out 6 cents from capital so NAB falls to 79cents.
Sp falls to 70 cents.
Take out 2 cents management fees, NAB = 77 cents.

4. Genius comes along and go - wow, 7 cents dividend on sp 70 cents - it's 10% yield!

5. Pay out another 7 cents next year so NAB falls to 70 cents. After management fees, NAB falls to 68 cents.

6. Super Genius comes along and says, wow dividend yield of over 10%.

Buy! Buy!

Meanwhile, those who put in $1.00 originally are wondering whether to get out or not but if they try to, they are doing so at a discount to NAB.

Meanwhile, the manager(s) are crying into their champagne - fearful that Elevation may just get the right support and wind the fee-generating loss making fund up.

[ratkin]

100% correct

I know i like to talk up MFF in comparison , mainly becaue they started around the same time .
They are handling things much better.
Just announced their first dividend , of 1cent per share (apx 1%) The SP has just about fully recovered from the GFC and they are looking in good shape. The portfolio companies are paying MFF more in dividends than MFF are paying the shareholders , which is as it should be. There is enough left for them to grow.

Marlin on the other hand appears to be eating itself. Has anyone worked out how many years it would take for the SP to reach zero?

[winner69]

Pity one can't buy shares in Carmel's management company

[winner69]

A bit here and a bit there all adds up eh ..... I see the management collected $13m odd in fees lady year

Good on her .....making a few bob helping hundreds of thousands of nzer's getting richer ....sems win win .....well sort of

[ratkin]

The strange thing about Marlin is that it is supposed to be investing in small growth companies, many of which dont pay dividends, why then is Marlin trying to act like a high yielding dividend stock??

[CJ]

Winner- one comment re the discount reflecting future management fees.

If investors thought the management would deliver returns above market, the discount should be a premium.

Not an apples to apples comparison but I believe IFT trades above its NAV.

[Anna Naum]

Reading the full releases over the weekend it looks like Elevation may have approached Marlin prior to the board of Marlin entering into a new agreement with Fisher Funds to manage Marlin. If so one has to question why the board of Marlin entered into a new contract when they knew a proposal to wind up Marlin was going to be made.

If this is correct it reflects very poor board governance by the independent directors of Marlin.

[Balance]

Reading the full releases over the weekend it looks like Elevation may have approached Marlin prior to the board of Marlin entering into a new agreement with Fisher Funds to manage Marlin. If so one has to question why the board of Marlin entered into a new contract when they knew a proposal to wind up Marlin was going to be made.

If this is correct it reflects very poor board governance by the independent directors of Marlin.

Independent? Not when there's directors' fees to be earned to infinity.

[Anna Naum]

Independent? Not when there's directors' fees to be earned to infinity.

Interesting thing is that the two so called independent directors were both appointed in the last 12 months so have yet to be voted for by shareholders.......thus can they really say the represent shareholders?