Welcome to the Eternal Growth Partners Blog.
The Blog is created as a tool to communicate information with unit-holders of EGP Fund No. 1. This will be the default communication tool, the only materials that will be mailed out to unit-holders are those we are legally required to. The purpose of this is to minimise costs in order to maximise returns.
The Blog is a two person operation, created & monitored by the founders of the Fund Manager – Eternal Growth Partners Limited. Eternal Growth Partners (EGP) was the brainchild of friends and long-time investors Tony Hansen and Dave Grant. EGP was created in response to the dearth of Managed Funds available for retail investors where the Fund Managers interests (and fee structure) were genuinely aligned with Fund Holders interests.
EGP Fund No. 1 will be established with no Annual fee and a fee of 20% of the out-performance of our chosen benchmark. This means if the benchmark returns 10% and EGP fund No. 1 returns 8%, you will pay nothing in fees, if the benchmark returns 10% and the fund generates 12%, the net return after fees to unit-holders will be 11.6%. I encourage any investor thinking of committing to any managed fund to look seriously into the fee structure because in excess of 80% of fund managers’ fail over the long term to beat a benchmark after fees are taken into consideration. Our target will be an average annualised out-performance of 3 – 5%. Some further details will be available in the Product Disclosure Statement (PDS), which we hope to issue here by January 1 2011.
Our selected benchmark is the S&P/ASX200 (TR) index (33,836.58 at close of trade 26/10/10). The benchmark can be followed at:
We chose this benchmark because it is a mainstream and relevant measure of the performance of the Australian share market as a whole with dividends reinvested.
The reinvestment of dividends in a total return index is critical in an historically high dividend paying country like Australia, the re-investment of dividends generally accounts for 4 – 4.6% of total return. From the S&P website above, as at today, the 5 year annualised return is 4.15% p.a. for the Total Return index and –0.25% for the S&P/ASX200. Never forget this fact when benchmarking an investment.
The fund is scheduled for an informal launch on 1st of July 2011. We will accept investors from this date; however, we anticipate the majority of our investors will be friends and family, people who are aware of how we have performed historically; it is not our intention to market the informal launch.
The formal launch is tentatively slated for 1st July 2016, though may be brought forward at EGP’s option if FUM (Funds Under Management) exceed $20 million before this date.
I expect to initially have between 22 and 25% of my family's net worth invested in the fund, I expect that proportion to increase to over 65% by formal launch (as I liquidate our other share holdings in a timely and tax effective manner). As time goes by and the proportion of our net worth not dominated by the ownership of our family home grows, I would expect that figure to approach 90%. So if you’re looking for a fund manager, who will ‘eat their own cooking’ as the expression goes, you can be sure you’ve found one with EGP.
We will try to post on a reasonably regular basis; mostly the purpose of the blog will be dissemination of fund related information.
We will, from time to time comment on any developments in and around the market that interest us, or any thoughts or opinions that we feel may better help our investors to understand what drives us.
So welcome aboard investors and watchers alike, and we look forward to a long and fruitful relationship – Tony Hansen 27/10/10