- From: The Australian
- May 26, 2010
FUND manager and Warren Buffett fan Justin Beeton has launched three new funds, including his second to invest in the "Oracle of Omaha's" New York Stock Exchange-listed Berkshire Hathaway.
Mr Beeton's Sydney investment firm JB Global is hoping to raise up to $150 million, or $50m per fund, and says it is getting strong interest for the Berkshire Hathaway and US real estate funds.
The company also launched a new S&P/ASX 200 fund yesterday, with all three closing on June 26. JB Global raised $58m in March for its first Berkshire Hathaway fund, investing in the company's B-class shares, also known as "Baby Bs". The cheaper Baby Bs last traded at $US70.30 ($86.69), much lower than Berkshire A-class shares at about $US106,000, after Mr Buffett in January split them 50-to-one to make them more accessible to retail investors. "I still think the company is great value at these levels," Mr Beeton said. "We were pretty successful (last time) and there were investors that heard about the investment after the close date, so we've got an issue of demand from those investors to justify putting it together."
Mr Beeton, who used to work in capital protection at Macquarie, said the Dow Jones US Real Estate Index, which the real estate fund plans to invest in, is down 60 per cent from its 2007 highs and the US economy and market sentiment "seems to have bottomed".
Investors in the fund must borrow 100 per cent of a minimum of $50,000, with interest pre-payable at 3.3 per cent.
The loan is non-recourse and provided by the Royal Bank of Scotland. "Even if it just rebounds over the next three years, half of what it's fallen, that's huge gains," Mr Beeton said. The interest rate for the Berkshire Hathaway and ASX 200 fund is 4.95 per cent, but Mr Beeton said all funds had the same currency and capital protection structures.
"We've hedged out the currency risk and provided capital protection provided by RBS, so there's no chance of investors losing their capital," he said.
Investors can claim quarterly redemptions and contingent coupons of up to 8.1 per cent are payable on performance.Download the 2009 Warren Buffett Letter & 2009 Annual Report to Berkshire Hathaway Shareholders
Download the 1977 - 2009 Warren Buffett Letter's to Berkshire Hathaway Shareholders
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