Fat Prophets’ SPP Raises Questions on Capital Growth and Liquidity Impact
Fat Prophets Global Contrarian Fund has announced a Share Purchase Plan allowing eligible shareholders in Australia and New Zealand to buy up to $30,000 in shares without brokerage fees. The move aims to increase fund size and trading liquidity ahead of potential broker coverage.
- Share Purchase Plan offers up to $30,000 per eligible shareholder
- Offer price set at lower of $1.30 or discounted five-day VWAP
- No brokerage, commissions, or transaction fees for participants
- Funds raised to be invested per current fund objectives
- SPP expected to enhance liquidity and broker research interest
Share Purchase Plan Details
Fat Prophets Global Contrarian Fund (ASX – FPC) has unveiled a Share Purchase Plan (SPP) that invites existing shareholders in Australia and New Zealand to increase their stake by purchasing up to $30,000 worth of shares without incurring brokerage fees. This initiative, announced on 14 August 2025, is designed to encourage shareholder participation and strengthen the fund’s capital base.
The offer price for the new shares will be the lower of $1.30 or the five-day volume weighted average price (VWAP) during the last five trading days before the closing date, minus a 2% discount. This pricing mechanism ensures shareholders can access shares at a potentially attractive rate, incentivizing uptake.
Strategic Implications for FPC
By expanding its capital through the SPP, FPC aims to increase the size of its fund, which can have multiple benefits. A larger fund size typically improves trading liquidity, making it easier for investors to buy and sell shares without significant price impact. Additionally, a more substantial asset base may attract brokerages to initiate or enhance research coverage, potentially raising the profile of FPC in the investment community.
However, shares issued under the SPP will not be entitled to dividends, which is a standard condition in such offers but worth noting for income-focused investors. The Board has also reserved the right to close the SPP early, which introduces some uncertainty around the final capital raised.
Timetable and Next Steps
The SPP opened on 18 August 2025 and will close on 10 September 2025, with allotment and trading of new shares expected by mid-September. Shareholders on record as of 7 PM Sydney time on 13 August 2025 with addresses in Australia or New Zealand are eligible to participate.
Funds raised will be invested according to FPC’s existing investment objectives, maintaining the fund’s contrarian strategy. Investors and market watchers will be keen to see how the additional capital is deployed and whether the increased liquidity translates into improved market performance and investor interest.
Bottom Line?
FPC’s SPP could mark a turning point in liquidity and market relevance; watch for subscription uptake and share price reaction.
Questions in the middle?
- How much capital will the SPP ultimately raise, and will the Board exercise the right to close it early?
- Will the increased fund size lead to new broker coverage and analyst attention?
- How will the fund deploy the additional capital, and what impact might that have on performance?
