Hamilton Sirius Fund
The original purpose of the Hamilton Sirius Fund (the Fund) was to provide a primary investment vehicle for the directors of Hamilton Asset Management Limited, their families and close friends.
However, as the Fund is a registered managed investment scheme, the directors have decided to open the fund to investment from members of the general public.
The Fund is a contrarian value investor and looks to buy investments which Hamilton Asset Management Limited (Hamilton) believes are undervalued. Many of these investments will be out of favour or less well known, or investments which are experiencing temporary duress which may provide an opportunity to buy them cheaply. As a result of this, the portfolio of the Fund will be more eclectic and somewhat different to that of other investment funds.
What asset classes will the Fund invest in?
The Fund can invest in any assets classes, but will invest primarily in equity and/or debt securities listed on an Australian stock exchange or another international stock exchange.
A maximum of 20% of the assets of the Fund may be invested in assets that have limited liquidity.
What are the fees for managing investors’ money?
Hamilton looked to set an investment managers fee that was fair to investors, and also to Hamilton as the investment manager, and considered various alternative ways.
During our research we came across what Charlie Munger, the Vice Chairman of Berkshire Hathaway Inc, described as the most fair fee formula that ever existed. This was the same fee formula that Warren Buffett applied to the original Buffet Partnerships. “The Buffett formula was that he took 25% of the profits over 6% per annum, with a high water mark. So if the investor didn’t get 6%, Buffett, would get nothing. … And I like that system, but it’s like many things that I like and I think should spread, we get like almost no successes spreading that system. It’s too hard.”
So that is the fee structure we have adopted for the Hamilton Sirius Fund: the fee structure that Charlie Munger described as the most fair fee formula ever. We do not know of any other fund in Australia that has adopted this fee structure.
Is an investment in the Fund right for me?
If you do not intend to hold your investment in the Fund for at least five years, then the Fund is unlikely to be right for you.
In addition investors seeking a guaranteed, market linked, fixed income or short term trading gains, should not invest in the Fund.
Why does the Fund have an exit fee?
In order that investors are encouraged to adopt a long term view of their participation in the Fund, investments that are withdraw within 12 months will attract an exit fee of 5%.