# CVF - Contrarian Value Fund



## System (27 December 2014)

Arowana Australasian Value Opportunities Fund aims to provide investors with:

The opportunity to access a listed investment vehicle with a long only focus employing the fundamental value based investment philosophy and approach of Arowana & Co.
An exposure to an actively managed portfolio of Australian and New Zealand listed securities.
Access to a highly experienced investment team of fundamental value based investors, with a rare combination of funds management experience and track record; deep operational skills and expertise; and extensive corporate finance experience.
http://aavof.com


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## robusta (4 July 2015)

A couple of interesting ideas in this newsletter. AWN is the manager.

http://www.asx.com.au/asxpdf/20150703/pdf/42zlssh3fb8jw0.pdf


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## System (4 December 2017)

On December 4th, 2017, Arowana Australasian Value Opportunities Fund Limited (AWQ) changed its name and ASX code to Contrarian Value Fund Limited (CVF).


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## InsvestoBoy (24 April 2020)

This looks pretty interesting...

As of the last monthly update (https://arowanaco.com/wp-content/uploads/2020/04/CVF-Mar-2020-Monthly-NTA-Update.pdf)

this LIC is sitting 71% in cash, 29% equities. It's currently trading ~75c and the most recent weekly NTA update from 20th April had it at 99c NTA.

Their top 5 holdings are 21% of the portfolio and are Pershing Square (Bill Ackmans hedge fund), Carnival (cruise liner), Taylor Wimpey (UK homebuilder), Discovery Communications (TV channel), Village Roadshow (entertainment stuff).

Basically trading at 75c with 99c NTA this is trading as if 24c of their equity holdings are worth 4c...looking at the charts for their top 5, certainly nothing that would indicate any such pain.

Decided to take a punt and clear out all the offers at 75c. I normally wouldn't make a trade like this outside of my bounds but given the large cash holding and discount to NTA, I don't feel like my underlying exposure changes much and gives me some USD, EUR, GBP flavour to my cash.

If they up their equity exposure I will sell some VAS.


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## InsvestoBoy (24 April 2020)

Couldn't help myself and took all the offers at 76c as well


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## Dona Ferentes (24 April 2020)

InsvestoBoy said:


> Couldn't help myself and took all the offers at 76c as well



55,440


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## finicky (24 April 2020)

You have aroused my interest


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## InsvestoBoy (24 April 2020)

Spooked myself out of the trade and sold it all back into the market now for a 1.7% loss.

Couldn't stop thinking about what might happen if they can't close the gap to NTA.

Note to self: stay away from closed end funds.


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## Dona Ferentes (24 April 2020)

> LIC is sitting 71% in cash, 29% equities



With an ICR of 2.48% , that's expensive cash management


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## Dona Ferentes (1 December 2020)

trouble in LIC land.  From Global Value Fund GVF


> Throughout this year, GVF has had substantial engagement with the board of Contrarian Value Fund (CVF), a listed investment company (LIC) in Australia. GVF is the largest shareholder of CVF and has engaged to help bring forward solutions for the company’s weak performance and poor share price rating. One of these solutions included a potential merger offer with GVF. At the time that this indicative offer was discussed, CVF was sitting on a considerable deferred tax asset that would have otherwise been completely lost under a liquidation of the company. Our logic in presenting a merger offer to the CVF board was that, structured well, it could add considerable value to both CVF and GVF shareholders. Among other benefits, GVF shareholders were expected to gain the substantial benefit of utilising CVF’s large deferred tax assets. CVF shareholders would have had the opportunity of a full cash exit at their company’s NTA, faster and at less cost than would be the case under a winding-up. Alternatively, they could have continued an investment in GVF, enjoying a number of potential tax benefits in the process.





> From the outset of our engagement with the CVF board, and regardless of our indicative merger proposal, we have repeatedly put to the CVF board that we fundamentally disagreed with their position that its investment manager, Arowana, was entitled to a substantial ‘termination fee’ under any restructuring or liquidation of the company. As our engagement with the CVF board dragged on, markets rallied substantially and the size of CVF’s deferred tax assets shrunk considerably. More concerning to us as investors, was that we sadly formed a view that CVF’s directors were not sufficiently independent of Arowana to assess key issues like the manager’s ‘termination fee’. On 12 November 2020, GVF decided it was no longer in its interests to pursue a merger with CVF, and having lost confidence in the CVF board, took steps to remove three of the four company directors. Since that time, the CVF board has rushed out a company liquidation proposal at close to NTA which includes what we believe to be an *egregious and unjustifiable *‘termination fee’ to Arowana.






			https://www.globalvaluefund.com.au/wp-content/uploads/2020/11/GVF-letter-to-CVF-shareholders-26-Nov-2020_Final-2.pdf
		


.... .to be continued


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## Dona Ferentes (7 December 2020)

Due to the CVF portfolio’s material uplift in value in November and the Directors having negotiated some reduced costs, if the Sale and Distribution Proposal is approved, the Directors estimate that CVF will distribute approximately $1.07 per share to Shareholders prior to 31 January 2021.


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## frugal.rock (18 December 2020)

Is that $ 1.07 mentioned by the dirrctors dependent on the share price at all?
9 cent divvy announced and seems many have run for the hills and have crashed the SP around 65% pushing it below 40 cents... eek.


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## Dona Ferentes (18 December 2020)

frugal.rock said:


> Is that $ 1.07 mentioned by the dirrctors dependent on the share price at all?
> 9 cent divvy announced and seems many have run for the hills and have crashed the SP around 65% pushing it below 40 cents... eek.



*Two capital initiatives announced (on 15 Dec)*
Distribution Amount .. AUD 0.09000000
Ex Date  ............ Friday December 18, 2020

Return of Capital amount per security .... AUD 0.61000000
Trading in the re-organised +securities on an "ex return of capital" basis commences ... Friday December 18, 2020


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## Dona Ferentes (18 December 2020)

so, who blinked?

...  _Notice (to appoint new Directors) was withdrawn by GVF on 16 December _

_.... a result of these negotiated cost savings, the Directors of CVF still expect shareholders to receive approximately $1.071 per share despite the cost leakages attributable to GVF’s actions.  The Directors of CVF will continue to monitor and identify opportunities to reduce costs in relation to the Sale and Distribution and subsequent wind-up of the Company. 

Further to the resolutions of the Annual General Meeting, the Directors of CVF plan to release a Notice of Extraordinary General Meeting in order to formally wind-up the Company and appoint a liquidator as soon as practicable. The likely timing of any meeting will be in February 2021 after the majority of Shareholders’ funds have been returned. _


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## System (2 March 2021)

On February 26th, 2021, Contrarian Value Fund Limited (CVF) was removed from the ASX's Official List in accordance with Listing Rule 17.11, after security holders resolved to remove CVF from the Official List.


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