About

NAOS Asset Management is a specialist fund manager providing genuine, concentrated exposure to Australian listed industrial companies outside of the ASX-50.

~8,000

SHAREHOLDERS

$330+

MILLION UNDER MANAGEMENT

3

LISTED INVESTMENT COMPANIES

9

STAFF

With a proven performance track record, NAOS seeks to protect investor capital whilst providing a sustainable growing stream of fully franked dividends and long-term capital growth above the relative benchmark index.

NAOS launched its first LIC in 2013 with 400 shareholders, today NAOS manages more than $330 million across three Listed Investment Company vehicles for more than 8,000 shareholders.

NAOS directors and employees have a significant interest in all three LICs, this means we are invested alongside our shareholders creating strong alignment of interests. In addition, more than 80% of NAOS Asset Management Limited is owned by Staff and Directors.

NAOS employ an Environmental, Social and Governance (ESG) screen across all its investments, an approach we firmly believe contributes to protection of our shareholders capital and sustainable long term investment performance.

Why Invest with NAOS?

01.

Access Something Different

With five large banks and two major mining companies making up 40% of the ASX-100 by market capitalisation, many Australian equity investors are at risk of being overexposed to these two sectors and may be missing out on opportunities to invest in quality companies in industries such as Media, Advertising, Agriculture or Building Materials. Industrial companies outside the ASX50 are our core focus, and we believe the LICs we manage provide pure access to these companies which are potentially less well known by the broader investment community.

02.

Management Alignment

We believe in backing people who are proven and aligned with their shareholders. One of the most fundamental factors which is consistent across the majority of company success stories in our investment universe is a high quality proven management team with ‘skin in the game’. NAOS Directors and staff members are significant holders of shares on issue across our strategies, so the interests of our shareholders are well aligned with our own.

03.

Capital Protection

NAOS place primary emphasis on protecting investors’ capital and to that end have the flexibility to hold up to 100% of the portfolio in cash, as it has been proven that holding cash offers the ‘best hedge’ during times of crisis. Since inception NCC and NAC have experienced significantly more positive monthly returns than their relative benchmarks and when we have experienced a negative month, the statistics show we were better at retaining capital compared to the broader market over the longer term.

04.

Fund Size

We are committed to capping our fund sizes in order to maximise potential shareholder return. This approach ensures we are nimble enough to access meaningful positions in quality companies where other funds may be too large to participate.

05.

Structure

Our closed end LIC structures provide an effective vehicle for long term concentrated investing as we are not forced into buying or selling to meet applications or fund redemptions for investors. This means we can set our own time frame for investment and we are able to provide patient capital to companies. This can create access to investment opportunities where the short term investor with fluctuating capital may be unable to act upon in the same way.

06.

Shareholder Communication

Facilitating open and transparent dialogue with our shareholders is necessary for investors to make informed decisions. NAOS believes in providing current and future shareholders with high quality, timely and constructive information via our shareholder communication activities. These initiatives include bi-annual investor roadshows in each capital city, monthly NTA reports, insights newsletters and quarterly shareholder calls.

07.

REGULARITY AND Consistency OF INCOME STREAM

LICs are structured to maximize effectiveness when it comes to the consistency and regularity of dividend payments.

Our Investment Beliefs

Value with Long Term Growth

We believe in investing in businesses where the earnings today are not a fair reflection of what the same business will earn over the longer term. Ultimately, this earnings growth can be driven by many factors including revenue growth, margin growth, cost cutting, acquisitions and even share buybacks. The end result is earnings growth over a long-term investment horizon even if the business was perceived to be a value type business at the time of the initial investment.

Quality over Quantity

Excessive diversification, or holding too many investments, may be detrimental to overall portfolio performance. We believe it is better to approach each investment decision with conviction. In our view, to balance risk and performance most favourably, the ideal number of quality companies in each portfolio would generally be 0 to 30.

Invest for the Long Term

As investors who are willing to maintain perspective by taking a patient and disciplined approach, we believe we will be rewarded over the long term. If our investment thesis holds true we persist. Many of our core investments have been held for three or more years where management execution has been consistent and the value proposition is still apparent.

Management Alignment

We believe in backing people who are proven and aligned with their shareholders. One of the most fundamental factors which is consistent across the majority of company success stories in our investment universe is a high quality proven management team with ‘skin in the game’. NAOS Directors and staff members are significant holders of shares on issue across our strategies, so the interests of our shareholders are well aligned with our own.

Ignore the Index

This means we are not forced holders of stocks with large index weightings that we are not convinced are attractive investment propositions. We actively manage each investment to ensure the best outcome for our shareholders and only invest in companies that we believe will provide excellent, sustainable long-term returns.

Pure Exposure to Industrials

With the big four banks making up a large portion of total domestic equity holdings for the SMSF investor group, many Australian investors are at risk of being overexposed to one sector and may be missing out on opportunities to invest in quality companies in industries such as Media, Advertising, Agriculture or Building Materials. Australian listed industrial companies outside the ASX 50 are our core focus, and we believe the LICs we manage provide pure access to these companies which may be lesser known by the broader investment community.

Performance v Liquidity Focus

We believe in taking advantage of inefficient markets; the perceived risk associated with low liquidity (or difficulty buying or selling large positions) combined with investor short-termism presents an opportunity to act based purely on the long-term value proposition where the majority may lose patience and move on. Often illiquidity is caused by aligned founders or management having significant holdings in a company. NAOS benefits from a closed-end LIC structure, which means we do not suffer ‘redemption risk’ and we can focus on finding quality undervalued businesses regardless of their liquidity profile.

Environmental, Social and Governance (ESG)

As an investment manager, NAOS recognises and accepts its duty to act responsibly and in the best interests of shareholders. We believe that a high standard of business conduct and a responsible approach to environmental, social and governance (ESG) factors is associated with a sustainable business model over the longer term that benefits not only shareholders but also the broader economy. NAOS supports the UN Principles for Responsible Investment and is guided by these principles in incorporating ESG into our investment practices.

Our Investment Process

Important Information: This material is provided for general information purposes only and must not be construed as investment advice or a recommendation. It does not take into account the investment objectives, financial situation or needs of any particular investor. Before making an investment decision, investors should consider obtaining professional investment advice that is tailored to their specific circumstances. Past performance is not necessarily indicative of future results and there is no guarantee that future performance, the amount or timing of any returns or that the investment objectives will be achieved.