AIQ’s $1.47 Rights Issue Offers 10% Distribution Boost Starting 2026
Alternative Investment Trust (AIQ) has announced a 1-for-1 non-renounceable rights issue at $1.47 per unit, aiming to raise capital for ongoing investments and increase annual distributions to 10% of adjusted net tangible assets starting early 2026.
- 1-for-1 non-renounceable rights issue at $1.47 per new unit
- Offer open to Australian and New Zealand unitholders only
- Proceeds to support ongoing investment activities
- Annual distributions to increase to 10% of Adjusted NTA from early 2026
- Offer not underwritten; entitlements lapse if not taken up
AIQ's Capital Raise Strategy
Alternative Investment Trust (AIQ), managed by One Managed Investment Funds Limited and Warana Capital, has launched a significant capital raising initiative through a 1-for-1 non-renounceable rights issue priced at $1.47 per new unit. This offer allows eligible unitholders in Australia and New Zealand to purchase new units equal to their existing holdings, with the option to apply for additional units beyond their entitlement.
The pricing of the new units aligns with AIQ's adjusted net tangible assets (NTA) as of 31 July 2025, reflecting a fair valuation benchmark for investors. The rights issue is designed to bolster AIQ's capacity to pursue ongoing investment opportunities, signaling confidence in the fund's growth prospects.
Implications for Unitholders
Unitholders who choose not to participate by the closing date of 5 September 2025 will face dilution of their interests, as their entitlements will lapse and may be allocated to others. The non-renounceable nature of the rights means these entitlements cannot be traded or transferred, emphasizing the importance of active participation for existing investors.
Notably, the offer is not underwritten, introducing an element of subscription risk. However, AIQ has provided an opportunity for investors to apply for additional units, potentially absorbing any shortfall from unexercised entitlements.
Distribution Policy Enhancement
In a move likely to appeal to income-focused investors, AIQ has announced plans to increase its annual distributions to 10% of Adjusted NTA, commencing with the distribution scheduled for early 2026. This enhancement underscores the fund's commitment to delivering attractive yield alongside capital growth.
The timeline for the rights issue is clearly laid out, with key dates spanning from the announcement on 19 August through to the commencement of trading of new units on the ASX by 15 September 2025. This structured approach provides transparency and certainty for investors considering their participation.
Geographic and Regulatory Considerations
The offer is limited to unitholders with registered addresses in Australia and New Zealand, excluding overseas investors due to compliance costs and regulatory complexities. This geographic restriction is common in rights issues but may impact the fund's investor base diversity.
Overall, AIQ's rights issue represents a strategic capital raising effort aimed at supporting its investment agenda while enhancing returns to unitholders. The success of this offer will be closely watched by the market, given its potential to influence AIQ's capital structure and distribution profile.
Bottom Line?
AIQ’s rights issue sets the stage for growth and higher income, but investor uptake will be key to its success.
Questions in the middle?
- Will AIQ achieve full subscription given the offer is not underwritten?
- How will the increased distribution policy affect AIQ’s unit price and investor demand?
- What investment opportunities will the raised capital enable AIQ to pursue in the near term?
