Blue Sky’s new MD: ‘Our LPs probably understand our business better than our shareholders’

In an interview with Agri Investor, interim managing director Kim Morison said Robert Shand’s decision to step down was a mutual one between himself and the board.

Blue Sky Alternative Investment’s interim managing director has admitted that the Australia-listed firm needs to work harder on helping the market understand its investments in the wake of a short-selling attack by a US hedge fund.

Speaking to Agri Investor, interim MD Kim Morison (pictured) said: “The public market doesn’t understand that we manage private investments, and that’s been our problem. We’ve got to do a better job of helping the public market understand what we do.”

Morison took over as interim MD yesterday (April 23) after incumbent MD Robert Shand resigned. Shand had been defending Blue Sky’s business model to investors since the short-selling attack by hedge fund Glaucus began on March 29, but stepped down as the firm’s share price continued to fall.

Shares recovered slightly today, rising more than 5 percent to A$3.26. Shares stood at A$11.40 before the publication of Glaucus’s critical report in March.

On Shand’s departure, Morison said: “It was a mutual decision. It was put to the board that if it wasn’t in the best interests of the business for him to remain as MD, he’d stand aside, and that’s what was decided.

“I’ve got a really, really strong team around me in real assets which has enabled me to take on the [interim MD] role.”

Morison said yesterday in a statement to the market that he would focus on rebuilding confidence in the firm and increasing its transparency, which he reiterated today.

“The share price doesn’t impact on any of our current investment management activities. It is a barometer of confidence for new stuff, so we have to address that, as fund investors will want to be satisfied that they understand us fully before they invest in our underlying private market funds. Institutions, though, have already done that,” he told Agri Investor.

“Our institutional investors probably have a greater understanding of our business than our shareholders do – as our clients they’ve done all their due diligence, which they’ve done again since the attack started, and they’re still happy.”

Morison also said that Blue Sky’s real assets division, which he has headed up since 2010, was performing well. “Our focus [there] is on agriculture and water, which took a long time to get going. We are increasingly getting more engagement in those areas, too, and some of those deals are pretty large.”

The Glaucus report, published at the end of March, accused Blue Sky of misleading investors and overstating the value of its investments. Blue Sky has denied the claims.