Frequently Asked Questions
- How did Liontamer come about?
- Why did we choose the name Liontamer?
- Who is behind Liontamer?
- What is capital protection?
- Why is there a need for capital protection?
- Who provides the capital protection?
- How are the trusts structured?
- How are Liontamer's investmens taxed?
- Where do structured retail products fit in portfolios?
Diagram of Liontamer's operations
Liontamer came about from the seed of an idea planted in October 2002. The firm’s founders, Laetitia Peterson and Janine Starks both have long experience in investment markets and they saw a clear gap in the capital protected market in New Zealand. They saw an opportunity to move the local industry forward to be able to offer New Zealand investors access to these products, which have been available in other countries for over a decade.
The first product was put together for launch in May 2003 and New Zealand's first capital protected investment specialist was in business.
In May 2007 the asset management arm of one of Europe's largest banks, KBC Group, joined Liontamer as shareholders. See the announcement on our NEWS page for details.
You can read some information about each member of the Liontamer team describing our background experience and explaining why we chose to establish and be involved in Liontamer in About Us.
Why did we choose the name Liontamer?
So why did we choose 'Liontamer'? In short, it comes down to two factors. First, it says exactly what we do, but in a slightly unusual way. The 'Lion' symbolises the world financial markets, often volatile and aggressive. And we are 'taming' the markets by providing investors with capital protection. That way, we are able to take some of the fear out of investing.
Second, we chose the name because it was different and we are different. We are providing investments which are new and innovative. We hope our name provides both a talking point and a reminder that there are always new ways of doing things.
Liontamer is 51% owned by KBC Asset Management, one of Europe's leaders in capital protected products. Belgium-based KBC is a very large financial services company with a market capitalisation that is bigger than New Zealand’s top 50 companies combined. KBC is listed on the Euronext Brussels and the Luxembourg Stock Exchanges. They operate across Europe and Asia with 12 million customers and around 60,000 employees.
The remaining portion is owned by Liontamer’s two founders, Laetitia Peterson and Janine Starks, who have full management control.
Click here to view a video called ‘Who are KBC?’
Capital protected investments are an area that more and more investors are now asking questions about. If it’s a completely new term to you, fear not, the basic concept goes like this:
- You invest your money for a fixed
period of time, usually 3-6 years (there
have been much longer-term plans around
too). Most people feel comfortable
with something around the 5 year mark.
- Instead of receiving a rate of interest, the returns are generated
from areas which offer more exciting potential. For example, the
returns could be linked to the sharemarkets, or a variety of other
assets, depending on the manager’s selection.
- The value of your initial investment is protected at maturity, even if the assets go down in value. So long as you stay invested for the full term, you won’t suffer the losses.
With investing, it’s all about weighing up the potential upside, against the possible downside (risks and returns). The bonus with capital protected investments is they provide you with a win-win on both counts. We aim to generate some very good returns and at the same time, structure our funds to try and protect you from any losses.
One of the most important considerations for investors looking for new opportunities is ‘financial strength’ – the ability to repay your original capital. Our capital protected investments address that concern by ensuring our funds have protection provided by global investment banks. The quality of their balance sheet is reflected in high credit ratings from Standard & Poor’s. You can read more about capital protection in the section below, headed ‘Who provides capital protection’.
Why is there a need for capital protection?
When you invest in a Liontamer fund the capital is protected from falls in the market, effectively providing an insurance policy wrap for your savings. Liontamer creates that insurance by investing in financial assets that are either fully or partially capital protected at maturity by KBC Bank. This protection from the volatility of certain asset classes gives investors peace of mind.
There are two main reasons why capital protected products are so appealing, and these can be categorised as theoretical (based on investment figures) and psychological (based on the belief that investors take a different view of capital and return risk). You can read about these reasons and the need for capital protection generally, in detail, in Investment Philosophy.
Click here to view a video called ‘What does “Capital Protection” mean?’
Who provides the capital protection?
A capital protected investment gives you peace of mind, because the fund will own investments that are either fully or partially capital protected at maturity by KBC Bank. KBC Bank is known as the ‘Fund Asset Provider’. Regardless of how the Index performs, KBC Bank is legally liable to repay 90% or 100% (depending on the unit type) of the original value of the investments owned by the fund. KBC Group is a Global Fortune 500 company (ranked 213 in 2008) with a strong Standard & Poor’s credit rating.
Click here to view a video called ‘How secure is my capital protected fund?’
How are the trusts structured?
Liontamer is an Australian investment management company. When you invest with Liontamer, you are buying units in an Australian unit trust. Some of our investments will only be available for a ‘limited window’ of 6 to 10 weeks, and each new investment we launch is in a new trust. We call this an 'umbrella' structure and it makes it very quick and easy to bring new investments to the market.
The key tax objectives in relation to our funds are that the investments are taxed at marginal rates in the hands of investors and the trusts are not taxed on an accruals basis and are therefore only taxable when the returns are paid out. We believe we have a very tax efficient structure which is constantly monitored so that we can adapt to changes in the tax environment.
How are Liontamer's investments taxed?
On 1 April 2007 the government introduced new rules surrounding the taxation of offshore investments. The rules add an additional layer of complexity as to how investors with offshore holdings provision for tax and we strongly recommend that all investors seek professional tax advice relevant to their personal circumstances. Your financial adviser, broker or accountant will be able to assist you with information about the current tax regime.
There is detailed information about the way our investments are taxed in the Investment Statement for each fund and we recommend that you read the latest Investment Statement. That information (and this brief summary) do not constitute tax advice to individual investors and are indicative of the likely tax treatment only.
Where do structured retail products fit in portfolios?
Structured retail products enable conservative investors to take more risk with the aim of increasing returns and provide the only mechanism for increasing exposure to financial markets while keeping capital risks at bay.
The psychological aspects of capital protection are based on the belief that investors often see two types of risk when they are investing.
a) risk to their original capital
b) risk to their returns i.e. that their
gains could be volatile and quickly eroded.
Very few managers break ‘risk’ down into these two categories. However, if people are asked about their attitudes, the majority have a far more conservative view of volatility on the downside, than they do of volatility on the upside. Investors are happier to place their returns at risk, than they are to place their original capital at risk. Protected investments allow you to separate these two aspects. You can invest into riskier underlying assets, while protecting your capital from erosion. No other product allows a restructuring of risk and return to suit the needs of investors. There is also more information about this in Investment Philosophy.