Recent Buy: Thorney Opportunities Ltd (TOP.AX)

Thorney Opportunities Ltd (TOP.AX) is an Australian listed investment company which concentrates on producing absolute returns for shareholders over the medium to long term. Its primary focus is on the careful selection of investments which enable it to be a constructive catalyst towards unlocking the value in the companies that it identifies. It invests mostly in small and mid cap stocks. The chairman and CIO is Alex Waislitz.

Portfolio Composition

TOP has a fairly concentrated portfolio, currently with investsments in AMA Group (AMA.AX), Austin Engineering (ANG.AX) , OneVue (OVH.AX), Money3 (MNY.AX), Service Stream (SSM.AX), TPI Enterprises (TPE.AX), Fairfax Media (FXJ.AX) and iSelect (ISU.AX). I found it hard to get a recent breakdown of the allocation of stocks Thorney are invested in, but you can see the concentration from 2016 in the table below.

Source: Intelligent Investor

What’s great is that 2 years on, TOP still own each of these investments. It’s encouraging to see they act as long term investors 🙂


Thorney Investment Group took over Wentworth Holdings in 2013. This means that in its current form we only have a 5 year history go by. If you check out the chart below we can see Net Tangible Assets per Share (NTA) have increased year on year – as has the share price. Values are for end of June each year and end of May for 2018.

The NTA per share has increased over 5 years at a CAGR of 10.99% p.a.. Share price has a CAGR of 13.9% p.a.

Current dividend yield is fully franked and sits around 1.8%.



The management fee is 0.75% p.aand a performance fee of 20% of the increase in the net asset value each financial year. While the base fee is reasonable, I think a performance fee like this is – to put it bluntly – thorney. Currently TOP is trading around a 9.5 – 10% discount to NTA which makes the fee arrangement slightly more palatable.


Standard investment risks apply. Additionally, the NTA may decline in value, TOP may trade at a persistent discount to NTA or fail to outperform a similar passive small to mid cap index fund.

Should Alex cease to be involved with the company, it might be less attractive so there is an element of key man risk.

With a very concentrated portfolio, changes to NTA could be lumpy which may put off some investors or lead to greater volatility.

Why I bought Thorney Opportunities

Alex is a well respected securities analyst and has a good history of picking investments that turn out well.  The approach at Thorney is to buy undervalued companies, and sometimes to petition the board of a company to make value enhancing decisions – for instance, Alex urged Fairfax Media to buy back stock when it was trading at a meaningful discount to intrinsic value.

The discount to NTA is slightly better than the recent 3 year average of 7 – 8%. Over time I believe this gap will narrow and that the underlying holdings will appreciate. Overall, the LIC could provide a decent return.

Thorney Opportunities complements my current holdings of Aussie LIC’s Barrack Street Investments and Cadence Capital and UK listed trust Aberforth Smaller Companies Trust and Finsbury Growth and Income Trust. These investments have helped improve diversification of the WF30 Portfolio and some offer good dividend yields.

Let me know in the comments below if you have an opinion on TOP, own shares in them or any other LIC!

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