Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 276

Chris Cuffe: investing with Hearts and Minds

It’s not often that an opportunity presents itself where you can both make money and contribute to a good cause. A new listed investment company (LIC), Hearts and Minds Investment Limited (Hearts and Minds), of which I am Chairman, is one such opportunity.

Hearts and Minds is seeking to raise up to $500 million and list on the ASX in November (ASX:HM1). There are many LICs on the market, but what makes Hearts and Minds different from most is that it has a charitable goal.

Of course, an objective of Hearts and Minds is to make money for investors, but Hearts and Minds will forego any investment fees and instead make donations to designated medical research charities every six months. Also, the Hearts and Minds Board and Investment Committee members have waived rights to be paid director and committee fees. The lead arranger and brokers for the Offer have waived broker management fees.

The donation amount for each six-month period will be equal to 1.5% per annum of the average monthly NTA (net tangible assets) for the previous half-year. If the portfolio increases in value, the donation amount will increase.

Investment in medical research is critical, and this field has historically provided instances of strong returns. For every dollar invested in medical research, it is estimated that an average of $2.17 in health benefits is returned.

High-conviction picks in a concentrated portfolio

Aside from the charitable goal, the Hearts and Minds LIC is aimed at investors seeking exposure to a high-conviction portfolio of global equities.

The portfolio will be concentrated, with only about 25 stocks. Hearts and Minds will take long-only positions on Australian and international listed securities based on the highest conviction ideas from two groups of fund managers:

  • 40% of the portfolio will be held in about 10 securities based on the recommendations of fund managers who present at the yearly Sohn Hearts and Minds Investment Conference.
  • 60% of the portfolio will be held in about 15 securities based on the quarterly recommendations of five leading fund managers: Caledonia, Cooper Investors, Magellan, Paradice Investment Management and Regal Funds Management.

Hearts and Minds has been established following the Sohn Hearts and Minds Investment Conference, which is in its third year now. At this Conference, industry professionals share their expertise and provide their best investment ideas. It sells tickets and the proceeds go to medical research. It has raised $8 million to date.

The Hearts and Minds IPO thus provides shareholders with an opportunity to benefit from the expertise of each fund manager, some of whom are not readily accessible to retail investors.

Investors will also benefit from having a portfolio that is not concentrated on the philosophy or investment thesis of just one fund manager.

Initially, the designated charities are: Victor Chang Cardiac Research Institute; Black Dog Institute; The Brain and Mind Centre, Sydney University; Charlie Teo Foundation; The Children’s Hospital at Westmead; Florey Institute of Neuroscience & Mental Health; Centre of Human Psychopharmacology, Swinburne University; Multiple Sclerosis Research Australia; Orygen; and Royal Prince Alfred Hospital, Research.

Strong momentum with more than $225 million in commitments

Hearts and Minds has already attracted strong support with numerous cornerstone family investors having already committed more than $185 million. Members of the Board and the Investment Committee and their associates are committing more than $40 million to the Offer. Heats and Minds will not accept oversubscriptions.

The Board has a strong mix of business, social enterprise and philanthropic experience.  It includes Ariadne Australia director Dr Gary Weiss, Wilson Asset Management founder Geoff Wilson. UBS Australia CEO Matthew Grounds is a proposed director.

The Board of Hearts and Minds has appointed Rory Lucas as the CEO. Rory has worked in the Australian and global equity markets for nearly 30 years. Rory’s specialty is in trade execution, portfolio construction and risk management. His previous roles include managing funds at Rothschild Australia Asset Management, a senior equity facilitation role at UBS, and trading and execution roles at the Commonwealth Bank of Australia.

The IPO opens on Monday 15 October 2018 and is expected to close on 6 November 2018. Shares in Hearts and Minds are expected to start trading on the ASX on 21 November under the code HM1.

This is an investment supported by some of the best and brightest fund managers and investors in the nation, with a genuinely worthwhile philanthropic goal.

I encourage you to read the Prospectus. Applications under the general Offer can be made by completing the application form attached to the Prospectus or online through the application form accompanying the electronic Prospectus. Applicants under the broker firm offer should contact their broker for application details. The Lead Arrangers for the Offer are CommSec, NAB and Crestone. Brokers include Bell Potter, Evans Dixon, JB Were, On-Market Book Builds, Ord Minnett, Paterson, Shaw and Partners, Taylor Collison and Wilsons.

Watch the video of my introduction to the Hearts and Minds Investments Limited Offer, including some of the medical work that will benefit.

 

Chris Cuffe is Chairman of Hearts and Minds Investment Limited and Founder and Portfolio Manager of Third Link Growth Fund. He is also a Co-founder of Cuffelinks. This information provided is general and does not constitute personal financial, tax or legal advice. Any participation in the Offer is subject to disclaimers in the Prospectus.

View Chris Cuffe's appearance on ABC's The Business program here.

Download Independent Investment Research's IPO Research Report on HM1 here.

  •   15 October 2018
  • 3
  •      
  •   
3 Comments
Chris
October 18, 2018

Well done, Chris, another project with no personal financial reward for you. Don’t know how you manage your wide portfolio, excellent time management I think.

Penny
November 02, 2018

Hi Chris,
I was excited to read more about the “Hearts and Minds” LIC as I am always looking for ethical investments. However I was dismayed to see that only one of the designated charities ( Black Dog Institute) do not participate in animal experimentation. All the others would be responsible for the more than 10 million animals that are experimented on every year in Australia, not only laboratory animals but dogs ( 7,205 in 2015), cats ( 2,780) and primates ( 382 in 2015). And of these, in 2015, 24,920 animals were used in the ‘Death as the end point” category of experiments, which are very nasty.
Now I know most of the public would say we need to experiment on animals to improve human and animal health and that it is a necessary “ evil”. However more and more studies are showing that the extrapolation of data from animals to humans can be dangerously misleading due to anatomic, genetic and metabolic differences. This is especially the case with drug research where 95% of drugs that enter clinical trials do not make it to the market, despite all promise of a breakthrough and the unnecessary suffering of hundreds of thousands of animals used to develop them.
As an example of your charities, both Sydney Uni and Royal Prince Alfred have used baboons to test radioactive substances, University of Sydney have been using marmosets in brain and vision experiments, this research involves the animals being placed in a skull frame, undergoing a craniotomy and having electrodes inserted into their brains while still alive.
But back to an investment in “Hearts and Minds”
A survey conducted by Nexus Research in April 2018 found that 59% of people would not donate to a health or medical research charity if they knew it was funding animal experimentation. I do hope you and your investors give consideration to , and become informed about, how much of your funds are contributing to the inhumane suffering of sentient individuals. Had you a good selection of medical charities that do not use animals and who recognise and embrace new ,scientifically valid technologies and methods that are specific to humans, I would have been keen to invest.
There is a list of humane charities available via Humane Research Australia, if any one is interested.
Thanks for opportunity to comment.

Brett
November 23, 2018

Penny, don't invest then. If we applied the philosophy you state above generally there would be no scientific research. I suppose you support experimenting on humans and think that vaccines don't work.

 

Leave a Comment:

RELATED ARTICLES

Why LIC discount harvesting is a buy-and-hold decision

Listed Investment Company deals for 2019

Four options for an income investor’s next dollar

banner

Most viewed in recent weeks

Why spending more in early retirement can improve lifetime income

Conventional wisdom encourages retirees to preserve superannuation. But if those likely to qualify for the Age Pension later in life spend a little more today, it may deliver higher lifetime income and a more stable retirement.

Testamentary trusts have secured the CGT exemption

Treasury’s latest CGT reform draft delivers a win for testamentary trusts and deceased estates, exempting estate-derived gains from the 30% floor. However, questions on death and divorce rollovers remain unresolved.

Meg on SMSFs: What do we think about reversionary pensions these days?

Reversionary pensions have long been a staple of SMSF estate planning, but are they still the best option? Meg Heffron revisits a once-clear favourite and asks whether changing super rules have shifted the balance.

Is it time to bail on Australian stocks?

For generations, Australian investors have backed banks, miners and dividends. But has that loyalty come at a cost? A look at the numbers raises an uncomfortable question about where future returns will come from.

Testamentary trusts survived the trust tax. The drafting battle has just begun.

The fight over testamentary trusts looked settled. Then the draft legislation arrived. Hidden in a technical detail is a question that could force many families to rethink wills they thought were already future-proof.

How does the 4% rule stack up?

The 4% rule has long been retirement's gold standard. But after a difficult period for investors, fresh analysis suggests a more conservative approach may significantly improve the chances of making savings last.

Latest Updates

Planning

How the typical Australian Family could save $844,350 in taxes

The value of a testamentary trust is not determined by wealth alone. Depending on circumstances, it can reduce the tax burden on inherited income, create efficiencies and help build intergenerational wealth.

Superannuation

There's a reason why your super is locked up until your 60s

For decades, it seemed settled. Then one controversial idea reignited a debate that could reshape the financial future of millions. The real question isn’t who’s right or wrong, but whether a long-held assumption deserves another look.

Property

The housing slide could become a crash

House prices are sliding across Australia, yet the most dangerous ingredient for a housing crash is still missing. If job losses surge amid growing economic risks, today's correction could become a historic property downturn.

Retirement

Under-retiring: The greatest retirement risk in a generation

Two retirees. Similar savings. Completely different lives. New research from Challenger reveals why some Australians confidently spend in retirement while others hold back and the overlooked factor shaping retirement decisions.

Five risks to watch in markets

Things you may often hear are: a recession is around the corner, markets are overpriced, the AI sector is about to flop at any moment. It’s like the never-ending laundry pile that sits in my house, it never really disappears.

Investment strategies

Do you qualify as ‘rich’?

What does it mean to be 'rich'? For something so universally desired, it is surprisingly difficult to define. That ambiguity creates a challenge for investors and raises a bigger question about what financial success really looks like.

Investment strategies

If you’re worried about your bond portfolio, you’re missing the point

Most investors think they know what bonds are for. But when markets turn volatile, a surprising misunderstanding can lead to costly decisions. Here’s the overlooked lesson that could change how you view your portfolio.

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.