The new manager of troubled Blue Sky Alternatives Access Fund Ltd (ASX: BAF) has made an unprecedented guarantee to current and future shareholders.
In an extraordinary general meeting this week, 99.97% of the listed investment company's shareholders voted to hand over the reins to Wilson Asset Management.
BAF has been treading water ever since allegations surfaced that its previous manager exaggerated the magnitude of its assets.
Shareholders had watched in horror as their price went from a peak of $1.25 to just 68 cents in 2018.
But Wilson Asset Management chair Geoff Wilson on Wednesday sought to comfort investors with a promise he claimed was the "first of its kind in the Australian market".
Wilson Asset Management would live and die by what it calls the "premium target".
"The principle of the Premium Target is simple: the company's share price needs to trade at a premium to its pre-tax NTA for a period of one month for it to be achieved," Wilson said in a memo.
"If this does not occur at least three times during the next five years, shareholders will automatically have the right to vote to terminate the arrangements with Wilson Asset Management, and to liquidate the company."
Blue Sky's ironically colourful history
BAF has been in the headlines for all the wrong reasons.
The Brisbane-based LIC was born out of parent and manager Blue Sky Alternative Investments Ltd (ASX: BLA) in 2014.
BAF is an "alternative" fund because it provides retail investors access to opportunities they can't normally reach. These include water rights, venture capital and private real estate, according to Wilson.
Back in 2018, short-seller Glaucus Research went public with accusations that Blue Sky had been exaggerating its assets under management while charging clients sky-high fees.
The company denied this was the case and even reported Glaucus to the Australian Securities and Investments Commission for price manipulation.
But eventually Blue Sky was forced to revalue its assets from $4 billion to $2.8 billion.
While all this was happening, the BAF share price tumbled. That was when Wilson first approached BAF about taking over.
While BAF was favourable about the change in management, BLA blocked the move.
Days before BLA went into administration in May last year, BAF even told its parent to stop touching its money.
After the collapse of BLA, BAF was then free to court Wilson again.
So now more than a year later, Wilson has finally been allowed in the cockpit.
No wonder Geoff Wilson was forced to make an unprecedented guarantee to BAF's scarred shareholders.
"I personally hold 6.4 million shares in the company," said Wilson this week.
"We will engage with current shareholders and market to new shareholders with a plan to return the share price to a premium to net tangible assets."