Ironbark Capital Limited (IBC) was originally listed on the ASX in March 1987 as BT Australian Equity Management Limited.

In 2003, Kaplan Funds Management (KFM) was appointed as investment manager and the name was changed to Ironbark Capital Limited. In April 2014 Kaplan Funds Management was appointed to perform company secretarial and administrative duties.

As at 31 December 2018, IBC was capitalised on the ASX at $61.6 million with issued capital of 123.2 million ordinary shares.

IBC's focus on income generation and capital preservation from a balanced portfolio structure has delivered superior risk adjusted returns compared to the equity market.

Over the 10 year period the portfolio's return was 7.4% p.a. with 52% less risk than the ASX200 Accumulation Index return of 8.4% (inclusive of franking credits). In the most recent year a return of 5.6% was delivered with 44% less risk than the equities market.

About the Fund

Ironbark Capital is a listed investment company investing in ASX listed securities and fixed income securities in a balanced manner to achieve its absolute return objective over time. The portfolio emphasises income generation and will typically invest in buy & write strategies, property trusts, utilities, infrastructure, hybrids, corporate bonds and fixed interest securities.

The share portfolio aims to achieve:

• A positive investment return averaging the 1 year swap rate plus 6% over time with an emphasis on income generation

• The manager's focus is to deliver consistent returns and a fully franked dividend yield from the portfolio.

How we invest your money

Our portfolio is well diversified with investments in around 30 entities. Higher risk exposures in, eg banks, industrials and resources are largely held through buy & write option positions for income enhancement or added protection. The portfolio's hybrid and corporate bond holdings are floating rate securities which benefit from higher interest rates with little duration risk.

The IBC investment mandate requires:

• At least 50% of the portfolio after delta adjustment for any option derivative positions must be invested in listed securities at all times;

• The portfolio will not be geared by external borrowings;

• Financial derivatives may be used as an alternative to direct purchases or sales and hedging of risk but not used to produce financial exposures that would result in short selling or leveraging of the portfolio. Financial exposure is measured as the aggregate of physical exposure and derivative exposure through delta adjustment;

• Maximum weight to an individual stock in the top 20 is 15% and ex top 20 is 10%;

• Authorized investments include all listed securities and initial public offerings of securities to be listed on the ASX and rights issues and placements in respect of a listed class of security, cash, bank deposits, bank issued money market instruments, fixed and floating rate securities issued by a bank licensed to operate as a bank in Australia.

Kaplan Funds Management manages the above IBC mandate to achieve the following investment goals:

• A positive investment return averaging greater than the 1 year swap rate plus 6% over time with an emphasis on income generation

• A portfolio volatility or risk lower than the ASX 300 Index.

Incentive fees are payable by IBC to KFM for outperformance by the investment portfolio above this benchmark. Portfolio performance is adjusted for the benefit of franking credits.