Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
AWI cements new portal purchase
Australasian Wealth Investments has confirmed the purchase of a second managed funds purchase and advice portal, agreeing to pay up to $12.5 million for YourShare, a small business based in the NSW southern highlands.
The deal was foreshadowed in a presentation coinciding with AWI’s annual general meeting last month, at which was decided to turn the company from an LIC into a traditional listed stock with one board of governance. It follows the purchase of InvestSmart, from Fairfax for $7 million, a similar portal with a different demographic.
YourShare is based in Mittagong and has 14 staff. AWI intends to maintain that operation under its business model which allows for separate, either wholly or partially owned businesses, continuing with a certain level of operational independence. It has annual revenues of $5.2 million and funds under administration of $915 million.
In a statement last week, AWI said: “…”[AWI] now owns two of the largest online self-directed financial services portals in Australia, with combined FUA of $1.6 billion over 40,000 invested clients and more than 300,000 subscribers to its website, in addition to an undiluted 49.6 per cent share of van Eyk Research, which has $1.2 billion in FUM.”
The purchase price is made up of $10.5 million cash and another $2 million subject to a hurdle to do with YourShare’s NTA.
