Some members are excited for retirement, while others approach it with a “real sense of shame and fear”. Funds are going to have to figure out how to cater to both groups or risk failing them all.
If there’s one lesson for investors from the past five years, it’s that chopping and changing their strategy – even in the face of massive market turmoil – doesn’t always pay.
Family office-style boutique manager recruits for growth
By Greg Bright
Supervised Investments Australia Ltd (SIAL), a family office-style boutique fund manager, has recruited a new chief executive tasked with building the business through an expanded product range and investment capabilities. Family office expansion is a trend.
Michael Ohlsson, who started his new role this month, is a former chief executive of Fidelity International in Australia and then Tibra Investment Management, who has for the past few years been involved with a fintech start-up and various consulting roles. His recruitment follows the retirement of Ouafaa Karim.
SIAL is controlled by two high net worth individuals: former stock broker David Constable and former long-time CFO of Time Warner globally, Ken Cooper. The two also account for a significant proportion of funds under management, along with friends and family.
Constable was the senior partner of two broking firms in a long and distinguished career – Constable & Bain and Pembroke Securities. He was also chairman of Pembroke Financial Planners (which became Godfrey Pembroke) and a director of a UK planning firm, Towy Law Plc, which was also taken over. He is a director of SIAL, chair of the two investment committees and the owner of Constable Estate Vineyards in the Hunter Valley of NSW.
Cooper spent most of his career in the US and UK with Time Warner, then the world’s leading media company, and was chair of the company’s UK pension plan, before returning to Australia just prior to the formation of SIAL in 2007. He is a non-executive director and also owns a boutique winery near Bowral, NSW.
Helen Coonan, a former Federal Liberal senator and cabinet minister, is the SIAL independent chair.
Professional management of money for high-net worth individuals and families is a growing trend, with many private companies employing experienced fund managers alongside portfolio managers to bring in more comingled assets to get the benefits of greater scale.
The Roberts family office, RF Capital, for instance, last year announced the recruitment of experienced funds management marketer Dean Winterton, who joins next month from Perpetual, followed by the former head of alternatives at BT Financial Group, Chris Thompson.
One of the largest family offices, that of the Myer family, which has more than 100 staff, last year split its operation into two – investments and the business side – and recruited the chief executive of Equip Super, Danielle Press.
SIAL has two funds, the original Australian-domiciled international equity fund, the ‘Supervised Fund’, and a global fixed income fund launched in 2009 following the financial crisis. Prompting Ohlsson’s recruitment, as a sales-oriented chief executive, the fixed income fund – Supervised Global Income Fund – entered the retail market last year with a PDS which allows the manager to accept sums as low as $10,000. The equity fund, which is concentrated in the micro-cap segment of the Australian market, is wholesale only.
Both funds can point to excellent performance since inception. The Supervised Fund, under lead portfolio manager Mitch Taylor, has returned 9.97 per cent a year over nine years, after fees, compared with the All-Ordinaries Accumulation Index return of 2.81 per cent and the fund’s benchmark return of 5.00 per cent. In the past year it returned 35.29 per cent, compared with the All-Ords’ 11.65 per cent.
The global income fund, which invests only in floating rate securities and therefore has no interest rate duration risk, is run by lead portfolio manager Phil Carden. It has returned 9.35 per cent annualized since April 2009, after fees, compared with its benchmark of 4.59 per cent. In the past year to December it returned 6.39 per cent compared with the benchmark of 4.12 per cent.
Matthew Aspinall, SIAL’s key account relationship manager who joined the firm in 2015, says the income fund, which invested in Australian RMBS securities when they were unpopular, and now is increasingly allocating to US CLOs, has had no defaults from any of its sub-investment grade investments since inception.
“It’s a very conservative fund,” he said. “We stress test everything to make sure we get our principal back and interest…. We have only had one negative month in the past eight years.”
Ohlsson said that he was approaching institutional investors, too, for the income fund. He said he was attracted to the idea of building an Australian boutique, especially one which already had strong investment capabilities, and would be talking to people about new strategies and products for the future. He said he would also be talking to other family office-style investors as potential clients.
