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.
Mann launches alternatives range for thirsty retail market
Sam Mann, the hedge fund manager who set up the former K2 Advisors in Australia, has now established his own business in partnership with Ironbark Asset Management.
Mann, the chief executive, and Andrew Flitcroft, the chief operating officer, have established Longreach Alternatives, which is providing a range of bespoke alternatives strategies for the retail, family office and private wealth market, including having exclusive access to the K2 Advisors international manager line-up.
K2 Advisors, which became a subsidiary of Franklin Templeton in 2013 and is now known as FT Solutions, is one of the most successful hedge fund-of-funds managers globally. It has about US$10 billion under management.
Mann opened the Australian office in 2007 and became the firm’s Asian region head after having had worked with Ironbark founder, Chris Larsen, at Deutsche Asset Management prior to that. Ironbark is providing backoffice and other services to Longreach, including an RE if required.
Mann said last week that there was a “huge opportunity” for alternatives in the “non-big super world”, because of the size and increasing sophistication of those assets, due to the growth in SMSFs and family offices, and because of their contestable nature, and lack of available products.
Longreach has negotiated exclusive access to the K2 Advisors’ individual managers and will advise its own retail clients on how to build bespoke alternatives solutions.
I think the retail world for alternatives is similar to how the institutional market was 10 years ago,” Mann says. “These investors are looking for the building blocks for their own portfolios. We are not distributing a fund of funds. We are providing a very strong research and governance model with K2 as our partner. We will create unit trust structures with a raft of underlying managers that the investors would otherwise not have access to… I’m bringing sophistication to what I think of as an ‘aspirationally sophisticated’ group of investors.”
Ironbark already offers some K2 Advisors strategies through its Global Diversified Alternatives Fund and has a total of about A$650 million under management and advice in the Alternative space. “They could see the desire for direct single-manager access,” Mann says, “so it was a natural fit for us.”
But Mann and Flitcroft are not stopping there. They are also looking to provide institutional and retail investors alternative yield strategies without reliance on traditional markets such as equities or bank hybrids, which have tended to be a mainstay of individual investors.
These include: royalty streams, such as royalties from US energy owners; a direct lending business offering mezzanine debt for the wholesale market; renewable energy royalties in Australia; a reinsurance offering including catastrophe bonds; and a water rights offering.
“The common theme among all these is to provide long-term and dependable income streams that are not correlated to the share market,” Mann says.
He is looking for partners in each of the categories.
Meanwhile, at Franklin Templeton, Mann’s former colleague Felicity Walsh has taken over management of the Australian alternatives business.
