Mountains in Clouds


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Hall Road Investments #31 (O-COO/OCIO Index & ESG)

The Outsourced COO/CIO

Stockbroking – Euroz is making a play for fellow Perth broking house Hartley’s. I’m just surprised Shaw and Partners wasn’t the buyer. The proposed transaction would see Euroz issue 33 million shares at 91.5¢ a share as consideration for 100 per cent of Hartleys and would see Hartleys shareholders own up to 17 per cent of the combined group.

Speaking of Shaw’s, they recently sold more of the firm to EFG, giving Lawrence Zion and Earl Evans a nice pay day.

Risk – I was on a KPMG webinar with Accordant Global. I have met Pete Shanley a few times and have some understanding of the business model. Non-financial risks are not usually covered by a family office, the unknown is becoming more apparent and just how vulnerable you are is surprising.

I also took this from the webinar – as part of your regular family meetings, is a risk conversation a part of the agenda? Another point was how important it is to increase resilience of the family office and how they set their culture. This recent pandemic has a lot of people looking inward.

Sargon – is now called Certes. One day someone will launch a new business that doesn’t have a Latin name that I have to google.

VGI – big news with the resignation of Doug Tynan, Head of Research.

Stake – no coincidence that a surge in “free” US equity brokerage co-coincides with a big market drop and recovery. ASIC’s recent report on retail investors punting on the market fits right into this business model.

Some funny lines from old active fund managers in the press stating that the recently volatility is caused by “millennials” punting on the stock market. Montgomery: “People were punting on the equity (Hertz) not realising that the equity and the capital structure is the last to be repaid. The speculation in the stock after they announced Chapter 11 bankruptcy just shows you how uninformed traders are at the moment.”

Because punting on falling knives has just been invented “by the kids” and their Robinhood trading accounts. At least he wasn’t blaming ETFs…

L1 – interesting that former Seed Capital Partners Head has joined L1 Capital last month. Seed was heavy in the LIC capital raising space (including the massive L1 raising) and now that the lucrative stamping fees have dried up we may see more of these moves.

Hesta – Stephanie Weston has been hired by HESTA which is great. Stephanie was a client when in charge of investments at Genworth, a great pick up for the fund.

Funds ManagementWarakirri has stepped in to buy half of Flinders Asset Management following the closure of Prodigy Asset Management, the Euroz/Steve Tucker JV.

Platforms – I don’t want to bore everyone by how interesting I find this area, but I have another to add to the list – Integrated Portfolio Solutions (IPS) which is based in Sydney. The COO is Nigel Singh who I know from Morgan Stanley as he was a client for ETFs and I met (Zoom) with one of the founders this week. Unlike a lot of platforms in Australia, IPS may align to Family Office in that it has a strong non-custodial platform to hold private assets. Anyway, let me know if you want more detail, I’m going to keep digging.

Digital Advice – PictureWealth has announced it has acquired Perth based Neo Financial Solutions and raised around $12M. Neo has 94 advisers and $2bn in FUA which was surprising. Not sure how much they paid for Neo. Tech platform Hub24 purchased dealer group Paragem back in 2014 and that seems to be working out.

LICs – Lanyon’s ongoing pursuit of the Contango LIC is getting interesting. The LIC’s total return for the 12 months to May was negative 16.31% and its return since inception in 2015 is minus 0.27%. So, you know maybe Lanyon has a point when it says that the investment strategy is “fundamentally flawed.”

Indexing and ETFs

Tech Index – when S&P/ASX launched this benchmark a lot of people thought it a a recipe for disaster. Well, if you had some exposure there in this recovery you had a fantastic return. Maybe this benchmark will stick around after all.


Tesla – without being an expert, I am very excited to hear about the announcement on new battery technology the company will apparently be making in September. I live in Perth, and engineers are everywhere so I will finally have something to ask them at school pick up.

Jack Dorsey – In a world looking for more transparency, I read with interest about Jack Dorsey (Twitter) and his Start Small charitable vehicle. A point of difference to most philanthropic endeavours, he is listing every single gift in real time, in a public Google sheet no less.

A sole person, Vanessa Terry, who also oversees Dorsey’s family office, is directing the donations. No formal applications, reporting requirements or site visits. Interview then allocation. Certainly, it’s different to most donor advised funds which seems a more “future” intent and can sometime labour under a lot of administration and intermediation.

Here’s the full story on Vox for those interested.

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