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Hall Road Investments #43 (Family Office Sherpa, Index & ESG)

Originally sent to subscribers on December 11th.

The Sherpa Update

Year in Review – as the next email send date falls on Christmas day, this will be the final newsletter for the year. We will pick up again on the 8th of January.

Lots of highlights for Hall Road this year. We have assisted some of the largest family offices in the country build new investment infrastructure, presented to KPMG, CFA Society and PWN members, had two articles published by the International Family Offices Journal and one from Simple, we met and reviewed platforms, asset managers, brokers, tech providers, professional services firms, private banks, private and public equity, VC, investment consultants, philanthropic endeavours, the list goes on.

I was also asked to become a member of the Brown-Neaves Family Office investment committee, providing strategic advice to Brad, Garry and the wider family group.

It was a big year of education and information gathering, giving Hall Road a unique perspective on the assets and infrastructure of family offices and advisers, in Australia and across the globe.

New Article – I’m very pleased to have my first Simple article published here. For those that don’t know the firm, they describe themselves as “a next-generation insights lab focussed on helping family offices and private investors to professionalize and be future-ready. Our team of bright people dotted around the globe craft simple solutions for the complex scenarios that businesses are faced with every day.”

Options – One major issue with the recent ASX outage is that the Tailor Made Combinations (TMC) service was offline for a lot longer that the main board. If you’ve ever tried to figure out options strategies for clients, you’ll know this is a major problem and increased risk for any firms providing advice.

Endowments – Sydney Uni’s head of investments has a new role. Miles Collins has joined advice firm Walker Lane as IC chair. I had to ask a contact, apparently this won’t affect his role with the endowment.

LICs – It should always be in the back of you remind that these are investment companies and are subject to corporate actions, take overs etc which you won’t get with an MIS. The recent shenanigans relating to the Contrarian Value Fund LIC, the investment managers Arawon and activist LIC investor Miles Staude should be illustrative.

Macquarie – Purchased US based Waddle& Reed. For a business that was built on transactional broking Macquarie is very keen to offload that area of the purchase to LPL. It means they retain the business that makes the most profit for the least amount of compliance headache – asset management. MER over brokerage is the future, with a nice tie up for US distribution.

Contango – has given the Swtizer High Yield Fund management over to Coolabah Capital and moved it to a listed structure.

Xeppo – I spoke to this firm as netwealth recently took an equity position. They are a connecting tool and I thought they may be able to assist with connecting investment platforms. Unfortunately, this is not a solution yet but they reckon it’s on the cards.

Canopy – I also spoke with this firm as they reached out following my Simple article. I really like a component of their business called Extract which may be able to help clients with the disparate data sources from suppliers such as banks etc. I’m looking at you, Citi.

Supplier Meetings – Ardea, Canopy, Xeppo, PortfolioCloud.

Indexing and ETFs

ASX 50 – Morgan Stanley is calling Afterpay as an addition to the ASX50 index, Mineral Resources into the ASX 100, Reece, Kogan, Tyro and PointsBet to be added to the ASX 200.

Know what you’re investing in.

Magellan – the news that they have moved to an open class structure apparently means that it can be included in the total FUM for ETFs in Australia. No. I always had an issue with the way the ASX reported ETPs as a group and called them ETFs – this is not an ETF.

ESG & Philanthropy

Robeco – has launched a product using its SDG framework which will be interesting to see. With Sustainalytics (Morningstar) and Lonsec both pushing into the Sustainable Development Goals overlays, Robeco is the first to launch a credit fund within this space domestically. It’s targeting 4-6% yield.

Regnan – SGDs are all the rage now with Pendal owned Regnan launching an Aussie version of its UK strategy that targets these UN goals. Regnan will publish annual impact reports and quarterly updates, and will publish the SDG taxonomy it has developed for those interested.



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