We operate across the spectrum of real alternative assets, with teams that specialise in infrastructure, property, private equity, private debt and natural resources. While traditional alternative asset managers focus on the assets we focus on the cash flows that are generated by the assets, which broadens the opportunity set, facilitates effective comparison of opportunities, and enables selection of those assets and sectors offering the highest risk adjusted returns at any point in time.
Unlisted assets are acquired opportunistically in our clients’ portfolios and each asset requires individual attention, including detailed modelling, of their specific risk. We bring a higher standard of governance policies and procedures than those used for listed assets to maintain constant and close attention of the directly held assets.
Our assets are globally diversified, with 57% of assets in Australia, and the remainder across the UK, Europe, North America and elsewhere, as shown below (as at March 2012):
Our assets are diversified across a range of sectors as shown below (as at March 2012):
The sectors are broadly classified as follows:
Infrastructure assets form the core of our clients’ alternative asset portfolios, with investments in greenfields and brownfields assets located in both developed and emerging economies. Our investments are predominantly in the equity of infrastructure assets but we also have made significant investments in the senior and mezzanine debt of these assets. When investing in infrastructure assets we look for potential investments to provide a stable and predictable cash flow.
We typically invest directly in property but we also will invest indirectly via pooled investment vehicles where it will benefit the clients' portfolio. We look to property to provide our clients' portfolios with similar cash flow characteristics to that offered by infrastructure; stable and predictable. In our experience there is a significant overlap between the two areas, and often, the underlying economics of an infrastructure asset are supported by real estate.
Private equity provides diversification for our clients’ portfolios which would otherwise be dominated by relatively low risk alternative assets. We have an active and wide ranging program in private equity, albeit with relatively small individual commitments to each individual investment. To a large degree these investments are made via third party managed pooled vehicles.
Our long history of investing in the equity in infrastructure, property and private equity provides us with additional insights when assessing the debt of these entities. For nearly 10 years we have advised on, invested in and managed private debt assets for our clients to enhance the cash flow and risk characteristics of their alternative asset portfolios.
While a large part of natural resources is mining and timber plantations, we appreciate there is more to natural resources; such as ownership of the land that supports these activities and the debt that funds these activities. We are global investors in natural resources and use both direct and indirect means to gain access to these opportunities. Our key to measuring and evaluating any potential opportunity in natural resources is understanding the nature of the expected cash flows generated by the opportunity.