In a rare private equity offer for NZ retail investors, the Australian Federation Asset Management, has added its flagship alternatives fund to the Apex (formerly MMC) platform.
Federation chief, Cameron Brownjohn, said in a release that the manager’s Alternative Investments II Fund (F2) hook-up with Apex followed “strong interest and demand from independent financial advisers in New Zealand”.
Private equity funds tend to be limited to institutional or high net worth investors and can prove problematic for investment platforms given their liquidity requirements.
However, the F2 fund offers monthly liquidity, the Federation release says.
Federation registered a retail product disclosure statement (PDS) in NZ this April under the trans-Tasman mutual recognition regime.
Brownjohn said the F2 strategy had achieved an “unrealised gross return” of more than 21 per cent since inception in September 2021.
According to the PDS, Federation has committed to six private equity placements to date after reviewing more than 500 potential investments.
The fund targets “high-growth yet defensive” companies in sectors such as “education, healthcare, clean power, real estate, financial services and technology”, the release says, with a focus on environmental, social and governance factors.
Portfolio holdings include Australian firms George Health, Windlab, Merredin Energy, Sendle and Plenti with an “exceptionally strong” pipeline of investment opportunities, Brownjohn said.
“In the current uncertain economic environment, the key for investors is to find growth opportunities with strong defensive characteristics,” he said. “Private equity has proved its value over the years, with little correlation with listed markets and a track record of producing superior returns when investments are made during downturns.”
But private equity does not come cheap: F2 charges annual fees of 2.95 per cent, the PDS shows.
Prior to co-founding Federation in 2018, Brownjohn was Macquarie Capital principal investments Asia-Pacific head. Other Macquarie alumni including Neil Brown and Stephen Panizza joined Brownjohn as the manager launched with about A$500 million in initial funding from high net worth investors five years ago.
Ann Sherry, former Westpac NZ chief and current co-chair of the Australia New Zealand Leadership Forum, serves as Federation chair.
The manager uses Apex as fund administrator in Australia.
Based in Bermuda, the Apex Group bought MMC late in 2021 soon after acquiring the Australian fund administrator, Mainstream. Last year Apex also snapped up Wellington fund-hosting and direct-to-consumer platform business, Implemented Investment Solutions.
Apex also has a global ESG private company database that may eventually be available to Australasian investors.