1 00:00:00,000 --> 00:00:13,040 Welcome back to the Rate of Change with York Wealth Management. 2 00:00:13,040 --> 00:00:17,040 As advisors to some of the wealthiest families in the country, the Rate of Change is a podcast 3 00:00:17,040 --> 00:00:21,040 designed to help you in the pursuit of building long-term wealth through the insights of some 4 00:00:21,040 --> 00:00:23,560 of the brightest minds in asset management. 5 00:00:23,560 --> 00:00:28,120 I'm your host Murdoch Gaddi and in today's broadcast, we're speaking with Cameron Brownjohn, 6 00:00:28,120 --> 00:00:36,040 the CEO at Federation Asset Management about investing in mid-tier Australian private equity. 7 00:00:36,040 --> 00:00:41,560 If you're an investor familiar with private equity or this is your first rodeo in exploring 8 00:00:41,560 --> 00:00:45,720 this asset class, then I think you're really going to benefit from Cameron's experience 9 00:00:45,720 --> 00:00:47,520 and insights. 10 00:00:47,520 --> 00:00:53,240 Federation has roughly 2 billion of funds under management in which institutional investors 11 00:00:53,240 --> 00:01:00,200 such as BlackRock, KKR, Goldman Sachs, Suncorp, Hestar, family offices and more comprise 12 00:01:00,200 --> 00:01:06,680 of roughly 85%, whilst the remaining 15% is wealth management investors. 13 00:01:06,680 --> 00:01:10,960 Cameron unpacks some of their investments such as they have Australia's third largest 14 00:01:10,960 --> 00:01:18,000 childcare rate, a disability housing rate, Australia's largest battery, wind farms, financing 15 00:01:18,000 --> 00:01:24,600 businesses targeting the Australian aging population, mid-tier private equity as a whole 16 00:01:24,600 --> 00:01:31,200 and we discuss whether or not nuclear energy is a viable solution for Australia. 17 00:01:31,200 --> 00:01:36,640 The institutional business has been targeting a return on investment per asset by the time 18 00:01:36,640 --> 00:01:43,980 it's sold of roughly 60% for the life of the asset, whilst the Federation Alternative Investment 19 00:01:43,980 --> 00:01:51,640 Fund too for both wholesale and retail investors has averaged 17% for the past 12 months as 20 00:01:51,640 --> 00:01:54,200 of time of recording. 21 00:01:54,200 --> 00:01:57,840 Before we get into the conversation, please remember this podcast is made for entertainment 22 00:01:57,840 --> 00:02:00,840 purposes only and not to be construed as any form of advice. 23 00:02:00,840 --> 00:02:04,720 I encourage you to listen to this glamour at the end of the rockcast and to keep your 24 00:02:04,720 --> 00:02:06,400 feedback coming. 25 00:02:06,400 --> 00:02:11,160 You can reach me at mgatty at ywm.com.au. 26 00:02:11,160 --> 00:02:15,600 So with that being said, I hope you enjoyed this conversation as much as I did. 27 00:02:15,600 --> 00:02:27,080 So sit back, relax and enjoy it. 28 00:02:27,080 --> 00:02:30,560 Cameron Brownjohn, welcome to the Rate of Change with your cloth management. 29 00:02:30,560 --> 00:02:32,120 Thanks for having me. 30 00:02:32,120 --> 00:02:36,480 Why don't we kick things off and just telling us a little bit about yourself and how you 31 00:02:36,480 --> 00:02:38,600 got into financial markets. 32 00:02:38,600 --> 00:02:39,600 Thank you. 33 00:02:39,600 --> 00:02:47,960 I'm a 47 year old father of four, wasn't always of course, graduated from university, studied 34 00:02:47,960 --> 00:02:54,500 commerce and law and took a job at one of the global investment banks. 35 00:02:54,500 --> 00:02:57,720 I was fortunate enough to work with those guys around the world. 36 00:02:57,720 --> 00:03:02,840 So I spent time with them in their New York office, in their London office, in their Hong 37 00:03:02,840 --> 00:03:07,480 Kong office and of course in their Sydney office. 38 00:03:07,480 --> 00:03:14,240 And sometime early enough in that journey, they moved me from advising clients across 39 00:03:14,240 --> 00:03:19,640 to managing the firm's balance sheet. 40 00:03:19,640 --> 00:03:26,400 I guess I got poached ultimately to join the Macquarie group, worked for some of the famous 41 00:03:26,400 --> 00:03:34,560 people there at Macquarie and in 2018 was fortunate with a group of the Macquarie team 42 00:03:34,560 --> 00:03:40,760 and I where we decided to go out and invest for other clients, not just Macquarie's balance 43 00:03:40,760 --> 00:03:45,400 sheet and hence Federation was born. 44 00:03:45,400 --> 00:03:47,560 That's fascinating. 45 00:03:47,560 --> 00:03:51,560 To run a balance sheet of a firm, look, I know we're going to get into Federation and 46 00:03:51,560 --> 00:03:57,240 private equity, all that sort of thing, but what was it like literally going from buyers 47 00:03:57,240 --> 00:04:01,000 making investments to essentially running an entire company's balance sheet from the 48 00:04:01,000 --> 00:04:02,480 get go? 49 00:04:02,480 --> 00:04:07,760 Running a section of the balance sheet. 50 00:04:07,760 --> 00:04:11,840 Oh look, it was great. 51 00:04:11,840 --> 00:04:21,320 It's nice to have reach and relevance and to put to work some of the things that you'd 52 00:04:21,320 --> 00:04:26,080 been working hard to learn in your career. 53 00:04:26,080 --> 00:04:27,600 I guess that comes with it. 54 00:04:27,600 --> 00:04:35,160 I need to be right in some of those seats, you won't be thanked for being wrong. 55 00:04:35,160 --> 00:04:37,440 I think it was excellent. 56 00:04:37,440 --> 00:04:43,720 I've enjoyed my career to date and certainly my time at Macquarie group was no different. 57 00:04:43,720 --> 00:04:47,160 The reason why I find it so fascinating is half the reason why we do these conversations 58 00:04:47,160 --> 00:04:48,880 is to get to another person. 59 00:04:48,880 --> 00:04:52,440 We're going to get into the assets and what you've been buying and why you've been buying 60 00:04:52,440 --> 00:04:58,360 it, but I just find it's so fascinating the journey about how you get there and how that 61 00:04:58,360 --> 00:04:59,880 shapes the way you think. 62 00:04:59,880 --> 00:05:06,640 So did you find that having that experience of learning essentially how to run the business 63 00:05:06,640 --> 00:05:13,080 first and then seeing, as you said, the ramifications of the decisions, the good, bad, the ugly 64 00:05:13,080 --> 00:05:18,720 and the impact that has, has that molded how you think about investing in these private 65 00:05:18,720 --> 00:05:20,840 equity businesses? 66 00:05:20,840 --> 00:05:26,880 I guess listening to your question there, sort of two things sprung to mind. 67 00:05:26,880 --> 00:05:31,160 One was don't lose money. 68 00:05:31,160 --> 00:05:36,880 And the other was just kind of this journey that you're probing at what I've enjoyed the 69 00:05:36,880 --> 00:05:39,440 most about it. 70 00:05:39,440 --> 00:05:46,540 So yes, I think investing in investment banks capital into the sorts of exactly the same 71 00:05:46,540 --> 00:05:54,400 things that Federation does, probably myself and my team have just been trained to look 72 00:05:54,400 --> 00:06:00,960 for downside protection and to try and find a way to not lose money before we turn our 73 00:06:00,960 --> 00:06:03,960 minds to how we will make money. 74 00:06:03,960 --> 00:06:10,760 So probably now wired to not be one of those teams that tries to swing for the fences and 75 00:06:10,760 --> 00:06:16,120 make 10 times our initial investment on a deal and then the next deal. 76 00:06:16,120 --> 00:06:17,720 Don't lose money. 77 00:06:17,720 --> 00:06:19,840 So we're probably not suited to venture capital. 78 00:06:19,840 --> 00:06:26,440 There are some venture capital firms that fully expect to be losing all of their capital 79 00:06:26,440 --> 00:06:31,880 on 30% of their deals, but they hope that they're really good ones make that and more 80 00:06:31,880 --> 00:06:36,600 for them back again so that as a portfolio, they can do really well. 81 00:06:36,600 --> 00:06:42,680 And they'll unashamedly tell their investors, well, if we're not losing money on a deal, 82 00:06:42,680 --> 00:06:44,400 we're not taking enough risk. 83 00:06:44,400 --> 00:06:50,120 So that's a very different way than the Federation team and I have been, I guess, through that 84 00:06:50,120 --> 00:06:51,440 journey wired to think. 85 00:06:51,440 --> 00:06:59,360 So don't lose money would be our key area that we, I guess, we start from thinking about 86 00:06:59,360 --> 00:07:03,840 and then we try and grow our capital or our client's capital from there. 87 00:07:03,840 --> 00:07:04,840 The other element- 88 00:07:04,840 --> 00:07:05,840 Sorry, go ahead. 89 00:07:05,840 --> 00:07:06,840 Go on. 90 00:07:06,840 --> 00:07:13,360 I was just going to say the other element that you're probing at with these early questions 91 00:07:13,360 --> 00:07:20,040 is kind of like my career and what was it like and what you kind of almost from a certain 92 00:07:20,040 --> 00:07:25,560 perspective, what are your most joy out of it in terms of that would have therefore shaped 93 00:07:25,560 --> 00:07:27,720 the direction of where you're headed. 94 00:07:27,720 --> 00:07:32,200 And I've thought about that question a fair bit. 95 00:07:32,200 --> 00:07:36,320 At least I've been asked variations of it in the past as well. 96 00:07:36,320 --> 00:07:46,120 And my answer is definitely I've enjoyed working with entrepreneurs or families or people that 97 00:07:46,120 --> 00:07:48,760 have built a thing. 98 00:07:48,760 --> 00:07:59,560 And I guess was always fascinated in these people that have grown a business or grown 99 00:07:59,560 --> 00:08:09,200 a portfolio of their own investments or gone out and achieved something notable in the 100 00:08:09,200 --> 00:08:11,000 business world. 101 00:08:11,000 --> 00:08:16,000 And in the seats that I've been able to sit in for people like the McCrory Group, I've 102 00:08:16,000 --> 00:08:19,800 got to spend a lot of time with these people, sort of fly around on planes and try and buy 103 00:08:19,800 --> 00:08:22,860 businesses or do something together. 104 00:08:22,860 --> 00:08:28,800 And so get to know them quite well over dinners or just traveling in taxis or whatever it 105 00:08:28,800 --> 00:08:30,840 might be. 106 00:08:30,840 --> 00:08:42,120 That probably was a key reason why in my early 40s, I left McCrory to be a founding partner 107 00:08:42,120 --> 00:08:50,480 of Federation because probably my appreciation for those people who've gone out and done 108 00:08:50,480 --> 00:08:57,080 something to grow something probably led me to also want to have a go. 109 00:08:57,080 --> 00:09:03,480 And circa 20 years, maybe a slightly under 20 years into my career at that time, it felt 110 00:09:03,480 --> 00:09:09,040 like a good time to do it because, well, firstly, I'd been working together for a long time 111 00:09:09,040 --> 00:09:13,920 with the teammates that I left to start Federation. 112 00:09:13,920 --> 00:09:18,280 So we knew that we worked together well as a team. 113 00:09:18,280 --> 00:09:26,080 I'd made some good investments and figured that others that were aware of that would 114 00:09:26,080 --> 00:09:33,800 potentially back Federation with some capital to allow us to start. 115 00:09:33,800 --> 00:09:39,000 And then also, I guess, just in terms of running these investment teams at these places, and 116 00:09:39,000 --> 00:09:44,600 ultimately, I was running McCrory Capital's principal investment team out of headquarters 117 00:09:44,600 --> 00:09:46,880 for this region. 118 00:09:46,880 --> 00:09:56,720 I guess I'd seen what not to do as well and probably have those life lessons and investment 119 00:09:56,720 --> 00:09:58,320 lessons in my mind. 120 00:09:58,320 --> 00:10:00,760 So I felt like it was a good enough time to start. 121 00:10:00,760 --> 00:10:03,080 Yeah, I couldn't agree more. 122 00:10:03,080 --> 00:10:08,440 The thing of the expression is you can teach finance, but you can't teach experience. 123 00:10:08,440 --> 00:10:10,440 That's probably right. 124 00:10:10,440 --> 00:10:18,520 So okay, so Federation, in a nutshell, for someone that's not familiar with the firm, 125 00:10:18,520 --> 00:10:21,400 what exactly do you guys and girls do? 126 00:10:21,400 --> 00:10:22,400 Thank you. 127 00:10:22,400 --> 00:10:27,680 Federation's a private capital firm based in Sydney, Australia. 128 00:10:27,680 --> 00:10:33,640 We focus on investing in businesses and assets that meet social and economic needs. 129 00:10:33,640 --> 00:10:40,680 At the moment, most everything has a nexus to Australia, although it need not necessarily 130 00:10:40,680 --> 00:10:45,960 always be so into the distant future because some of this team have experience of working 131 00:10:45,960 --> 00:10:47,520 around the world. 132 00:10:47,520 --> 00:10:54,240 We manage a little under $2 billion of client commitments, and there's 23 of us right now. 133 00:10:54,240 --> 00:11:01,320 I guess the key areas of expertise that people would know us for are threefold. 134 00:11:01,320 --> 00:11:05,200 One is mid-market private equity. 135 00:11:05,200 --> 00:11:12,200 So we have a very strong track record in mid-market private equity and over all realized exits 136 00:11:12,200 --> 00:11:14,520 that we have achieved as a team. 137 00:11:14,520 --> 00:11:19,280 So cash getting back into someone's bank account, not some spreadsheet saying that values have 138 00:11:19,280 --> 00:11:20,800 gone up. 139 00:11:20,800 --> 00:11:30,120 We've achieved 60%, 6-0% gross IRR in aggregate now into our 14th year. 140 00:11:30,120 --> 00:11:38,480 The next of the three areas that we're notable for is sustainable infrastructure. 141 00:11:38,480 --> 00:11:44,920 So we have a different team of people that own, we think, Australia's best renewable 142 00:11:44,920 --> 00:11:46,560 energy platform. 143 00:11:46,560 --> 00:11:48,520 We own one of Australia's biggest batteries. 144 00:11:48,520 --> 00:11:53,660 It's big enough to fuel Canberra, but we don't fuel Canberra with it. 145 00:11:53,660 --> 00:11:59,340 We have contracted it, fully contracted these assets, and that asset is half contracted 146 00:11:59,340 --> 00:12:04,680 to shell inflation link for over a decade, and the other half is contracted to Energy 147 00:12:04,680 --> 00:12:08,520 Australia inflation link for 10 years. 148 00:12:08,520 --> 00:12:12,300 And we've got another generation asset, again, fully contracted. 149 00:12:12,300 --> 00:12:16,240 So we've got an infrastructure team that looks for fully contracted inflation linked cash 150 00:12:16,240 --> 00:12:21,840 flows, and that team has done very well in infrastructure. 151 00:12:21,840 --> 00:12:29,120 Their track record is 23.5% gross IRR on realized performance. 152 00:12:29,120 --> 00:12:32,160 And that is in infrastructure excellent. 153 00:12:32,160 --> 00:12:36,760 And then the final area is real estate. 154 00:12:36,760 --> 00:12:42,880 Some parties consider it social infrastructure, the areas of real estate that we're investing 155 00:12:42,880 --> 00:12:43,880 in. 156 00:12:43,880 --> 00:12:50,720 I guess in short summary, we have from scratch built what is now Australia's third largest 157 00:12:50,720 --> 00:13:00,560 child care rate and probably Australia's largest NDIS rate, so these specialist disability 158 00:13:00,560 --> 00:13:04,800 accommodation rates that you read about in the paper. 159 00:13:04,800 --> 00:13:07,240 Federation would manage probably the largest. 160 00:13:07,240 --> 00:13:11,680 If not the largest, it would be the second largest, and Macquarie would have the largest 161 00:13:11,680 --> 00:13:14,440 of these things now. 162 00:13:14,440 --> 00:13:21,020 And both of those asset classes are performing incredibly well for our investors as well. 163 00:13:21,020 --> 00:13:29,320 So mid market private equity, and we also have real asset pools of capital as well, 164 00:13:29,320 --> 00:13:34,640 probably that play the same sort of thematics that we do on the private equity side, but 165 00:13:34,640 --> 00:13:38,920 just on doing it on the real asset side. 166 00:13:38,920 --> 00:13:39,920 What's the unpack there? 167 00:13:39,920 --> 00:13:40,920 And we'll get into that. 168 00:13:40,920 --> 00:13:45,960 I suppose what people just kind of want to get their head around a little bit is people 169 00:13:45,960 --> 00:13:49,600 listening to this are probably high-end family officers, incredibly wealthy people, but there's 170 00:13:49,600 --> 00:13:56,080 also a number of people there that retail investors or normal wholesale moms and dads 171 00:13:56,080 --> 00:13:57,080 are something equivalent. 172 00:13:57,080 --> 00:14:03,120 So one of the things we're discussing off air is you have an ability for different types 173 00:14:03,120 --> 00:14:06,320 of investors to access what you're doing. 174 00:14:06,320 --> 00:14:11,040 Do you want to break that down and how the mechanics of that work, please? 175 00:14:11,040 --> 00:14:13,920 And the other reason is you're saying 60%, right? 176 00:14:13,920 --> 00:14:18,360 But then when you go and look at the returns, it says something different. 177 00:14:18,360 --> 00:14:21,640 And if you could explain that, that'd be great. 178 00:14:21,640 --> 00:14:31,000 The returns in the unit price of more recent unit trust for wealth management channel, 179 00:14:31,000 --> 00:14:32,000 yes. 180 00:14:32,000 --> 00:14:42,720 So to explain, about 85% of Federation's capital comes from institutions and the remaining 181 00:14:42,720 --> 00:14:49,280 15% come from perhaps people that are listening to your podcast and others like them, generally 182 00:14:49,280 --> 00:14:54,920 speaking, the wealth management channel, people that may manage their own money, people who 183 00:14:54,920 --> 00:15:03,480 are in family offices, people whose financial advisors have decided to allocate a section 184 00:15:03,480 --> 00:15:08,440 of their portfolio into the things that Federation's doing. 185 00:15:08,440 --> 00:15:15,840 It's probably fair to say with our institutional clients, we tend to lock them in for a period 186 00:15:15,840 --> 00:15:16,840 of time. 187 00:15:16,840 --> 00:15:22,640 Most commonly across the industry, they're committed for about 10 years. 188 00:15:22,640 --> 00:15:27,200 And it is the same for the things that Federation does for our institutional clients. 189 00:15:27,200 --> 00:15:31,920 Generally speaking, these people commit to us for 10 years and we try and do a good job 190 00:15:31,920 --> 00:15:35,840 for them and at the end of the decade, give them their money back and hopefully, hopefully 191 00:15:35,840 --> 00:15:39,800 their profits with them. 192 00:15:39,800 --> 00:15:43,140 It doesn't work the same way in wealth management. 193 00:15:43,140 --> 00:15:50,920 We have in the past and certainly in our first wealth management fund, given a five-year 194 00:15:50,920 --> 00:15:55,600 version of the same thing, takes people's money, do a good job with it, but lock it 195 00:15:55,600 --> 00:16:02,440 up and not allow redemptions for five years, give the money back and hopefully the profit 196 00:16:02,440 --> 00:16:03,440 with it. 197 00:16:03,440 --> 00:16:09,040 And that's certainly the way it's looking like behaving in both of those instances today. 198 00:16:09,040 --> 00:16:16,000 But a little over a year ago, we were asked by a range of our clients to provide a liquid 199 00:16:16,000 --> 00:16:22,920 private equity solution and it's this liquid private equity solution that has been performing 200 00:16:22,920 --> 00:16:31,960 to an annualized rate of return of 17% on a mark-to-market basis, on a net basis after 201 00:16:31,960 --> 00:16:35,800 performance fees, after management fees, after costs, after everything. 202 00:16:35,800 --> 00:16:44,000 So net returns, share price, kind of equivalent related to the investor's perspective. 203 00:16:44,000 --> 00:16:48,000 But that's only been in existence for a little over a year. 204 00:16:48,000 --> 00:16:53,420 So firstly, 14 years of track record and one year of track record are different things. 205 00:16:53,420 --> 00:17:02,280 This thing has been achieving a 17% net unit holder rate of return since inception. 206 00:17:02,280 --> 00:17:15,720 And the difference to our institutional products that investors are able to access this fund 207 00:17:15,720 --> 00:17:21,320 every single month and they're able to redeem every single month. 208 00:17:21,320 --> 00:17:28,080 And we have to therefore set the unit price every single month. 209 00:17:28,080 --> 00:17:34,080 It's the team's most favorite day every month where they have to value their portfolio companies 210 00:17:34,080 --> 00:17:38,560 and our valuation committee signs off on those valuations. 211 00:17:38,560 --> 00:17:43,520 This is an independently chaired valuation committee, I might add. 212 00:17:43,520 --> 00:17:50,800 And it's that work that trickles down into the maths of what our unit price might be 213 00:17:50,800 --> 00:17:51,960 every single month. 214 00:17:51,960 --> 00:17:58,640 And we invite and permit investors to increase their allocations or for new investors to 215 00:17:58,640 --> 00:18:01,240 join at that unit price. 216 00:18:01,240 --> 00:18:10,240 And we permit people to redeem under the terms of their redemption mechanism with us every 217 00:18:10,240 --> 00:18:11,720 single month at that price. 218 00:18:11,720 --> 00:18:14,500 No fees, no costs, no drag. 219 00:18:14,500 --> 00:18:18,320 If people want to get out, they can get out at that same price that people are getting 220 00:18:18,320 --> 00:18:21,520 in as well. 221 00:18:21,520 --> 00:18:26,720 We've been asked how we manage this liquidity. 222 00:18:26,720 --> 00:18:33,000 And we can, of course, go on and explain that we've got a diversified portfolio and there's 223 00:18:33,000 --> 00:18:42,440 a natural cadence of portfolio investments rolling in and out of the portfolio over time. 224 00:18:42,440 --> 00:18:45,320 That's of course true until it is not. 225 00:18:45,320 --> 00:18:53,280 So ultimately, we need a logical end game for how we fund our redemptions. 226 00:18:53,280 --> 00:18:55,600 And in our instance, it's cash. 227 00:18:55,600 --> 00:19:01,640 And so the simplest way to think about it is that if redeemers want to redeem, they 228 00:19:01,640 --> 00:19:08,760 get the first call on the cash available in the tin before the next cool investment the 229 00:19:08,760 --> 00:19:12,320 team wants to do, I guess in short summary. 230 00:19:12,320 --> 00:19:20,760 And like other versions of this same thing, there are others that provide liquid products. 231 00:19:20,760 --> 00:19:25,260 Generally speaking, they're the global investment houses, someone like Partners Group, someone 232 00:19:25,260 --> 00:19:28,280 like Hamilton Lane, someone like Schroders. 233 00:19:28,280 --> 00:19:35,320 They all have versions of a liquidity mechanism, usually monthly or quarterly. 234 00:19:35,320 --> 00:19:36,800 In our instance, it's monthly. 235 00:19:36,800 --> 00:19:46,440 So we think best in class in the same way as others in the industry find it within private 236 00:19:46,440 --> 00:19:52,960 equity prudent to cap the level of redemptions so that you don't have a Mary Poppins style 237 00:19:52,960 --> 00:19:55,040 run on the bank. 238 00:19:55,040 --> 00:20:01,040 You need an ordinary orthodox exit of a private equity portfolio if it is that you are to 239 00:20:01,040 --> 00:20:04,800 achieve full and fair value. 240 00:20:04,800 --> 00:20:10,120 The redemption mechanism is therefore capped at 5% of NAV per quarter. 241 00:20:10,120 --> 00:20:14,800 That's not to say you can get five cents in the dollar of your money back. 242 00:20:14,800 --> 00:20:21,920 That is to say that we think less than 5% of unit holders would want to redeem any given 243 00:20:21,920 --> 00:20:22,920 quarter. 244 00:20:22,920 --> 00:20:26,720 That's certainly been the case in our history. 245 00:20:26,720 --> 00:20:28,460 I guess it's not until it is. 246 00:20:28,460 --> 00:20:38,800 And so you need some very clear guidelines as to how much the redemption capacity will 247 00:20:38,800 --> 00:20:39,800 be capped at. 248 00:20:39,800 --> 00:20:41,760 So does Partners Group, so do the others. 249 00:20:41,760 --> 00:20:48,880 And we are industry standard in providing that liquidity up to 5% of NAV per quarter. 250 00:20:48,880 --> 00:20:53,360 Not to teet your horn, but look, in all seriousness, 17% is not to be sniffed at. 251 00:20:53,360 --> 00:20:59,000 And I'm a big fan of private equity and the ability for companies you may recommend to 252 00:20:59,000 --> 00:21:04,640 high quality other firms that give access to this particular asset class. 253 00:21:04,640 --> 00:21:05,960 I think it's fantastic. 254 00:21:05,960 --> 00:21:13,400 But there's a big gap between what other people are getting returns wise to 17%. 255 00:21:13,400 --> 00:21:19,360 And I just want to make that incredibly clear because 17% isn't exactly normal in this space 256 00:21:19,360 --> 00:21:24,160 unless you're going physically directly into the asset class and you're moving all the 257 00:21:24,160 --> 00:21:25,160 middleman stuff. 258 00:21:25,160 --> 00:21:26,160 Right? 259 00:21:26,160 --> 00:21:27,160 So do you want to give a bit more clarity? 260 00:21:27,160 --> 00:21:30,160 And I think we discussed it off air, how it works. 261 00:21:30,160 --> 00:21:33,460 But do you want to give a bit of clarity on that? 262 00:21:33,460 --> 00:21:38,240 And then we'll get into the fun part, which is what actually are the assets and how you 263 00:21:38,240 --> 00:21:40,240 actually bake this cake. 264 00:21:40,240 --> 00:21:41,240 Yeah. 265 00:21:41,240 --> 00:21:42,240 Okay. 266 00:21:42,240 --> 00:21:54,040 Well, 17% is below our realized track record, and we certainly hope to continue to successfully 267 00:21:54,040 --> 00:22:00,100 build wealth prudently for our investors. 268 00:22:00,100 --> 00:22:03,800 So yeah, thank you for the, I guess, the pat on the back. 269 00:22:03,800 --> 00:22:05,920 We're pleased with how we're going. 270 00:22:05,920 --> 00:22:11,300 And we would hope that our performance will at least achieve the same level and ideally 271 00:22:11,300 --> 00:22:20,760 improve from 17% because it's below where we've sold companies and it's below the latest 272 00:22:20,760 --> 00:22:25,240 exit that we've had, which I'll speak to in a second. 273 00:22:25,240 --> 00:22:40,200 I guess when you're valuing your portfolio every month, investors will be certainly unhappy 274 00:22:40,200 --> 00:22:45,440 if I over promise and under deliver on our returns. 275 00:22:45,440 --> 00:22:56,120 And I think there is therefore probably a minor bias towards conservatism in how we 276 00:22:56,120 --> 00:22:59,360 value the underlying assets. 277 00:22:59,360 --> 00:23:05,380 I don't want that to sound like we're sandbagging the portfolio because we certainly are not. 278 00:23:05,380 --> 00:23:11,800 We are trying to find fair value every month and we are hand on heart and our valuation 279 00:23:11,800 --> 00:23:17,720 committee is hand on heart believing that these valuations that we set for each portfolio 280 00:23:17,720 --> 00:23:21,820 entity is fair. 281 00:23:21,820 --> 00:23:28,800 But if you are on the bias of conservative or aggressive side of those marks, probably 282 00:23:28,800 --> 00:23:32,360 history has shown we're on the conservative side. 283 00:23:32,360 --> 00:23:42,040 There's probably a key reason for that being consistency of valuation approach. 284 00:23:42,040 --> 00:23:47,560 So one of the way private equity firms make money is to buy well. 285 00:23:47,560 --> 00:23:52,000 Another way is to manage the company's well and another way is to exit well. 286 00:23:52,000 --> 00:23:54,280 There's a range of other things people can do. 287 00:23:54,280 --> 00:23:57,080 You can use balance sheet to buy growth. 288 00:23:57,080 --> 00:24:04,240 You can do all sorts of tricks but at its simplest, buy well, sell well and manage well 289 00:24:04,240 --> 00:24:06,920 in the interim. 290 00:24:06,920 --> 00:24:09,680 So we certainly try and do that. 291 00:24:09,680 --> 00:24:19,800 And the valuation parameters that we use entering an investment, we will stick with in how we're 292 00:24:19,800 --> 00:24:23,200 valuing a company through its life cycle. 293 00:24:23,200 --> 00:24:26,360 I'll give you a hypothetical example. 294 00:24:26,360 --> 00:24:33,680 Let's say a healthcare facilities business, hospital or hospitals company. 295 00:24:33,680 --> 00:24:38,760 We do not have one in the current portfolio but we do know a fair bit about that asset 296 00:24:38,760 --> 00:24:40,320 class. 297 00:24:40,320 --> 00:24:48,240 Let's say if we were to buy a hospitals company, we might think that a key valuation parameter 298 00:24:48,240 --> 00:24:53,640 might reference say it's EBIT or it's EBITDA. 299 00:24:53,640 --> 00:24:58,000 And so we would look at a basket of other hospitals companies, people like Ramsey and 300 00:24:58,000 --> 00:25:03,880 HealthScope and others and we would reference say where their multiples are trading. 301 00:25:03,880 --> 00:25:06,880 And let's say I'm not sure where Ramsey is at the moment. 302 00:25:06,880 --> 00:25:13,000 Let's say 12 or 14 times EBITDA and we've entered our investment at eight times EBITDA. 303 00:25:13,000 --> 00:25:19,560 So a discount to where the prevailing comparable companies are valued on the stock market. 304 00:25:19,560 --> 00:25:24,980 We would retain that discount over the life of our investment. 305 00:25:24,980 --> 00:25:32,920 So if Ramsey goes to 20 times, we may mark up our parameters that we value the earnings 306 00:25:32,920 --> 00:25:38,920 of our company for every given month, but we won't mark it to 20 times. 307 00:25:38,920 --> 00:25:41,840 We'll keep that same pro rata discount. 308 00:25:41,840 --> 00:25:49,520 And so conservatively probably marked versus bouncing it straight to haha, we've bought 309 00:25:49,520 --> 00:25:50,920 this thing wonderfully. 310 00:25:50,920 --> 00:25:54,200 It's definitely worth 14 times and we've paid eight times. 311 00:25:54,200 --> 00:25:59,720 Let's mark it straight to 14 times because who knows that that's right. 312 00:25:59,720 --> 00:26:04,680 You need evidence and time to confirm that that's right. 313 00:26:04,680 --> 00:26:09,000 And there's no rush to confirm that that's right. 314 00:26:09,000 --> 00:26:13,980 The only time the proof will be in this pudding is when you sell that asset. 315 00:26:13,980 --> 00:26:17,760 And so that's, I guess, probably why. 316 00:26:17,760 --> 00:26:28,160 One of the reasons why there is a difference in 17% and 60% of a gross realized IRR in 317 00:26:28,160 --> 00:26:34,480 what we've achieved in PE historically. 318 00:26:34,480 --> 00:26:40,480 The other obvious one occurs to me is just time period, 14 years of data versus one and 319 00:26:40,480 --> 00:26:42,200 a bit years of data. 320 00:26:42,200 --> 00:26:46,720 There's going to be some fuzziness in that there. 321 00:26:46,720 --> 00:26:52,520 Turning to sorts of investments that we're doing and maybe starting with this latest 322 00:26:52,520 --> 00:26:58,840 exit that we've had, which was a contract research organization. 323 00:26:58,840 --> 00:27:04,240 So it was a health care business, a health care services business. 324 00:27:04,240 --> 00:27:06,740 It's called George Clinical. 325 00:27:06,740 --> 00:27:14,520 We invested in this business in November of 2019 after about a four month exclusive due 326 00:27:14,520 --> 00:27:15,560 diligence period. 327 00:27:15,560 --> 00:27:24,960 So this company came to us seeking some growth capital, which was nice. 328 00:27:24,960 --> 00:27:26,560 We were approached exclusively. 329 00:27:26,560 --> 00:27:31,320 We were known by this company as someone who could help them with our knowledge of health 330 00:27:31,320 --> 00:27:37,000 care services and things that they were wanting to do with their growth of this business. 331 00:27:37,000 --> 00:27:43,920 And fortunately, in our background, we had directly been invested in a company with a 332 00:27:43,920 --> 00:27:45,760 contract research organization. 333 00:27:45,760 --> 00:27:50,320 So kind of recommended that we were good enough people to work with and that we could help 334 00:27:50,320 --> 00:27:52,560 them with the things that we're thinking about. 335 00:27:52,560 --> 00:27:55,640 So coming to us was nice. 336 00:27:55,640 --> 00:28:01,020 Doing four months of exclusivity to really get under the hood of the business was nice. 337 00:28:01,020 --> 00:28:07,760 And then ultimately investing in them was nice too. 338 00:28:07,760 --> 00:28:17,040 Through that due diligence period, we, I guess, wanted to believe the things that management 339 00:28:17,040 --> 00:28:20,680 were telling us would happen with this company. 340 00:28:20,680 --> 00:28:28,000 We wanted to believe that the growth and their business plan would manifest, but we were 341 00:28:28,000 --> 00:28:34,600 worried about a couple of the factors that they were telling us that maybe wouldn't come 342 00:28:34,600 --> 00:28:36,360 home to roost. 343 00:28:36,360 --> 00:28:41,160 And so it would be fair to say that they thought EBITDA would be here and we thought there 344 00:28:41,160 --> 00:28:44,560 was a risk that it might be slightly lower. 345 00:28:44,560 --> 00:28:50,520 So we explained to them that, look, we're willing to, we really like the business. 346 00:28:50,520 --> 00:28:53,000 We really like the shape of what they're doing. 347 00:28:53,000 --> 00:28:57,840 We really liked the evidence of what they'd all done before. 348 00:28:57,840 --> 00:29:04,120 And so we wanted to give them the money to achieve the business plan that they wanted 349 00:29:04,120 --> 00:29:11,120 to achieve and we wanted to directly plug in with our operational skills to help them 350 00:29:11,120 --> 00:29:13,200 do it. 351 00:29:13,200 --> 00:29:18,520 And we thought that that would all work, but we were worried about being edge of value 352 00:29:18,520 --> 00:29:21,880 equity at the price that they were asking for. 353 00:29:21,880 --> 00:29:24,340 And so we said, look, two things. 354 00:29:24,340 --> 00:29:30,680 We can give you money at a different price, or it would be actually our preference to 355 00:29:30,680 --> 00:29:35,440 just put our money in as a convertible note, debt, there was no debt in the company of 356 00:29:35,440 --> 00:29:37,640 any consequence. 357 00:29:37,640 --> 00:29:42,160 So put our money in as firstly in debt, first dollar out. 358 00:29:42,160 --> 00:29:46,920 But importantly, to retain this equity optionality. 359 00:29:46,920 --> 00:29:51,600 So a debt that can convert into equity, a convertible note. 360 00:29:51,600 --> 00:29:58,400 And we said being debt, and this note, by the way, was a five year convertible note 361 00:29:58,400 --> 00:30:00,360 with a four year conversion period. 362 00:30:00,360 --> 00:30:08,640 So that allowed us to be on the board, have excellent information, inside information 363 00:30:08,640 --> 00:30:14,080 on what the company was doing. 364 00:30:14,080 --> 00:30:20,440 Great transparency on all of their reporting, direct working relationship with CEO, CFO 365 00:30:20,440 --> 00:30:23,040 and their teams. 366 00:30:23,040 --> 00:30:30,240 But importantly, be debt and protected way away from the edge of value. 367 00:30:30,240 --> 00:30:37,000 Through that debt like period, we negotiated an 8% coupon. 368 00:30:37,000 --> 00:30:41,880 But we explained to the management team and they got it straight away that our investors 369 00:30:41,880 --> 00:30:45,660 are not giving us money to achieve an 8% rate of return. 370 00:30:45,660 --> 00:30:48,120 We want to believe in the equity story. 371 00:30:48,120 --> 00:30:54,520 So we were positively predisposed to converting to equity. 372 00:30:54,520 --> 00:31:03,100 So if all of the things that the management team is saying will happen, we'll of course 373 00:31:03,100 --> 00:31:04,920 convert to equity. 374 00:31:04,920 --> 00:31:09,480 And then they'll get the money that they wanted at the price that they wanted in the first 375 00:31:09,480 --> 00:31:10,560 place. 376 00:31:10,560 --> 00:31:15,200 So it's kind of like, here's the money, back yourself. 377 00:31:15,200 --> 00:31:20,120 And if all these things that you're saying are going to prove to be true, then you'll 378 00:31:20,120 --> 00:31:23,240 have like it's all the same to you because we won't be dead anymore. 379 00:31:23,240 --> 00:31:26,400 We've converted to equity at the price that you wanted. 380 00:31:26,400 --> 00:31:27,760 And you know what? 381 00:31:27,760 --> 00:31:29,080 To their great credit, they did. 382 00:31:29,080 --> 00:31:31,360 They did back themselves. 383 00:31:31,360 --> 00:31:35,200 And to their great credit, they were right and we were wrong. 384 00:31:35,200 --> 00:31:36,200 Earnings was what they like. 385 00:31:36,200 --> 00:31:43,680 We did get that and more of what we all hoped and dreamed would happen with this company. 386 00:31:43,680 --> 00:31:51,840 And on the way in, Bupa, the global healthcare investing company, sort of saw what we were 387 00:31:51,840 --> 00:31:57,160 doing and liked that and came in alongside of us. 388 00:31:57,160 --> 00:32:01,080 And I guess we were fortunate to credentialize ourselves with that. 389 00:32:01,080 --> 00:32:08,320 And it's a good evidence of this, I guess, federation-ness of what we can do with our 390 00:32:08,320 --> 00:32:11,200 client's capital. 391 00:32:11,200 --> 00:32:16,200 We commonly blend our clients, our wealth management client's capital in this instance 392 00:32:16,200 --> 00:32:22,800 with institutional capital, in this instance, Bupa came in alongside exactly the same thing 393 00:32:22,800 --> 00:32:28,200 that our wealth management clients were doing, exactly the same terms. 394 00:32:28,200 --> 00:32:30,400 So how did this business go? 395 00:32:30,400 --> 00:32:32,400 We were in it. 396 00:32:32,400 --> 00:32:40,220 We entered in November of 2019 and we exited ultimately in July of 2023. 397 00:32:40,220 --> 00:32:44,120 So we're in there a bit over three and a half years. 398 00:32:44,120 --> 00:32:52,520 And over that, I'll note those dates, 2019 to 2023, COVID happened in there. 399 00:32:52,520 --> 00:32:57,480 I've heard lots of people complain about operating performance of companies through COVID. 400 00:32:57,480 --> 00:33:00,980 Well, this one, we grew by three times. 401 00:33:00,980 --> 00:33:06,840 We grew the earnings of this company by three times, including through COVID. 402 00:33:06,840 --> 00:33:10,660 And it wasn't going that well through COVID. 403 00:33:10,660 --> 00:33:16,840 People weren't doing drug trials through COVID, but we didn't lose any contracts. 404 00:33:16,840 --> 00:33:23,760 And in fact, we gained and grew the business, at least their contract book materially through 405 00:33:23,760 --> 00:33:25,320 the period. 406 00:33:25,320 --> 00:33:32,480 And so at all of the right settings and systems and processes and cash flow management, cost 407 00:33:32,480 --> 00:33:37,840 controls, but all still the same settings for growth that you would want in a growing 408 00:33:37,840 --> 00:33:44,140 company all kept pretty integral, even through COVID. 409 00:33:44,140 --> 00:33:49,760 So it was that when it came out of COVID, which inevitably was always going to, it performed 410 00:33:49,760 --> 00:33:50,760 well. 411 00:33:50,760 --> 00:33:54,440 And earnings between our entry and exit trebled. 412 00:33:54,440 --> 00:33:56,560 Without M&A, we didn't go and buy things. 413 00:33:56,560 --> 00:34:00,640 People can go and say, my M&A is three times. 414 00:34:00,640 --> 00:34:04,900 But if you put three times as much money in, there's no scale on your equity. 415 00:34:04,900 --> 00:34:07,680 We did not have to do that. 416 00:34:07,680 --> 00:34:09,880 Three times earnings without buying it. 417 00:34:09,880 --> 00:34:14,320 Three times earnings through organic growth. 418 00:34:14,320 --> 00:34:21,640 And to my earlier point around buying well and selling well, when we exited, yes, someone 419 00:34:21,640 --> 00:34:25,520 paid a higher multiple than we did on our entry. 420 00:34:25,520 --> 00:34:33,080 And so the money multiple that we made for our investors over three and a bit years was 421 00:34:33,080 --> 00:34:35,260 4.7 times money. 422 00:34:35,260 --> 00:34:36,600 So someone gave me a million bucks. 423 00:34:36,600 --> 00:34:40,360 I gave them $4.7 million back. 424 00:34:40,360 --> 00:34:45,000 And that is an IRR of 59.8%. 425 00:34:45,000 --> 00:34:46,880 So sorry if that was a long way to go. 426 00:34:46,880 --> 00:34:49,000 No, no, no, no, I actually prefer this. 427 00:34:49,000 --> 00:34:50,440 I find this fascinating. 428 00:34:50,440 --> 00:34:52,240 So how big was the convertible note? 429 00:34:52,240 --> 00:34:55,640 I don't know if you can discuss that. 430 00:34:55,640 --> 00:34:59,000 It's of less consequences. 431 00:34:59,000 --> 00:35:02,520 The reason why I'm phrasing that question right is what was the percentage of the two 432 00:35:02,520 --> 00:35:09,400 billion because then that determines as well how it moves the needle on the other end. 433 00:35:09,400 --> 00:35:16,120 I think the way I would have you think about federations sort of hitting zone in mid-market 434 00:35:16,120 --> 00:35:21,220 private equity is kind of 20 to $50 million checks. 435 00:35:21,220 --> 00:35:27,800 And so our business is often might be, say, 200 and at the upside, maybe $500 million 436 00:35:27,800 --> 00:35:28,800 of enterprise value. 437 00:35:28,800 --> 00:35:30,200 So they're not new companies. 438 00:35:30,200 --> 00:35:32,440 They're long-term successful companies. 439 00:35:32,440 --> 00:35:37,000 And they've kind of grown into that $200 million of earnings or so. 440 00:35:37,000 --> 00:35:42,940 And probably this, sorry, $200 million of capitalized value or so. 441 00:35:42,940 --> 00:35:46,920 And it was sort of a similar consequence here. 442 00:35:46,920 --> 00:35:54,520 To answer your question strictly, convertible notes were about $30 million into this business. 443 00:35:54,520 --> 00:36:00,600 So perfectly suited for a growth equity investment. 444 00:36:00,600 --> 00:36:08,800 Importantly, with Federation, we can be more than 50% of the equity of a company. 445 00:36:08,800 --> 00:36:15,960 And we're equally happy to be less than 50% of the equity of a company as long as we have 446 00:36:15,960 --> 00:36:23,720 the key package of controls, positive or negative, depending on the circumstances that we require. 447 00:36:23,720 --> 00:36:30,000 And if we can find mechanisms for this downside protection, just like we did with that convertible 448 00:36:30,000 --> 00:36:31,640 note in this instance. 449 00:36:31,640 --> 00:36:36,040 But short answer, it was a $30 million aggregate convertible note tranche. 450 00:36:36,040 --> 00:36:39,000 I find the mechanics of how this all works fascinating. 451 00:36:39,000 --> 00:36:41,680 I'm quite familiar with it, but a lot of people aren't. 452 00:36:41,680 --> 00:36:47,120 So you have four years term on that convertible note. 453 00:36:47,120 --> 00:36:49,720 You bought in 19, sold in 23. 454 00:36:49,720 --> 00:36:52,940 When did you actually convert it to equity? 455 00:36:52,940 --> 00:36:56,520 We didn't need to convert until after the sale agreement. 456 00:36:56,520 --> 00:36:59,520 So with certainty. 457 00:36:59,520 --> 00:37:01,120 Really? 458 00:37:01,120 --> 00:37:07,000 So you can potentially organize the sale, get everyone backed in, and then decide you 459 00:37:07,000 --> 00:37:10,640 can still convert in the sale of that process. 460 00:37:10,640 --> 00:37:16,120 The amount of downside protection to do that is huge. 461 00:37:16,120 --> 00:37:22,920 Now I want to know about the other businesses that you've been buying. 462 00:37:22,920 --> 00:37:27,480 Actually one other thing, which I just wouldn't mind you explaining the universal landscape. 463 00:37:27,480 --> 00:37:31,680 What exactly, for a lot of people that are familiar with this, is Australian mid-tier 464 00:37:31,680 --> 00:37:32,680 infrastructure. 465 00:37:32,680 --> 00:37:34,140 Does it include toll roads? 466 00:37:34,140 --> 00:37:37,480 Can you go anywhere or are there some things you're like, I just don't want to participate 467 00:37:37,480 --> 00:37:40,240 in that space? 468 00:37:40,240 --> 00:37:48,600 Well we have done toll roads as a team before at Macquarie, but no, Federation is mostly 469 00:37:48,600 --> 00:37:56,560 interested at the moment in this renewable energy boom that is going on in Australia 470 00:37:56,560 --> 00:38:01,800 and other parts of the OECD. 471 00:38:01,800 --> 00:38:06,300 Some people in your program will be happy to hear that and they'll think someone's 472 00:38:06,300 --> 00:38:09,840 out there doing a good thing for the planet. 473 00:38:09,840 --> 00:38:17,280 Some people listening to your program will be climate skeptics perhaps. 474 00:38:17,280 --> 00:38:23,560 From our perspective, we aren't doing it just to make the world a better place or not. 475 00:38:23,560 --> 00:38:34,420 We're doing it because you can build things into an area of need and people will sign 476 00:38:34,420 --> 00:38:38,200 long-term inflation link contracts for you to do so. 477 00:38:38,200 --> 00:38:41,680 So we're doing it to make money for our investors. 478 00:38:41,680 --> 00:38:48,940 It's an important point to highlight to your listeners. 479 00:38:48,940 --> 00:38:52,960 We think first and foremost around how to protect our investors' capital and how to 480 00:38:52,960 --> 00:38:54,280 grow it. 481 00:38:54,280 --> 00:38:59,980 We are pleased as a team that in the areas that we play, we are doing things to help 482 00:38:59,980 --> 00:39:02,080 make the world a better place. 483 00:39:02,080 --> 00:39:06,200 The healthcare example I just spoke of, we talked around mechanics and business and return 484 00:39:06,200 --> 00:39:10,720 profiles and $4.7 million for every million dollars. 485 00:39:10,720 --> 00:39:19,040 But that business itself is one of the world-leading entities involved with renal dialysis and 486 00:39:19,040 --> 00:39:25,200 it has also non-trivial involvement in areas of cancer care. 487 00:39:25,200 --> 00:39:30,560 That's a cool thing to be involved with and help to grow. 488 00:39:30,560 --> 00:39:37,840 In renewable energy, in short summary, or in infrastructure in this country, the only 489 00:39:37,840 --> 00:39:44,520 things we've really done at the moment is we've bought into the former CSIRO, Wind Science 490 00:39:44,520 --> 00:39:46,880 Division and we're helping to grow it. 491 00:39:46,880 --> 00:39:53,960 So it previously was government, then commercialized, it then IPO'd and Federation took it private 492 00:39:53,960 --> 00:39:54,960 in 2020. 493 00:39:54,960 --> 00:40:00,000 We've grown that business material and I'm happy to talk about that if it's of interest. 494 00:40:00,000 --> 00:40:06,520 And then we also own one of Australia's biggest batteries. 495 00:40:06,520 --> 00:40:12,800 And we're doing these things because corporate Australia really likes the ability to lock 496 00:40:12,800 --> 00:40:17,960 in long-term energy purchase agreements from us. 497 00:40:17,960 --> 00:40:21,640 And we like that because others pay us, well, it's like the rent. 498 00:40:21,640 --> 00:40:27,880 It's like they rent the capacity of these things on an inflation link basis for a long 499 00:40:27,880 --> 00:40:28,880 time. 500 00:40:28,880 --> 00:40:37,600 So our most recent power purchase agreement that we signed was with Rio Tinto, an A-rated 501 00:40:37,600 --> 00:40:40,560 company, a mining company. 502 00:40:40,560 --> 00:40:45,720 And they signed that agreement with us for 25 years. 503 00:40:45,720 --> 00:40:50,080 And they did it on a 1.2 gigawatt slice of assets. 504 00:40:50,080 --> 00:40:54,000 It costs about two and a half million bucks per megawatt to build a wind farm. 505 00:40:54,000 --> 00:40:59,160 So they did that on three and a half to $4 billion asset. 506 00:40:59,160 --> 00:41:04,320 They have underwritten a three and a half to $4 billion asset for us over 25 years inflation 507 00:41:04,320 --> 00:41:05,320 length. 508 00:41:05,320 --> 00:41:06,320 That's good business. 509 00:41:06,320 --> 00:41:08,000 And we'll do that as much as we can. 510 00:41:08,000 --> 00:41:09,000 That's huge. 511 00:41:09,000 --> 00:41:20,160 Do you want to walk through how that works and give a bit of color around those assets? 512 00:41:20,160 --> 00:41:25,320 Okay, excuse me. 513 00:41:25,320 --> 00:41:34,400 So Windlab, the wind farm platform, it was formerly a listed company, as I mentioned, 514 00:41:34,400 --> 00:41:37,240 and Federation privatized them in 2020. 515 00:41:37,240 --> 00:41:47,640 And in fact, our wealth management clients capital, co-invested alongside Andrew Forrest's 516 00:41:47,640 --> 00:41:48,980 Squadron Energy. 517 00:41:48,980 --> 00:41:53,380 So we own that business with Andrew and we have since 2020. 518 00:41:53,380 --> 00:41:58,000 And I will note that they've been good partners. 519 00:41:58,000 --> 00:42:02,160 And we've invariably agreed with most everything at the board table. 520 00:42:02,160 --> 00:42:09,040 And Andrew and his team have been good to work with for the avoidance of doubt. 521 00:42:09,040 --> 00:42:14,280 So it's been a happy symbiotic relationship where we've all brought things hopefully to 522 00:42:14,280 --> 00:42:17,800 the table consistently and well. 523 00:42:17,800 --> 00:42:24,480 The business when we bought it, we just thought the listed market was pricing it improperly. 524 00:42:24,480 --> 00:42:28,080 Kind of the listed market didn't get it. 525 00:42:28,080 --> 00:42:32,760 And there's a number of instances where history will show that to be true. 526 00:42:32,760 --> 00:42:36,260 And this one is another one of them. 527 00:42:36,260 --> 00:42:41,840 So when we bought it, it had assets and operations in Australia and the United States and some 528 00:42:41,840 --> 00:42:45,220 countries in sub-Saharan Africa. 529 00:42:45,220 --> 00:42:50,800 And we're kind of working through it, the management team and said, if you haven't noticed, 530 00:42:50,800 --> 00:42:58,640 there's $150 billion worth of deployment in the next little while in Australia because 531 00:42:58,640 --> 00:43:05,480 the coal-fired power stations are becoming too old and they are being switched off because 532 00:43:05,480 --> 00:43:09,280 they are uneconomic and they're breaking down. 533 00:43:09,280 --> 00:43:14,440 And their shareholders are no longer making money or as much money as they need to out 534 00:43:14,440 --> 00:43:16,240 of these things. 535 00:43:16,240 --> 00:43:20,040 And this capacity is being replaced by renewable energy. 536 00:43:20,040 --> 00:43:22,040 It's not a matter of whether it should be or not. 537 00:43:22,040 --> 00:43:24,760 It is being replaced by renewable energy. 538 00:43:24,760 --> 00:43:27,000 Why don't you just focus at home? 539 00:43:27,000 --> 00:43:28,440 There's so much to do. 540 00:43:28,440 --> 00:43:33,120 Don't be distracted with these little things you're trying to do in America and these other 541 00:43:33,120 --> 00:43:36,720 random countries in Africa. 542 00:43:36,720 --> 00:43:39,800 And they said, you know what, fair enough. 543 00:43:39,800 --> 00:43:45,340 And so we sold out of the international assets. 544 00:43:45,340 --> 00:43:52,520 And to my earlier point of the listed market not pricing Windlab properly, well, the random 545 00:43:52,520 --> 00:43:59,200 non-core international assets, we sold them for more than our entry price in Windlab in 546 00:43:59,200 --> 00:44:01,080 a year or so. 547 00:44:01,080 --> 00:44:06,620 So within a year or so, we had got all of our money back from our initial investment 548 00:44:06,620 --> 00:44:13,800 and then some, and we've created Australia's biggest and best Windlab or Windfarm platform 549 00:44:13,800 --> 00:44:18,640 for less than three. 550 00:44:18,640 --> 00:44:30,140 And we've then materially grown it, I don't know, by a factor of five or more times the 551 00:44:30,140 --> 00:44:33,340 development size of its book. 552 00:44:33,340 --> 00:44:39,720 And along the way, probably solved a couple of problems in there that we inherited. 553 00:44:39,720 --> 00:44:43,960 So a couple of things when we were buying in were multiple years late. 554 00:44:43,960 --> 00:44:48,240 Well, one of the reasons the management team, I guess, wanted to work with us is that we've 555 00:44:48,240 --> 00:44:52,360 got some skills to bring to bear into that sector too. 556 00:44:52,360 --> 00:45:00,200 We fixed those problems and those assets are now humming along at nameplate capacity and 557 00:45:00,200 --> 00:45:03,000 working properly. 558 00:45:03,000 --> 00:45:08,900 So Windlab so far has been a happy investment. 559 00:45:08,900 --> 00:45:10,160 We continue to hold it. 560 00:45:10,160 --> 00:45:12,800 We haven't exited it. 561 00:45:12,800 --> 00:45:17,000 I'm not sure that we have plans to exit it. 562 00:45:17,000 --> 00:45:23,080 Obviously, you would always be mindful to sell it at the right price at any given time. 563 00:45:23,080 --> 00:45:30,120 But if I had my preference, we would be in Windlab for a while longer yet because this 564 00:45:30,120 --> 00:45:40,280 renewable energy wave is only really starting. 565 00:45:40,280 --> 00:45:44,440 So that's one example. 566 00:45:44,440 --> 00:45:48,560 Maybe I can give you more if you want or we can follow you. 567 00:45:48,560 --> 00:45:51,040 No, I just want to look. 568 00:45:51,040 --> 00:45:54,440 The beautiful thing about this conversation is you just, you know, it's like an onion, 569 00:45:54,440 --> 00:45:56,080 you pull back one layer and you just keep going. 570 00:45:56,080 --> 00:45:57,080 What's left? 571 00:45:57,080 --> 00:45:58,080 Go on tangents. 572 00:45:58,080 --> 00:46:00,840 Well, my brain's running over here. 573 00:46:00,840 --> 00:46:05,160 I do have one question for you since you're in this renewable energy space. 574 00:46:05,160 --> 00:46:10,600 What is Australia's, as you're saying, you're investing in assets that essentially Australia 575 00:46:10,600 --> 00:46:13,040 is backing and hence they're paying you for it, which is fantastic. 576 00:46:13,040 --> 00:46:18,240 But I've had a number of very interesting conversations regarding what's happening with 577 00:46:18,240 --> 00:46:23,840 uranium nuclear power, these smaller reactors that are half a football field. 578 00:46:23,840 --> 00:46:35,120 Is there a place for nuclear powered power stations generating very clean energy in Australia? 579 00:46:35,120 --> 00:46:39,160 Is that even in conversation? 580 00:46:39,160 --> 00:46:43,000 If it wasn't conversation, would you look at that as a class or is that currently, you 581 00:46:43,000 --> 00:46:49,080 know, a no-no because people just still remember Fukushima and Chernobyl and they just can't 582 00:46:49,080 --> 00:46:50,200 get their head around it. 583 00:46:50,200 --> 00:46:51,360 What's happening in that space? 584 00:46:51,360 --> 00:46:56,200 It sounds like that's the solution to most answers and the UK is putting in how many? 585 00:46:56,200 --> 00:46:59,360 Yeah, thank you. 586 00:46:59,360 --> 00:47:02,040 Gee whiz, politicised topic. 587 00:47:02,040 --> 00:47:08,480 Half of your listeners will like what I'm about to say and half of them will hate it. 588 00:47:08,480 --> 00:47:16,240 I'll try and not express it, my answer, from a political perspective, but just sort of 589 00:47:16,240 --> 00:47:22,800 focus on the realities of and the pragmatics of what we're trying to do. 590 00:47:22,800 --> 00:47:33,900 I guess in very short summary, nuclear on a levelised cost of energy basis is more expensive 591 00:47:33,900 --> 00:47:39,240 than renewable energy sources. 592 00:47:39,240 --> 00:47:50,120 Nuclear has a range of tail topics that need to be thought about not just by a company, 593 00:47:50,120 --> 00:47:56,760 but by a country, like how you deal with waste, etc. 594 00:47:56,760 --> 00:48:07,120 And you will be able to live in the community with a wind farm if it doesn't go the way 595 00:48:07,120 --> 00:48:08,900 you think it will. 596 00:48:08,900 --> 00:48:11,960 Nuclear won't if that happens in nuclear. 597 00:48:11,960 --> 00:48:15,680 So it's not even difficult to say that nuclear is more dangerous. 598 00:48:15,680 --> 00:48:18,720 The tail risks with them are profound. 599 00:48:18,720 --> 00:48:29,920 If it is that nuclear becomes an investable asset class in this country, I think it will 600 00:48:29,920 --> 00:48:34,480 be a very long way away. 601 00:48:34,480 --> 00:48:41,820 And if it becomes an asset class at all in this country, I think it should certainly 602 00:48:41,820 --> 00:48:49,140 be the preserve of government, not the private sector for a protracted period of time. 603 00:48:49,140 --> 00:48:58,160 Because the private sector is driven by other motivations, like making money for their clients. 604 00:48:58,160 --> 00:49:03,820 And I certainly don't want to be living or having my family live near a nuclear power 605 00:49:03,820 --> 00:49:10,960 plant if profit motive was one of the key topics. 606 00:49:10,960 --> 00:49:22,760 So yeah, more costly, not as effective and dangerous. 607 00:49:22,760 --> 00:49:29,620 Now a lot of the world have nuclear power stations. 608 00:49:29,620 --> 00:49:36,240 And so that's obvious that a lot of these other markets are bringing them to bear or 609 00:49:36,240 --> 00:49:38,720 have them to bear. 610 00:49:38,720 --> 00:49:44,240 And nuclear has been around for nearly a century. 611 00:49:44,240 --> 00:49:53,080 And so hopefully some of the ills of the past have been learned from. 612 00:49:53,080 --> 00:50:00,400 So I can see why there is a debate at national level for these things. 613 00:50:00,400 --> 00:50:08,360 I will make the point that Australia has got an enormous geographic landmass. 614 00:50:08,360 --> 00:50:10,040 England doesn't. 615 00:50:10,040 --> 00:50:20,360 So just because England's looking to find a fuel solution that fits them, by the way, 616 00:50:20,360 --> 00:50:26,480 England had a nuclear power industry for a very, very, very long time. 617 00:50:26,480 --> 00:50:32,600 So it's potentially more obvious for them to think of bolt-on solutions to it than we 618 00:50:32,600 --> 00:50:33,600 do. 619 00:50:33,600 --> 00:50:40,440 Because, yeah, we've probably got an ability to consider nuclear, but we don't have an 620 00:50:40,440 --> 00:50:43,600 entrenched industry like they do. 621 00:50:43,600 --> 00:50:45,840 But England doesn't have as much land as we do. 622 00:50:45,840 --> 00:50:47,360 We've got heaps of land. 623 00:50:47,360 --> 00:50:56,600 And so the relative efficiencies of one industry to the other and then the background and legacy 624 00:50:56,600 --> 00:51:03,440 way that the grid has been fueled in these countries should also be considered when the 625 00:51:03,440 --> 00:51:08,240 debate turns to just because they're doing it, we should do it too. 626 00:51:08,240 --> 00:51:13,000 So that would be my view on nuclear. 627 00:51:13,000 --> 00:51:19,720 And probably it isn't an active topic for Federation to be talking about because we 628 00:51:19,720 --> 00:51:27,280 cannot in any realistic timeline, even if it was going to be the next greatest thing 629 00:51:27,280 --> 00:51:32,640 since sliced bread, deploy our client's capital into it. 630 00:51:32,640 --> 00:51:37,880 And we certainly wouldn't be the first to invest into the sector. 631 00:51:37,880 --> 00:51:46,640 And so this is a topic for very distant future, I suspect, in this country, pragmatically. 632 00:51:46,640 --> 00:51:48,800 No, it makes sense. 633 00:51:48,800 --> 00:51:52,400 Just trying to get an idea of what you will and what you won't do. 634 00:51:52,400 --> 00:51:56,720 But it's also a very interesting topic on what's happening around the world. 635 00:51:56,720 --> 00:51:59,440 And you're mentioning renewable fuel sources. 636 00:51:59,440 --> 00:52:03,200 And my thoughts on this, and yes, it's politicized, is essentially there's a game being played 637 00:52:03,200 --> 00:52:04,200 at a very large level. 638 00:52:04,200 --> 00:52:05,200 Yes, sometimes it's cash. 639 00:52:05,200 --> 00:52:06,200 Sometimes it's power. 640 00:52:06,200 --> 00:52:08,800 Sometimes it's leverage. 641 00:52:08,800 --> 00:52:15,440 But when you have one country or four countries that control the gas supply and the oil supply 642 00:52:15,440 --> 00:52:20,440 of a very large portion of the world and others don't, well, if you want to survive and a 643 00:52:20,440 --> 00:52:24,240 war comes, it hasn't been one for a very long time, like a global one. 644 00:52:24,240 --> 00:52:31,120 You need to wean yourself off particular resources and make yourself self-sufficient. 645 00:52:31,120 --> 00:52:32,840 Not necessarily a problem Australia has. 646 00:52:32,840 --> 00:52:37,120 I was just curious, considering you're looking at it not from a politicized lens, but from 647 00:52:37,120 --> 00:52:41,680 a business side, as what will make us money and what is Australia backing? 648 00:52:41,680 --> 00:52:43,360 I was just very curious. 649 00:52:43,360 --> 00:52:47,800 And I appreciate your thoughts on that matter. 650 00:52:47,800 --> 00:52:49,360 What asset haven't we discussed? 651 00:52:49,360 --> 00:52:50,800 Here's a better question. 652 00:52:50,800 --> 00:52:56,600 Since you've just sold an asset, is there anything you're looking at now? 653 00:52:56,600 --> 00:52:59,560 What catches your eye in Opportunity Land? 654 00:52:59,560 --> 00:53:00,560 Yeah. 655 00:53:00,560 --> 00:53:01,560 Yep. 656 00:53:01,560 --> 00:53:06,320 The team's pretty frazzled. 657 00:53:06,320 --> 00:53:09,000 We worked pretty hard even through the Christmas break. 658 00:53:09,000 --> 00:53:13,960 And often investment teams might get a bit of a break through Christmas, but it wasn't 659 00:53:13,960 --> 00:53:16,920 us for us this time around, unfortunately. 660 00:53:16,920 --> 00:53:26,400 So yeah, the team's running pretty hard at some of the things in front of us. 661 00:53:26,400 --> 00:53:31,800 I would think we would be known as having skills in some of the sectors we've touched 662 00:53:31,800 --> 00:53:36,880 on today, but there are other ones that we would be known for having skills in. 663 00:53:36,880 --> 00:53:40,120 One of them is in financing businesses. 664 00:53:40,120 --> 00:53:51,940 And we really like the idea of applying financing now to the aging population thematic. 665 00:53:51,940 --> 00:54:00,680 We like the idea of businesses that allow retirement age Australians to access the latent 666 00:54:00,680 --> 00:54:03,160 equity value in their home. 667 00:54:03,160 --> 00:54:11,760 There's been a finite range of these products historically done in this market. 668 00:54:11,760 --> 00:54:19,280 Things like reverse mortgages or things like Bendigo and Adelaide Bank's equity release 669 00:54:19,280 --> 00:54:26,800 business, Home Safe, which takes upside in people's homes, basically buys a bit of the 670 00:54:26,800 --> 00:54:32,020 future sale proceeds in them. 671 00:54:32,020 --> 00:54:33,300 We like that sector. 672 00:54:33,300 --> 00:54:37,560 We did that sector when we were at Macquarie and we think there's profound opportunities 673 00:54:37,560 --> 00:54:41,960 to grow that sector in this country. 674 00:54:41,960 --> 00:54:47,480 Australia relative to Canada, for example, we're well behind them in what we do there. 675 00:54:47,480 --> 00:54:50,440 Australia relative to England, they've got their nuclear power industry. 676 00:54:50,440 --> 00:54:59,640 They've also got a far bigger senior financing industry than we do here. 677 00:54:59,640 --> 00:55:06,720 We like that area and we think that it's a direct area of service to a growing need with 678 00:55:06,720 --> 00:55:10,760 aging population and we think we can do it well. 679 00:55:10,760 --> 00:55:19,520 We've been in and around that space looking at all of the various ways to play it and 680 00:55:19,520 --> 00:55:24,320 that would be, I think, at the right time and right terms and right price, something 681 00:55:24,320 --> 00:55:29,540 that I think we'd be very interested to do. 682 00:55:29,540 --> 00:55:36,960 We continue to grow what we're doing for our clients in real estate as well. 683 00:55:36,960 --> 00:55:42,480 From scratch, we've built now Australia's third largest childcare rate and largest, 684 00:55:42,480 --> 00:55:48,480 I guess, home builder for people with disability and the NDIS pays the rent there. 685 00:55:48,480 --> 00:55:55,120 Both of those things are resilient through an economic cycle. 686 00:55:55,120 --> 00:55:58,400 We mentioned COVID earlier. 687 00:55:58,400 --> 00:56:02,760 Both of our rates got all of their rent on time and on budget through COVID. 688 00:56:02,760 --> 00:56:06,880 No discounts, no delays. 689 00:56:06,880 --> 00:56:15,140 That's not many people can say that and that's a good and rigid way that we can stand in 690 00:56:15,140 --> 00:56:22,880 front of our investors and say, look, the growth trajectory of these things are good 691 00:56:22,880 --> 00:56:27,320 and they're robust and they can weather the storm. 692 00:56:27,320 --> 00:56:31,680 But on the childcare one, one of the other firms that I'm familiar with, they had a big 693 00:56:31,680 --> 00:56:32,680 problem in New York. 694 00:56:32,680 --> 00:56:35,000 I think they're the largest childcare in New York. 695 00:56:35,000 --> 00:56:39,240 New York got shut down and it was to the point it was actually during COVID, it was their 696 00:56:39,240 --> 00:56:44,200 main asset that had its head knocked off and they had to reach in their pockets, refund 697 00:56:44,200 --> 00:56:46,160 it, boost it all up. 698 00:56:46,160 --> 00:56:47,640 Now it's looking fine now. 699 00:56:47,640 --> 00:56:51,260 But I just find that very interesting that that happened in New York and you're saying 700 00:56:51,260 --> 00:56:54,200 that you're the largest in Australia. 701 00:56:54,200 --> 00:56:55,200 Australia's fine. 702 00:56:55,200 --> 00:56:56,200 New York had its head knocked off. 703 00:56:56,200 --> 00:56:58,200 What was the main difference? 704 00:56:58,200 --> 00:57:01,200 Third largest, we're the third largest. 705 00:57:01,200 --> 00:57:02,200 Sorry, third largest. 706 00:57:02,200 --> 00:57:03,200 Apologies. 707 00:57:03,200 --> 00:57:07,240 The two bigger ones are listed. 708 00:57:07,240 --> 00:57:16,560 There are a number of differences between the two markets, including the way that you're 709 00:57:16,560 --> 00:57:17,560 paid. 710 00:57:17,560 --> 00:57:24,480 So there's a degree of bipartisan governmental support for childcare, women in the workforce 711 00:57:24,480 --> 00:57:28,720 kind of thematic in this country. 712 00:57:28,720 --> 00:57:32,000 That's not necessarily true for other parts of the world. 713 00:57:32,000 --> 00:57:38,240 And then just in the instance of COVID, the ability for people to leave their apartment 714 00:57:38,240 --> 00:57:44,880 in New York versus and access services like childcare was different to experiences in 715 00:57:44,880 --> 00:57:48,600 our market. 716 00:57:48,600 --> 00:57:59,000 In any event, we are one step protected from this risk of whether kids will turn up or 717 00:57:59,000 --> 00:58:00,000 not. 718 00:58:00,000 --> 00:58:07,560 We're the operator, as your reference in New York might have been. 719 00:58:07,560 --> 00:58:11,040 So we don't teach the kids how to count and feed them macaroni. 720 00:58:11,040 --> 00:58:15,400 We're just the landlord and the operator pays us the rent. 721 00:58:15,400 --> 00:58:22,880 So they're taking the first line of attack from whether 100 or 50 kids turn up on any 722 00:58:22,880 --> 00:58:23,880 given day. 723 00:58:23,880 --> 00:58:24,880 I don't care. 724 00:58:24,880 --> 00:58:26,880 They're going to pay us the rent. 725 00:58:26,880 --> 00:58:33,600 And the rent is backstopped by bank guarantees. 726 00:58:33,600 --> 00:58:38,360 And those bank guarantees invariably are cash collateralized. 727 00:58:38,360 --> 00:58:46,360 And this is a key reason why we want to be working with the big and good care groups. 728 00:58:46,360 --> 00:58:53,920 So the major childcare brands that you would see in the market, not the mom and dad shops 729 00:58:53,920 --> 00:58:59,960 who might have gone bankrupt if it was that we forced them to keep paying the rent. 730 00:58:59,960 --> 00:59:04,400 The big companies that we were dealing with, look, that's why we wanted to deal with them. 731 00:59:04,400 --> 00:59:08,520 They have the financial resources to weather that storm. 732 00:59:08,520 --> 00:59:12,600 So why should we weather it for them was really the policy that we took. 733 00:59:12,600 --> 00:59:18,920 Look, they explained probably some of our shortcomings to us around that policy, but 734 00:59:18,920 --> 00:59:20,920 they missed most of them. 735 00:59:20,920 --> 00:59:28,720 And they missed most of our shortcomings, but they paid the rent and they had to because 736 00:59:28,720 --> 00:59:31,640 that was what they said they'd do. 737 00:59:31,640 --> 00:59:34,080 So that's probably a key difference. 738 00:59:34,080 --> 00:59:39,840 And so both of those real estate investment trusts are doing well for our investors. 739 00:59:39,840 --> 00:59:46,600 Blackrock is our major investor in what we're doing in childcare. 740 00:59:46,600 --> 00:59:52,400 They like it because they think it's a cheap version of the two bigger listed ones. 741 00:59:52,400 --> 00:59:55,160 And they like that we're growing faster than those listed ones. 742 00:59:55,160 --> 00:59:59,520 So hopefully if we keep going the way we're going, we'll catch up to those guys. 743 00:59:59,520 --> 01:00:07,640 And Blackrock think it's great that they can access alongside our wealth management clients 744 01:00:07,640 --> 01:00:12,600 while the same sort of thing that they can through an arena, but cheaper. 745 01:00:12,600 --> 01:00:20,960 And similarly on our disability housing rate, KKR have recently signed on as an investor. 746 01:00:20,960 --> 01:00:24,240 Goldman Sachs was an investor before them. 747 01:00:24,240 --> 01:00:30,240 Hestar Suncorp, some of the major foundations and families in this country and our wealth 748 01:00:30,240 --> 01:00:34,200 management clients are invested in that. 749 01:00:34,200 --> 01:00:39,660 So I guess two data points again of people listening to your program and their ability 750 01:00:39,660 --> 01:00:49,000 to access assets alongside in parallel, no fees on fees, same pro rata rights as the 751 01:00:49,000 --> 01:00:51,280 world's biggest and best institutions. 752 01:00:51,280 --> 01:00:55,040 Yeah, no, it's pretty interesting. 753 01:00:55,040 --> 01:00:58,800 I could keep going this all day, just conscious of time. 754 01:00:58,800 --> 01:01:02,440 One question I love finishing on is, what keeps you up at night and what gets you out 755 01:01:02,440 --> 01:01:05,440 of bed in the morning? 756 01:01:05,440 --> 01:01:14,960 Yeah, I think we think a lot about maintaining our settings and our footings and where we're 757 01:01:14,960 --> 01:01:20,480 going as a business for our clients. 758 01:01:20,480 --> 01:01:28,800 And at a business where I guess we've been blessed to be provided a little under $2 billion 759 01:01:28,800 --> 01:01:34,240 of client money to date, that's more money than my personal balance sheet. 760 01:01:34,240 --> 01:01:35,440 That's a lot of money. 761 01:01:35,440 --> 01:01:42,840 But in the world of asset management, in the sectors that we're playing in, it means that 762 01:01:42,840 --> 01:01:48,520 we're up and out of the ground and we're profitable, but we're at the stage where we need to be 763 01:01:48,520 --> 01:01:51,800 a shark that keeps swimming to survive. 764 01:01:51,800 --> 01:02:02,160 So continuing ability to find ideas and do good things prudently for clients, we think 765 01:02:02,160 --> 01:02:05,560 heavily about. 766 01:02:05,560 --> 01:02:12,360 The other thing with these firms, you're only as good as your people. 767 01:02:12,360 --> 01:02:19,760 And so we think really heavily about making sure that we're an employer of choice and 768 01:02:19,760 --> 01:02:23,560 a place where people are heard and valued. 769 01:02:23,560 --> 01:02:31,920 We really try and have a culture that's got a flat structure and kind of a sense of we're 770 01:02:31,920 --> 01:02:37,200 all in it for the right reasons and pulling in the same direction. 771 01:02:37,200 --> 01:02:44,480 And I would give us a relatively high score out of 10 on how we think about both of those 772 01:02:44,480 --> 01:02:45,480 things. 773 01:02:45,480 --> 01:02:47,720 We try and be thoughtful as a business. 774 01:02:47,720 --> 01:02:53,840 In terms of things we're worried about from an investment perspective, if that's where 775 01:02:53,840 --> 01:02:58,160 your question was coming from, I think where we're- 776 01:02:58,160 --> 01:03:02,080 It could just be kids, mate. 777 01:03:02,080 --> 01:03:04,960 It could just be not sleeping. 778 01:03:04,960 --> 01:03:07,040 I think about my kids all the time. 779 01:03:07,040 --> 01:03:10,840 My children are 17, 15, 13 and 11. 780 01:03:10,840 --> 01:03:18,040 I have two boys and two girls and they're all different people and they all have different 781 01:03:18,040 --> 01:03:22,040 interests and different things they're into. 782 01:03:22,040 --> 01:03:27,440 The 15-year-old girls going through things that 15-year-old girls go through and all 783 01:03:27,440 --> 01:03:29,200 sorts of things. 784 01:03:29,200 --> 01:03:38,040 So that's a topic for another day but they're all good people and I love them dearly. 785 01:03:38,040 --> 01:03:39,920 Fantastic. 786 01:03:39,920 --> 01:03:46,760 If anyone wants to learn more about Federation, how can they find you or reach out? 787 01:03:46,760 --> 01:03:53,800 So the Federation website is FederationAM.com. 788 01:03:53,800 --> 01:04:03,080 We would certainly welcome the opportunity to meet with those of interest and if we can 789 01:04:03,080 --> 01:04:04,640 be helpful, please do reach out. 790 01:04:04,640 --> 01:04:07,800 There's contact details available through the website. 791 01:04:07,800 --> 01:04:12,840 Cameron, I really enjoyed this conversation and I appreciate you giving me a lot more 792 01:04:12,840 --> 01:04:14,640 insight into what you're doing in private equity land. 793 01:04:14,640 --> 01:04:16,280 I really appreciate it. 794 01:04:16,280 --> 01:04:17,280 My great pleasure. 795 01:04:17,280 --> 01:04:21,520 Thanks for spending time with me today and have a good rest of your day. 796 01:04:21,520 --> 01:04:22,520 Take it easy. 797 01:04:22,520 --> 01:04:23,520 See you, Cameron. 798 01:04:23,520 --> 01:04:24,520 Bye.