WEBVTT 00:00:09.960 --> 00:00:12.500 Welcome back to The Rated Change with York Wealth 00:00:12.500 --> 00:00:15.060 Management. As advisors to some of the wealthiest 00:00:15.060 --> 00:00:17.039 families in the country, The Rated Change is 00:00:17.039 --> 00:00:19.140 a podcast designed to help you in the pursuit 00:00:19.140 --> 00:00:21.519 of building long -term wealth through the insights 00:00:21.519 --> 00:00:23.420 of some of the brightest minds in asset management. 00:00:23.879 --> 00:00:26.600 I'm your host, Murdoch Gaddy, and in today's 00:00:26.600 --> 00:00:29.140 broadcast, we're joined by Ryan Bass, founder 00:00:29.140 --> 00:00:32.399 and managing director of PanGen Capital. Ryan 00:00:32.399 --> 00:00:34.759 brings deep experience from the institutional 00:00:34.759 --> 00:00:38.520 investment world, having spent 16 years at UniSuper. 00:00:39.310 --> 00:00:42.789 where he oversaw more than $8 billion in property 00:00:42.789 --> 00:00:46.829 transactions across direct real estate, unlisted 00:00:46.829 --> 00:00:50.109 property funds, and listed A REITs. Earlier in 00:00:50.109 --> 00:00:52.969 his career, he also helped establish MCS Property, 00:00:53.189 --> 00:00:55.750 one of Australia's original syndicators, and 00:00:55.750 --> 00:01:00.689 was one of the founding six behind iSelect before 00:01:00.689 --> 00:01:04.939 choosing to focus on funds management and institutional 00:01:04.939 --> 00:01:07.420 real estate. Could you imagine being one of the 00:01:07.420 --> 00:01:10.859 founders that I select? It's massive. At the 00:01:10.859 --> 00:01:14.719 rate of change, I must say we love conversations 00:01:14.719 --> 00:01:18.079 with entrepreneurs who have operated at the highest 00:01:18.079 --> 00:01:20.939 level and are now stepping out to solve a real 00:01:20.939 --> 00:01:23.700 problem they've seen up close. Ryan's new venture, 00:01:23.799 --> 00:01:27.299 Pangean Capital, is doing just that. After decades 00:01:27.299 --> 00:01:31.099 inside a major super fund, he observed a key 00:01:31.099 --> 00:01:34.730 issue. Some of the best performing, most stable 00:01:34.730 --> 00:01:37.290 property assets in the country like core shopping 00:01:37.290 --> 00:01:41.510 centers, CBD office towers, and logistics hubs 00:01:41.510 --> 00:01:45.269 are largely inaccessible to wholesale investors. 00:01:45.750 --> 00:01:48.709 These institutional grade opportunities are typically 00:01:48.709 --> 00:01:54.069 locked behind $10 million minimums, strict mandates, 00:01:54.370 --> 00:01:59.890 and a relationship -based entry. Through Pangen's 00:01:59.890 --> 00:02:02.870 new fund of funds, the Pangen Australian Real 00:02:02.870 --> 00:02:07.129 Estate Fund, P -A -R -E -F, Ryan is now making 00:02:07.129 --> 00:02:11.310 those opportunities available to wholesale investors. 00:02:12.689 --> 00:02:16.669 The fund will target returns of 8 % to 10 % per 00:02:16.669 --> 00:02:19.729 annum, exposure to diversified unlisted property 00:02:19.729 --> 00:02:23.650 funds managed by some managers such as DEXIS, 00:02:23.710 --> 00:02:27.669 GPT, Charter Hall and Lendlease. and a structure 00:02:27.669 --> 00:02:31.090 designed for monthly unit pricing and quarterly 00:02:31.090 --> 00:02:34.729 income. Paref aims to deliver quality, stable, 00:02:34.789 --> 00:02:37.449 and long -term performance with the flexibility 00:02:37.449 --> 00:02:40.389 to expand across other high -caliber managers 00:02:40.389 --> 00:02:43.349 as opportunities arise. This is about bringing 00:02:43.349 --> 00:02:45.370 institutional -grade real estate to investors 00:02:45.370 --> 00:02:48.629 who have historically been unable to access it, 00:02:48.689 --> 00:02:52.840 which I quite like. In this conversation, please 00:02:52.840 --> 00:02:56.020 join us as Ryan breaks down how the strategy 00:02:56.020 --> 00:02:59.280 works, why now is such an attractive time in 00:02:59.280 --> 00:03:01.900 the real estate cycle and how his fund is positioned 00:03:01.900 --> 00:03:04.659 to benefit from the repricing in property markets, 00:03:05.159 --> 00:03:08.740 good old -fashioned surging population and tightening 00:03:08.740 --> 00:03:11.719 supply of premium commercial assets. We also 00:03:11.719 --> 00:03:13.780 touch on the fund's mechanics, risk management, 00:03:13.900 --> 00:03:16.620 the importance of manager independence and... 00:03:16.960 --> 00:03:19.740 what Ryan learned deploying Kappa at the massive 00:03:19.740 --> 00:03:24.719 scale he did inside Unisuper. So before we get 00:03:24.719 --> 00:03:27.039 into the conversation, please remember this broadcast 00:03:27.039 --> 00:03:30.139 is made for entertainment purposes only. I encourage 00:03:30.139 --> 00:03:32.439 you to listen to the disclaimer at the end of 00:03:32.439 --> 00:03:35.439 the broadcast and keep your feedback coming. 00:03:35.840 --> 00:03:41.819 You can reach me at mgatty at ywm .com .au. If 00:03:41.819 --> 00:03:43.560 you have any questions about the podcast, you 00:03:43.560 --> 00:03:44.939 want to learn more, any of the guests that we've 00:03:44.939 --> 00:03:49.479 had on or how, They may best work with your investment 00:03:49.479 --> 00:03:52.379 policy. Please give me a call and York Wealth 00:03:52.379 --> 00:03:55.539 Management will happily work with you solving 00:03:55.539 --> 00:03:58.759 those problems. With that being said, I hope 00:03:58.759 --> 00:04:00.819 you enjoy this conversation as much as I did. 00:04:00.939 --> 00:04:15.400 So sit back, relax, and enjoy. Ryan Bass from 00:04:15.400 --> 00:04:19.600 Panjan. Welcome to The Rate of Change with York 00:04:19.600 --> 00:04:23.000 Orth Management. Thank you, and it's great to 00:04:23.000 --> 00:04:25.459 be here. Thanks, Murdoch. Great to have you on. 00:04:25.540 --> 00:04:29.519 I'm really glad a mutual colleague suggested 00:04:29.519 --> 00:04:31.740 to have a chat with you. I find what you're doing 00:04:31.740 --> 00:04:33.439 and your background really quite interesting. 00:04:33.800 --> 00:04:36.240 So why don't we kick things off like we always 00:04:36.240 --> 00:04:40.439 do and tell us a little bit about who is Ryan 00:04:40.439 --> 00:04:44.839 Bass and how you got into finance? Thank you, 00:04:44.839 --> 00:04:49.379 Murdoch. And it's an interesting journey. As 00:04:49.379 --> 00:04:52.879 a kid, I always thought I would get into IT. 00:04:53.079 --> 00:05:00.220 I was very much in that space. However, I got 00:05:00.220 --> 00:05:03.519 an opportunity to do... essentially computer 00:05:03.519 --> 00:05:07.240 science and law when I was at uni. And when I 00:05:07.240 --> 00:05:11.160 was at uni, I met and started working for a fellow 00:05:11.160 --> 00:05:14.860 called Julius Coleman, who was one of the founders 00:05:14.860 --> 00:05:18.600 of MCS Property, which was one of the original 00:05:18.600 --> 00:05:21.300 and largest property syndicators in the country. 00:05:21.439 --> 00:05:25.019 So he had a legal background, but he started 00:05:25.019 --> 00:05:28.600 essentially buying shopping centers for people 00:05:28.600 --> 00:05:31.620 to invest in. He'd buy a few shopping centers, 00:05:31.779 --> 00:05:35.600 put a fund together. It was extraordinarily successful 00:05:35.600 --> 00:05:38.500 because he essentially bought well and he looked 00:05:38.500 --> 00:05:41.860 after the investors and he looked after the assets 00:05:41.860 --> 00:05:46.459 really well. And that grew to be one of the largest 00:05:46.459 --> 00:05:48.180 property syndicators. This was probably in the 00:05:48.180 --> 00:05:53.019 90s. So I sort of did my articles and then moved 00:05:53.019 --> 00:05:57.279 straight into property funds management. I was 00:05:57.279 --> 00:06:00.860 very much more a numbers person. my sort of IT 00:06:00.860 --> 00:06:03.759 background, but the legal background was very 00:06:03.759 --> 00:06:09.439 useful as well. So when I moved into MCF property, 00:06:09.620 --> 00:06:13.680 we worked on a range of different, we did acquisitions. 00:06:13.680 --> 00:06:18.339 It was a big team. We did some M &A activity. 00:06:20.870 --> 00:06:23.870 and fundraising, a whole range of activities. 00:06:24.089 --> 00:06:27.050 At the time, we were also working on essentially 00:06:27.050 --> 00:06:31.290 a fund of funds called the Direct Property Fund. 00:06:31.350 --> 00:06:33.550 There was a whole range of syndicates, and this 00:06:33.550 --> 00:06:38.230 fund would sit on top and invest into the underlying 00:06:38.230 --> 00:06:42.149 syndicates. And then when there was a listed 00:06:42.149 --> 00:06:45.129 company, basically MCS's largest competitor, 00:06:45.329 --> 00:06:51.300 Centro, basically acquired MCS in 2003. So I 00:06:51.300 --> 00:06:54.019 moved over and I became the fund manager of that 00:06:54.019 --> 00:06:57.120 fund of funds, the Centro Direct Property Fund, 00:06:57.240 --> 00:07:01.120 which grew to be a $2 billion fund of funds invested 00:07:01.120 --> 00:07:04.360 across all their syndicates. And we targeted 00:07:04.360 --> 00:07:07.920 financial planners and family offices, instos, 00:07:07.980 --> 00:07:11.620 et cetera. And it was also on the list on the 00:07:11.620 --> 00:07:14.300 platforms like the NetWealth and the Hubs. And 00:07:14.300 --> 00:07:17.220 in those days, the Macquarie route the BT wraps, 00:07:17.399 --> 00:07:21.959 those sort of larger groups. So I then moved 00:07:21.959 --> 00:07:27.920 to Unisuper in 2008. And I guess from there, 00:07:28.000 --> 00:07:32.579 and I was joined as a senior member of the investment 00:07:32.579 --> 00:07:37.899 team in the property space. And from there, we... 00:07:40.009 --> 00:07:42.810 Firstly, it was an incredible transition to move 00:07:42.810 --> 00:07:45.970 from essentially mainly in shopping centres and 00:07:45.970 --> 00:07:49.149 the smaller end of town to really sort of the 00:07:49.149 --> 00:07:53.350 big institutional capital. I mean, UniSuper now 00:07:53.350 --> 00:07:56.810 is a $150 billion fund. It was about $25 billion 00:07:56.810 --> 00:08:00.490 when I joined. And we're involved across all 00:08:00.490 --> 00:08:04.389 sectors, office, retail, industrial. We invested 00:08:04.389 --> 00:08:08.149 in direct properties. We developed direct properties. 00:08:08.230 --> 00:08:11.319 We invested in these. institutional grade unlisted 00:08:11.319 --> 00:08:16.100 funds and also A -REITs. I was an active A -REIT 00:08:16.100 --> 00:08:18.939 manager for the last 10 years of my 16 years 00:08:18.939 --> 00:08:23.980 at UniSuper. So there's a quick... I guess, snapshot 00:08:23.980 --> 00:08:27.540 of my career. I think it's probably worth mentioning 00:08:27.540 --> 00:08:31.060 when I was at Unisuper, I was involved in or 00:08:31.060 --> 00:08:34.899 managed over $8 billion of equity transactions. 00:08:35.340 --> 00:08:40.360 So that's buying assets, selling assets, investing 00:08:40.360 --> 00:08:45.259 into funds, and also through the A -REITs, listed 00:08:45.259 --> 00:08:51.179 property as well. Yes. So that's fun. Let's unpack 00:08:51.179 --> 00:08:54.970 there. Like I was saying, I love guys and girls 00:08:54.970 --> 00:08:59.330 that come on that have not a straight path into 00:08:59.330 --> 00:09:03.110 finance. Isn't it interesting how you do tech, 00:09:03.190 --> 00:09:06.019 you do law? And then you're like, oh, that may 00:09:06.019 --> 00:09:07.700 have been a waste of time. You fast forward all 00:09:07.700 --> 00:09:09.960 the way to today and tech is so freaking important. 00:09:10.179 --> 00:09:12.340 And then when it comes down to contracts, if 00:09:12.340 --> 00:09:15.460 anyone's out there studying law and go, I want 00:09:15.460 --> 00:09:17.679 to become a lawyer, consider essentially financial 00:09:17.679 --> 00:09:20.120 services because it's just contract heavy, isn't 00:09:20.120 --> 00:09:22.379 it? Everything's a deal. Everything's a contract. 00:09:22.679 --> 00:09:25.340 Everything's the fine print. And then the efficiencies 00:09:25.340 --> 00:09:28.200 of IT, it's amazing how they both work hand in 00:09:28.200 --> 00:09:31.389 hand, isn't it? Have you found that? Yeah, no, 00:09:31.450 --> 00:09:35.450 absolutely. And I think my sort of IT and data 00:09:35.450 --> 00:09:38.230 background, actually, I've got a bit of an entrepreneurial 00:09:38.230 --> 00:09:41.980 background. I was one of the founding... founders 00:09:41.980 --> 00:09:46.960 of iSelect back in the... Sorry, you buried the 00:09:46.960 --> 00:09:49.259 lead there. You were one of the founders of iSelect? 00:09:49.799 --> 00:09:55.179 Yeah. So essentially in the late 90s, I got together 00:09:55.179 --> 00:09:58.200 with a group of people to, you know, workshop 00:09:58.200 --> 00:10:00.860 some ideas. And, you know, it was the tech boom 00:10:00.860 --> 00:10:04.259 at the time. And we basically came up with that 00:10:04.259 --> 00:10:09.220 product, with that company. I didn't stay there 00:10:09.220 --> 00:10:11.299 too long because I was focused on my property 00:10:11.299 --> 00:10:15.919 fund sort of career. But, yeah, I was one of 00:10:15.919 --> 00:10:18.360 the – I think it was one of the original six 00:10:18.360 --> 00:10:22.039 who went off. And as we know, Damien Waller, 00:10:22.139 --> 00:10:26.759 he ended up sort of running that company and 00:10:26.759 --> 00:10:30.860 did very well out of it from his part. So, yeah, 00:10:30.899 --> 00:10:32.759 I've got a bit of an entrepreneurial sort of 00:10:32.759 --> 00:10:35.200 background and I do enjoy a bit of tech. But 00:10:35.200 --> 00:10:39.850 to answer your question, I think I – IT and law 00:10:39.850 --> 00:10:43.190 and having a good sort of, I've been very sort 00:10:43.190 --> 00:10:46.350 of quantitative as well. I think they're sort 00:10:46.350 --> 00:10:54.169 of good combinations for investing in any space 00:10:54.169 --> 00:10:57.850 because you can use that legal and IT or that 00:10:57.850 --> 00:11:00.389 sort of data background to essentially assist 00:11:00.389 --> 00:11:03.250 you with your investment decision processes and 00:11:03.250 --> 00:11:06.340 your thinking. Yeah, brilliant. We'll get on 00:11:06.340 --> 00:11:07.860 to Pangean Capital, what you're doing now for 00:11:07.860 --> 00:11:11.779 a sec. I want to lean into this a bit more. So 00:11:11.779 --> 00:11:15.500 you mentioned, so you hit the private side with 00:11:15.500 --> 00:11:17.840 all the shopping centers doing the private transactions, 00:11:18.039 --> 00:11:20.059 which I would guess you had a little bit more 00:11:20.059 --> 00:11:24.700 leniency because smaller group of people. What's 00:11:24.700 --> 00:11:27.539 it like? I've never actually had a great conversation 00:11:27.539 --> 00:11:29.600 with someone that's actually, you know, been 00:11:29.600 --> 00:11:32.460 able to choose the investments we go into the 00:11:32.460 --> 00:11:35.460 major super funds on the property side. Like, 00:11:35.460 --> 00:11:39.940 how does that process work? I suppose what I'm 00:11:39.940 --> 00:11:42.399 getting at, is it substantially more regulated? 00:11:42.600 --> 00:11:46.059 Is there the criteria a lot more difficult or 00:11:46.059 --> 00:11:48.929 are you finding that you're... The group has 00:11:48.929 --> 00:11:52.190 a relied upon number of groups, I don't know, 00:11:52.230 --> 00:11:54.549 CBRE or someone of the equivalent where you get 00:11:54.549 --> 00:11:56.590 constant deal flow through and it's more like 00:11:56.590 --> 00:11:58.470 you can only deal with these particular people 00:11:58.470 --> 00:12:01.409 or you must lend seven or eight times to someone 00:12:01.409 --> 00:12:03.250 to get a track record as people before you can 00:12:03.250 --> 00:12:06.710 sit up the equity piece. Because a lot of people 00:12:06.710 --> 00:12:08.509 that listen to this podcast, we've had a lot 00:12:08.509 --> 00:12:10.230 of great people for private credit or property 00:12:10.230 --> 00:12:12.889 on. before it's probably listening people listening 00:12:12.889 --> 00:12:14.509 to this going you know we would love to have 00:12:14.509 --> 00:12:16.529 a crack at you know getting into the you know 00:12:16.529 --> 00:12:19.009 the ilks of uh you know uni super but what's 00:12:19.009 --> 00:12:21.909 what's the process like how do you consider a 00:12:21.909 --> 00:12:23.830 deal like how you know how does someone present 00:12:23.830 --> 00:12:26.009 a transaction because that's for me that's just 00:12:26.009 --> 00:12:27.429 mind -boggling because what you what you ran 00:12:27.429 --> 00:12:29.649 eight billion dollars you oversaw eight billion 00:12:29.649 --> 00:12:31.649 dollars worth of acquisitions of transactions 00:12:31.649 --> 00:12:37.080 that's huge Yeah, I think that's a really good 00:12:37.080 --> 00:12:40.860 question. And when I started at Unisuper, there 00:12:40.860 --> 00:12:43.379 was just basically two of us in the property 00:12:43.379 --> 00:12:45.360 team. There was obviously a larger investment 00:12:45.360 --> 00:12:49.679 team. And we would rely heavily on existing relationships 00:12:49.679 --> 00:12:53.860 and managers. But essentially, we would see hundreds 00:12:53.860 --> 00:12:58.700 of deals come across our desk every year. And 00:12:58.700 --> 00:13:03.700 I guess you sort of get a feel for the type of 00:13:03.700 --> 00:13:05.820 deal. that you're looking for and the type of 00:13:05.820 --> 00:13:11.700 structures that you're looking for. And generally, 00:13:11.860 --> 00:13:17.200 that would be our sort of experience and our 00:13:17.200 --> 00:13:21.379 relationships with managers. And I think Unisuper 00:13:21.379 --> 00:13:25.559 had a pretty interesting structure from its property. 00:13:26.009 --> 00:13:29.830 side as well. We had a mandate with a group, 00:13:29.929 --> 00:13:32.730 AMP Capital, and they would run their direct, 00:13:32.870 --> 00:13:37.289 they would run the direct assets. So often there 00:13:37.289 --> 00:13:40.750 would be... deals that would come up and we would 00:13:40.750 --> 00:13:43.909 ask the AMP capital transactions team to essentially 00:13:43.909 --> 00:13:46.350 run the numbers or do all the due diligence on 00:13:46.350 --> 00:13:48.350 the direct deals. But occasionally there were 00:13:48.350 --> 00:13:50.750 a lot of, you know, funds deals that we would 00:13:50.750 --> 00:13:52.649 look at as well and investment funds. And that 00:13:52.649 --> 00:13:55.649 was our sort of expertise or speciality in assessing 00:13:55.649 --> 00:13:59.509 various funds. And essentially we had filters. 00:14:00.190 --> 00:14:04.549 Is it the right, does it have the right assets 00:14:04.549 --> 00:14:07.210 that we want to target, the right quality assets? 00:14:07.289 --> 00:14:09.570 Is it in the right? right type of structure that 00:14:09.570 --> 00:14:12.929 we're happy with, that gives us as the investor 00:14:12.929 --> 00:14:18.669 the right sort of controls? And also, is it the 00:14:18.669 --> 00:14:23.309 right manager? So in some ways, it's a fairly, 00:14:23.389 --> 00:14:26.809 I guess, simple philosophy, getting the right 00:14:26.809 --> 00:14:29.230 assets in the right structure with the right 00:14:29.230 --> 00:14:34.049 manager. So hearing that, your background's predominantly 00:14:34.049 --> 00:14:37.100 been... Less on, you know, finding out whether 00:14:37.100 --> 00:14:39.580 or not you want to specifically purchase a shopping 00:14:39.580 --> 00:14:42.320 center or specifically purchase, you know, one 00:14:42.320 --> 00:14:45.279 particular office building or, you know, an industrial 00:14:45.279 --> 00:14:47.559 complex, right? So not specifically a transaction. 00:14:47.679 --> 00:14:50.940 You're saying that your main many years of experience 00:14:50.940 --> 00:14:55.000 has been on assessing the acquisition of fund 00:14:55.000 --> 00:14:57.259 managers to essentially capture a basket in a 00:14:57.259 --> 00:15:00.700 particular property and a subcategory, you know, 00:15:00.700 --> 00:15:02.980 asset class. Is that what you're saying? Like 00:15:02.980 --> 00:15:05.860 the $8 billion which you oversaw, was that purchasing 00:15:05.860 --> 00:15:08.559 fund of funds or were you physically going out 00:15:08.559 --> 00:15:10.799 and buying, you know, a new Woolworths goes in 00:15:10.799 --> 00:15:12.139 and you're looking at that large development 00:15:12.139 --> 00:15:14.659 or, you know, the new airports going in in Sydney, 00:15:14.799 --> 00:15:16.519 you know, you're looking at essentially purchasing 00:15:16.519 --> 00:15:19.759 that and then managing that or the Sunshine Airport, 00:15:19.940 --> 00:15:20.840 you know what I mean? I'm just trying to get 00:15:20.840 --> 00:15:24.080 an idea of that. I think it was a combination 00:15:24.080 --> 00:15:27.679 of those. I mean, with direct deals, we would 00:15:27.679 --> 00:15:32.710 tend to, I guess, vet the deals. initially. And 00:15:32.710 --> 00:15:34.970 if there was interest, then we might sort of 00:15:34.970 --> 00:15:37.649 use our managers, like at the time our direct 00:15:37.649 --> 00:15:41.029 manager was IMP Capital, or we'd use other managers 00:15:41.029 --> 00:15:43.649 to essentially do the heavy lifting in terms 00:15:43.649 --> 00:15:48.509 of the due diligence and legal and negotiations. 00:15:49.190 --> 00:15:51.590 However, you know, we'd always sort of sit at 00:15:51.590 --> 00:15:53.830 the top and, you know, make sure that the deal 00:15:53.830 --> 00:15:57.179 sort of worked for our members. nice like uh 00:15:57.179 --> 00:15:59.759 see when i was at a university like yourself 00:15:59.759 --> 00:16:01.340 i did a bachelor of design and computing thought 00:16:01.340 --> 00:16:03.179 it was a waste of time that's why i'm laughing 00:16:03.179 --> 00:16:04.919 about it just saying how funny you do a degree 00:16:04.919 --> 00:16:06.320 and then you fast forward and it's just pretty 00:16:06.320 --> 00:16:08.980 much everything's tech right but um i was in 00:16:08.980 --> 00:16:10.700 the architecture facility and the funniest thing 00:16:10.700 --> 00:16:13.019 about architecture is you know you look back 00:16:13.019 --> 00:16:15.080 in your career with all my friends there's always 00:16:15.080 --> 00:16:17.320 one building or one deal that someone's done 00:16:17.320 --> 00:16:19.399 you can you go i did that you know when you're 00:16:19.399 --> 00:16:21.259 telling your kids your grandkids so from your 00:16:21.259 --> 00:16:24.639 days at uni super you know what what deal um 00:16:25.360 --> 00:16:28.179 what property essentially, what got built that 00:16:28.179 --> 00:16:31.139 you go, you know, that was awesome. What was 00:16:31.139 --> 00:16:37.139 your favorite? Wow. There's a lot to think about 00:16:37.139 --> 00:16:42.519 there. Probably one of the most interesting deals 00:16:42.519 --> 00:16:47.639 that really occurred over probably the better 00:16:47.639 --> 00:16:53.570 part of a decade was Unisuper. co -owned Caranup 00:16:53.570 --> 00:16:57.169 Shopping Centre with Westfield, with Westfield 00:16:57.169 --> 00:16:59.009 Group. That's, you know, one of the biggest shopping 00:16:59.009 --> 00:17:03.269 centres in Perth. And ultimately, it ended up 00:17:03.269 --> 00:17:06.349 that, and that shopping centre was managed by 00:17:06.349 --> 00:17:10.250 AMP Capital. And ultimately, Westfield wanted 00:17:10.250 --> 00:17:19.039 a management role. In the end, that... That property, 00:17:19.180 --> 00:17:22.940 in order to work out the structure of the ownership 00:17:22.940 --> 00:17:24.859 structure, it ended up going to the High Court 00:17:24.859 --> 00:17:29.819 and essentially Unisuper sort of won that case 00:17:29.819 --> 00:17:33.279 and then essentially bought out the Westfield 00:17:33.279 --> 00:17:37.059 stake. And then from there, it was able to... 00:17:37.790 --> 00:17:40.589 I think it was an $800 million or $900 million 00:17:40.589 --> 00:17:45.230 development for that asset, which I would say 00:17:45.230 --> 00:17:47.990 now is without doubt the best shopping centre 00:17:47.990 --> 00:17:50.990 in Perth by a country mile. It's kind of the 00:17:50.990 --> 00:17:55.289 Chadston of Perth, so to speak, and it's an absolutely 00:17:55.289 --> 00:18:00.660 brilliant asset. So I think that was a... pretty 00:18:00.660 --> 00:18:06.119 amazing deal that we did for, that Unisuper property 00:18:06.119 --> 00:18:09.200 team did for its members. That's pretty cool. 00:18:09.299 --> 00:18:11.759 We went to the high court and then ended up doing 00:18:11.759 --> 00:18:15.819 an $800 million development. Love it. I love 00:18:15.819 --> 00:18:21.440 it. So Pangean Capital, when did it begin? Who's 00:18:21.440 --> 00:18:24.039 Pangean Capital? What's the philosophy behind 00:18:24.039 --> 00:18:26.299 it? What are you trying to achieve? What's happening 00:18:26.299 --> 00:18:29.960 with Pangean Capital? Sure. So I guess when I 00:18:29.960 --> 00:18:35.019 moved to Unisuper, I was blown away by the quality 00:18:35.019 --> 00:18:40.160 of assets that a big institution like Unisuper 00:18:40.160 --> 00:18:44.140 can get access to. And compared to what smaller 00:18:44.140 --> 00:18:47.740 investors, I presume like yourself and I, can 00:18:47.740 --> 00:18:51.799 get access to, incredibly different type of quality 00:18:51.799 --> 00:18:58.920 type structures. One of the areas that Unisoup 00:18:58.920 --> 00:19:01.640 and a lot of these big institutions invest in 00:19:01.640 --> 00:19:06.460 is called the unlisted property funds. They're 00:19:06.460 --> 00:19:09.359 institutional grade unlisted property funds run 00:19:09.359 --> 00:19:13.079 by managers such as Charter Hall and Dexus and 00:19:13.079 --> 00:19:17.880 GPT, Lend Lease, ISPT. And these funds have been 00:19:17.880 --> 00:19:21.740 operating for decades. They own, honestly, some 00:19:21.740 --> 00:19:24.759 of the best... commercial property that you can 00:19:24.759 --> 00:19:27.000 buy in Australia because they've amassed these 00:19:27.000 --> 00:19:29.920 portfolios over decades they've curated them 00:19:29.920 --> 00:19:34.019 they've developed them and these funds are simply 00:19:34.019 --> 00:19:36.460 not available to small investors because typically 00:19:36.460 --> 00:19:39.680 you need 10 million dollars or more to get into 00:19:39.680 --> 00:19:44.279 them and I always thought well why can't small 00:19:44.279 --> 00:19:47.819 investors get access to these incredible funds 00:19:47.819 --> 00:19:53.769 and To my knowledge, this is not really available 00:19:53.769 --> 00:19:57.029 to small investors. So essentially, and this 00:19:57.029 --> 00:19:59.849 is something I've been thinking about for many 00:19:59.849 --> 00:20:03.789 years. And that's why when I started PanGen, 00:20:03.829 --> 00:20:08.670 I wanted to almost like democratize these incredible 00:20:08.670 --> 00:20:12.549 funds by creating a fund of funds that allows 00:20:12.549 --> 00:20:16.549 smaller investors access to these institutional 00:20:16.549 --> 00:20:19.640 grade property funds. For people not familiar 00:20:19.640 --> 00:20:21.559 with a fund of funds, what is a fund of funds? 00:20:22.180 --> 00:20:24.720 It's a pretty simple structure in the sense that 00:20:24.720 --> 00:20:30.339 it's a fund that aggregates or pulls capital 00:20:30.339 --> 00:20:34.920 from investors to then invest into other funds. 00:20:35.420 --> 00:20:40.539 And in this case, our fund invests in these institutional 00:20:40.539 --> 00:20:45.259 grade funds that... collectively own almost $100 00:20:45.259 --> 00:20:48.440 billion of prime -grade commercial property, 00:20:48.559 --> 00:20:52.180 that's shopping centers, great logistics assets, 00:20:52.299 --> 00:20:55.579 and office buildings. And there's about $60 or 00:20:55.579 --> 00:20:57.900 $70 billion of equity in these funds. They've 00:20:57.900 --> 00:21:01.380 been, as I said, operating for decades, and traditional 00:21:01.380 --> 00:21:04.460 investors have been the groups like Unisuper 00:21:04.460 --> 00:21:07.930 of the world. What's the ticket size to get into 00:21:07.930 --> 00:21:12.410 these? Typically $10 million, but it's not just 00:21:12.410 --> 00:21:18.880 the ticket size. These funds... You need to go 00:21:18.880 --> 00:21:21.240 through fairly strict criteria to ensure that 00:21:21.240 --> 00:21:26.099 they maintain their, I guess, there's a number 00:21:26.099 --> 00:21:28.940 of technical reasons, but their qualified status 00:21:28.940 --> 00:21:34.859 for the investors. So there's a few sort of... 00:21:36.410 --> 00:21:39.930 I guess, hurdles. And it's not just a big ticket 00:21:39.930 --> 00:21:43.430 size to get into them. So that's what I was trying 00:21:43.430 --> 00:21:45.630 to work out. So everyone knows we use NetWealth. 00:21:45.670 --> 00:21:48.250 Some of our friends use Mason Stevens, Premium, 00:21:48.490 --> 00:21:52.569 other very Hub24 good platforms. And they do 00:21:52.569 --> 00:21:56.349 have a lot of access to high -grade property 00:21:56.349 --> 00:22:01.029 portfolios. But some families have got $10, $20, 00:22:01.029 --> 00:22:04.490 $30 million essentially sitting there. with some 00:22:04.490 --> 00:22:06.430 of these funds or $100 million, right? So if 00:22:06.430 --> 00:22:08.029 you've got $100 million in an account, you're 00:22:08.029 --> 00:22:09.490 an ultra high net worth, you know, Australian 00:22:09.490 --> 00:22:11.549 investor, you know, the question they're probably 00:22:11.549 --> 00:22:13.529 asking is, well, I've got $10 million, you know, 00:22:13.549 --> 00:22:17.029 why can't I buy net wealth? And net wealth is 00:22:17.029 --> 00:22:19.509 an institution, you know, the money's held under 00:22:19.509 --> 00:22:22.720 custody. um you know why can't and look it's 00:22:22.720 --> 00:22:24.759 just i'm just essentially you know asking the 00:22:24.759 --> 00:22:26.900 question that everyone's asking right is yeah 00:22:26.900 --> 00:22:29.660 yeah why can't i access you know these these 00:22:29.660 --> 00:22:31.880 transactions are you saying that based on the 00:22:31.880 --> 00:22:34.359 criteria they actually just physically can't 00:22:34.359 --> 00:22:37.380 or like what what is some what is the what is 00:22:37.380 --> 00:22:39.240 the opportunity is this like literally like a 00:22:39.240 --> 00:22:44.140 boys club as in you can't get in unless or if 00:22:44.140 --> 00:22:45.740 you have the money and you're an institution 00:22:45.740 --> 00:22:48.140 you can And there's a workaround. That's what 00:22:48.140 --> 00:22:50.400 I'm trying to understand. I think it's about 00:22:50.400 --> 00:22:54.980 not just the check size and also complying with 00:22:54.980 --> 00:22:58.460 the entry criteria of these funds, but it's also 00:22:58.460 --> 00:23:02.420 understanding how they operate as well. You can't 00:23:02.420 --> 00:23:04.579 just simply go in and out of the funds. You've 00:23:04.579 --> 00:23:07.039 got to understand how the liquidity mechanisms 00:23:07.039 --> 00:23:10.759 work. Some of these funds have preemptives in 00:23:10.759 --> 00:23:13.039 terms of when they're raising equity or if you 00:23:13.039 --> 00:23:18.630 want to sell units. And yeah, so I think it's 00:23:18.630 --> 00:23:21.950 not just the ability to get into these funds, 00:23:22.029 --> 00:23:24.329 but it's the ability to understand how they operate. 00:23:24.609 --> 00:23:28.069 And as I said, they're not simply ATMs. You can't 00:23:28.069 --> 00:23:31.190 get in or out very easily. You've got to understand 00:23:31.190 --> 00:23:33.849 how the liquidity mechanisms work as well. So 00:23:33.849 --> 00:23:38.450 it doesn't suit a lot of investors who aren't 00:23:38.450 --> 00:23:41.349 institutions or understand how these funds operate. 00:23:42.250 --> 00:23:48.170 Right. Okay, so that's on that side. But why 00:23:48.170 --> 00:23:51.289 don't we just discuss the actual opportunity 00:23:51.289 --> 00:23:55.930 here. So the fund itself is the Panjan Australian 00:23:55.930 --> 00:24:00.869 Real Estate Fund, P -A -R -E -F. Parif, yeah. 00:24:00.990 --> 00:24:05.849 Parif. Parif. So can we just unpack? the fund 00:24:05.849 --> 00:24:07.890 how it's structured the mechanics of because 00:24:07.890 --> 00:24:10.569 you're mentioning you know the actual underlying 00:24:10.569 --> 00:24:12.210 allocation which you're going to make is a whole 00:24:12.210 --> 00:24:14.930 bunch of restrictions but you know what are the 00:24:14.930 --> 00:24:17.130 duration restrictions the target returns like 00:24:17.130 --> 00:24:19.829 what are the mechanics of this fund no absolutely 00:24:19.829 --> 00:24:23.990 so the investment strategy of the fund is to 00:24:23.990 --> 00:24:27.210 invest in these these underlying real estate 00:24:27.210 --> 00:24:30.349 funds that are essentially core real estate funds 00:24:30.349 --> 00:24:34.099 what does core mean that means established income 00:24:34.099 --> 00:24:36.980 producing prime grade real estate with limited 00:24:36.980 --> 00:24:41.059 development okay so you're not taking a lot of 00:24:41.059 --> 00:24:43.559 development risk. You're buying assets such as 00:24:43.559 --> 00:24:47.859 Gateway in Sydney. Let's say that's the DEXA's 00:24:47.859 --> 00:24:50.180 fund. You're buying potentially High Point Shopping 00:24:50.180 --> 00:24:52.339 Centre in Melbourne. You're buying some really 00:24:52.339 --> 00:24:55.440 prime logistics assets. And as I said, with limited 00:24:55.440 --> 00:24:58.039 development, there's always a bit of development 00:24:58.039 --> 00:25:03.740 in these funds. So our fund essentially offers... 00:25:03.740 --> 00:25:08.789 And the underlying funds are really... They've 00:25:08.789 --> 00:25:12.130 got very high governance levels and low gearing. 00:25:12.230 --> 00:25:16.410 High governance means that, you know, there's 00:25:16.410 --> 00:25:19.589 really good alignment between the investors and 00:25:19.589 --> 00:25:22.589 the managers. There's a really good transparency. 00:25:23.170 --> 00:25:26.720 So investors can get... really good access to 00:25:26.720 --> 00:25:29.839 the information and to the fund managers of these 00:25:29.839 --> 00:25:34.740 funds. And pricing, part of the governance is 00:25:34.740 --> 00:25:37.819 the pricing of these funds. Many of the funds 00:25:37.819 --> 00:25:41.400 are actually pricing the underlying assets. They 00:25:41.400 --> 00:25:44.859 get a full valuation very frequently. Some of 00:25:44.859 --> 00:25:49.079 them even value the entire portfolio every quarter 00:25:49.079 --> 00:25:53.900 externally, which gives investors a lot of comfort 00:25:53.900 --> 00:25:57.740 that the price is sound. These funds also tend 00:25:57.740 --> 00:26:01.799 to price monthly. So essentially, our fund will 00:26:01.799 --> 00:26:05.619 take the pricing of the underlying funds on a 00:26:05.619 --> 00:26:10.259 monthly basis and our fund will be priced on 00:26:10.259 --> 00:26:13.400 a monthly basis. Generally, the underlying funds 00:26:13.400 --> 00:26:15.420 pay quarterly distribution, so we'll be paying 00:26:15.420 --> 00:26:19.480 quarterly distributions as well. And there'll 00:26:19.480 --> 00:26:22.380 be a sort of reinvestment ability as well into 00:26:22.380 --> 00:26:28.539 our fund. And the... Yeah, so I think that's 00:26:28.539 --> 00:26:31.359 kind of at a high level sort of how these work. 00:26:31.539 --> 00:26:34.359 Now, in terms of how we construct the portfolio, 00:26:34.640 --> 00:26:37.819 we essentially like our fund to be diversified 00:26:37.819 --> 00:26:43.559 across the main three food groups of retail, 00:26:43.819 --> 00:26:48.740 industrial and office and across a number of 00:26:48.740 --> 00:26:51.039 managers. So we're getting good diversification 00:26:51.039 --> 00:26:56.740 by properties and by managers and sectors. What's 00:26:56.740 --> 00:27:00.859 the performance been on these funds and what 00:27:00.859 --> 00:27:05.859 are you targeting? So our target return is a 00:27:05.859 --> 00:27:10.319 total return of 8 % to 10 % over the medium to 00:27:10.319 --> 00:27:15.859 long term. And why we came up with that sort 00:27:15.859 --> 00:27:19.160 of target return essentially starts with how 00:27:19.160 --> 00:27:22.319 the underlying properties are valued, the sort 00:27:22.319 --> 00:27:26.849 of the expectation of... what the properties 00:27:26.849 --> 00:27:30.950 will deliver on an ungeared basis. And then that's 00:27:30.950 --> 00:27:33.849 basically the income with a bit of rental growth. 00:27:34.069 --> 00:27:36.789 There could be some development upside or some 00:27:36.789 --> 00:27:41.750 refurbishment upside. So that creates an ungeared 00:27:41.750 --> 00:27:45.430 return. These funds are conservatively geared. 00:27:45.529 --> 00:27:48.750 So our model portfolio targets probably 20 % 00:27:48.750 --> 00:27:52.750 to 25 % gearing. So that adds a little bit of 00:27:52.750 --> 00:27:55.970 return on top of that, less the fees of the underlying 00:27:55.970 --> 00:28:00.150 funds. And our fees comes to a target return. 00:28:00.269 --> 00:28:03.910 We would have 8 % to 10%. What are your fees 00:28:03.910 --> 00:28:08.680 on it and what are their fees? Okay. Our fees 00:28:08.680 --> 00:28:14.779 are 60 .6 % of NAV plus costs. And then there's 00:28:14.779 --> 00:28:20.140 a performance fee of essentially 15 % above a 00:28:20.140 --> 00:28:24.559 fixed 9 % return hurdle. So we believe that the 00:28:24.559 --> 00:28:29.559 fee structure in our fund is highly competitive 00:28:29.559 --> 00:28:34.089 in the marketplace. We also... The underlying 00:28:34.089 --> 00:28:36.390 funds, because they're massive institutional 00:28:36.390 --> 00:28:40.490 funds and obviously institutional investors are 00:28:40.490 --> 00:28:43.670 very fee sensitive, you know, the underlying 00:28:43.670 --> 00:28:47.789 fees are, let's say, circa around sort of 60 00:28:47.789 --> 00:28:51.029 basis points on an average basis. So when you 00:28:51.029 --> 00:28:53.789 layer up our fees and their fees, it's probably 00:28:53.789 --> 00:28:58.809 around 1 .3, which, and I think the key difference 00:28:58.809 --> 00:29:02.759 is that. And this is probably what I haven't 00:29:02.759 --> 00:29:06.660 mentioned, but I think a lot of investors recognize 00:29:06.660 --> 00:29:09.740 this. These funds, these underlying funds have 00:29:09.740 --> 00:29:12.700 held the properties, a lot of their portfolio 00:29:12.700 --> 00:29:15.380 for sometimes for decades. So they've kind of 00:29:15.380 --> 00:29:17.680 written off all the acquisition costs like stamp 00:29:17.680 --> 00:29:20.859 duty, let's call it 6%. So essentially when you're 00:29:20.859 --> 00:29:24.059 entering into many of these funds, you're entering 00:29:24.059 --> 00:29:29.559 in essentially at NAV. So, you know, let's say 00:29:29.559 --> 00:29:32.559 that, you know, 6 % stamp duty over a 10 -year 00:29:32.559 --> 00:29:35.500 period would add, let's call it 60 or 70 basis 00:29:35.500 --> 00:29:39.819 points of additional return to your, you know, 00:29:39.819 --> 00:29:43.920 to your ungeared return had you, when you don't 00:29:43.920 --> 00:29:47.440 sort of pay those acquisition costs. So that 00:29:47.440 --> 00:29:50.019 is a real benefit. And I think, you know, people 00:29:50.019 --> 00:29:54.190 need to think about fees and costs as well. Got 00:29:54.190 --> 00:29:57.130 it. So the opportunity is to get access to something 00:29:57.130 --> 00:30:01.049 that you generally can't, right, in a format 00:30:01.049 --> 00:30:02.930 that's simple and easy that can essentially fit 00:30:02.930 --> 00:30:05.410 in a platform. That's pretty much the gist of 00:30:05.410 --> 00:30:07.750 it. And who are the main competitors in this 00:30:07.750 --> 00:30:10.130 space that you're going up against? There has 00:30:10.130 --> 00:30:14.069 to be one or two or someone that's, you know, 00:30:14.089 --> 00:30:15.809 what's the expression in the university? If you 00:30:15.809 --> 00:30:17.750 have an idea, chances are someone else has had 00:30:17.750 --> 00:30:19.589 it. So you go find their idea and go, what did 00:30:19.589 --> 00:30:21.170 they do wrong? And then you evolve from there. 00:30:21.250 --> 00:30:25.329 That's university. Welcome to uni. Yeah, absolutely. 00:30:26.890 --> 00:30:29.710 I don't believe there's a product like this on 00:30:29.710 --> 00:30:32.529 the market. And I'm quite surprised about that. 00:30:33.630 --> 00:30:37.869 Maybe I know that there's been a few of the underlying 00:30:37.869 --> 00:30:42.630 managers who have tried to put together structures 00:30:42.630 --> 00:30:45.670 that allow smaller investors access to these 00:30:45.670 --> 00:30:48.049 institutional sort of great funds. The problem 00:30:48.049 --> 00:30:50.430 with a manager doing that is that they'll tend 00:30:50.430 --> 00:30:53.789 to obviously be beholden to their funds. So I 00:30:53.789 --> 00:30:56.279 think that's a key difference with our... our 00:30:56.279 --> 00:30:59.319 product is that we're not beholden to any manager. 00:30:59.420 --> 00:31:02.700 We're going to simply invest based on the best 00:31:02.700 --> 00:31:06.380 funds that we can find at the time, whether it's 00:31:06.380 --> 00:31:09.420 a DEXA fund or GPT fund or LendLease fund or 00:31:09.420 --> 00:31:14.059 Muvac fund or the like. So it has been tried. 00:31:14.460 --> 00:31:18.539 I think managers have tried it in the past, but 00:31:18.539 --> 00:31:23.039 there's nothing really that I can think of that 00:31:23.039 --> 00:31:26.640 is similar to this. fund it really is quite a 00:31:26.640 --> 00:31:28.940 unique product in the marketplace and i guess 00:31:28.940 --> 00:31:32.460 it brings together my skills of running a fund 00:31:32.460 --> 00:31:35.720 of funds as well as being an institutional property 00:31:35.720 --> 00:31:38.220 investor it kind of blends those two together 00:31:38.220 --> 00:31:41.799 that makes a lot of sense but to your point um 00:31:41.799 --> 00:31:44.579 you know regarding it gives you the capacity 00:31:44.579 --> 00:31:47.680 to choose which funds to be in at the right time 00:31:47.680 --> 00:31:49.579 when you want to do it right you're kicking off 00:31:49.579 --> 00:31:55.269 this fund with targeting three main um fund allocations 00:31:55.269 --> 00:31:59.089 right so what are the three funds why don't we 00:31:59.089 --> 00:32:00.390 just start with one we'll go we'll go through 00:32:00.390 --> 00:32:02.430 because if i ask three we kind of get forget 00:32:02.430 --> 00:32:04.630 whether you're sure that is so what what's the 00:32:04.630 --> 00:32:07.930 first one and you know what's the macro economic 00:32:07.930 --> 00:32:11.119 rationale and rhyme and reason for that because 00:32:11.119 --> 00:32:13.220 i heard actually why don't we begin with dexys 00:32:13.220 --> 00:32:16.039 because you know i i use that building which 00:32:16.039 --> 00:32:18.319 essentially and like out of all the buildings 00:32:18.319 --> 00:32:20.779 in you know office space you know i find it very 00:32:20.779 --> 00:32:23.220 interesting that you chose that building and 00:32:23.220 --> 00:32:24.980 you've got the capacity to go all the way across 00:32:24.980 --> 00:32:27.640 australia and you've chosen sydney right and 00:32:27.640 --> 00:32:30.079 then ever since the you know we had what we've 00:32:30.079 --> 00:32:32.940 had covid we've had the gfc we've had you know 00:32:32.940 --> 00:32:37.240 occupancy rates down on um uh on you know office 00:32:37.240 --> 00:32:40.579 space right so why specifically the dex's portfolio 00:32:40.579 --> 00:32:43.339 and targeting you know that building i find that 00:32:43.339 --> 00:32:47.859 you know that quite interesting yeah so um firstly 00:32:47.859 --> 00:32:50.779 there's uh in the the institutional property 00:32:50.779 --> 00:32:54.240 fund space there's i think 15 or 15 or 20 of 00:32:54.240 --> 00:32:56.779 these funds they own about 100 billion dollars 00:32:56.779 --> 00:33:01.700 of property circa 60 70 bill of equity so There's 00:33:01.700 --> 00:33:04.619 probably about five or six funds that we really 00:33:04.619 --> 00:33:07.380 like and we want to target initially. And the 00:33:07.380 --> 00:33:10.480 Texas Wholesale Property Fund is definitely one 00:33:10.480 --> 00:33:14.500 of those funds that we like. It's a diversified 00:33:14.500 --> 00:33:17.220 portfolio. It's actually got almost $13 billion 00:33:17.220 --> 00:33:21.519 of assets, of property assets, almost 50 properties. 00:33:23.710 --> 00:33:26.130 the the office building and it's across office 00:33:26.130 --> 00:33:29.089 retail and industrial so one of the office assets 00:33:29.089 --> 00:33:32.190 is gateway which is the building you're in right 00:33:32.190 --> 00:33:34.690 so sorry my apologies yeah because you i thought 00:33:34.690 --> 00:33:36.470 you were saying that essentially dex has got 00:33:36.470 --> 00:33:39.410 a number of vehicles in which you know one is 00:33:39.410 --> 00:33:42.109 just that that office building so this is a fund 00:33:42.109 --> 00:33:46.319 which has 50 of dex's office almost 50. Well, 00:33:46.339 --> 00:33:49.400 it's not just office. It's also retail. It's 00:33:49.400 --> 00:33:51.720 got Westfield shopping centers like Westfield 00:33:51.720 --> 00:33:54.180 Miranda. It's got, you know, it's doing some 00:33:54.180 --> 00:33:56.200 developments like the Waterfront Place development 00:33:56.200 --> 00:33:59.640 in Brisbane. It's got some really great logistics 00:33:59.640 --> 00:34:02.839 assets like there's a big industrial state in 00:34:02.839 --> 00:34:06.619 Melbourne called Ravenhall. It's developed and 00:34:06.619 --> 00:34:10.219 had, you know, really great sort of returns to 00:34:10.219 --> 00:34:13.079 investors for that. So it's really a high quality 00:34:13.079 --> 00:34:16.820 wholesale, sorry, high quality. diversified portfolio 00:34:16.820 --> 00:34:21.940 with a great manager and some really great assets. 00:34:22.139 --> 00:34:24.699 And, you know, one of the assets is Gateway. 00:34:24.780 --> 00:34:28.059 And in particular, I do like that the DEXA's 00:34:28.059 --> 00:34:32.420 fund, overall, its asset quality is very good. 00:34:32.480 --> 00:34:35.760 And its office assets like Gateway and Key Quarter 00:34:35.760 --> 00:34:37.880 Tower Waterfront Place, they had some of the 00:34:37.880 --> 00:34:40.719 best office buildings in the best locations in 00:34:40.719 --> 00:34:43.969 the country. What's happening with the office 00:34:43.969 --> 00:34:48.369 space market? Is it a, do you have to, are some 00:34:48.369 --> 00:34:50.510 doing better than others? Like, you know, I've 00:34:50.510 --> 00:34:52.530 noticed that there's always a discount running 00:34:52.530 --> 00:34:54.829 around Sydney CBD of people trying to get bums 00:34:54.829 --> 00:34:57.090 on seats in particular buildings. But others 00:34:57.090 --> 00:34:59.510 are, you know, they're always a full occupancy. 00:34:59.530 --> 00:35:01.730 I think the new Salesforce towers come out, et 00:35:01.730 --> 00:35:03.889 cetera, et cetera. What's happening in that space? 00:35:04.449 --> 00:35:09.539 So I think office has definitely been hit. really 00:35:09.539 --> 00:35:14.260 hard with COVID. And ultimately, you've got to 00:35:14.260 --> 00:35:17.519 be really selective in which office assets you 00:35:17.519 --> 00:35:22.920 want to own. You want to own Gateway. in the 00:35:22.920 --> 00:35:25.480 city, in the, you know, the heart of the CBD 00:35:25.480 --> 00:35:28.780 precinct in Sydney or Key Quarter Tower, Waterfront 00:35:28.780 --> 00:35:31.059 Place, where you want to be on the Paris end 00:35:31.059 --> 00:35:34.019 of Collins Street, like 80 Collins Street. Those 00:35:34.019 --> 00:35:36.420 are the places where tenants want to be. They're 00:35:36.420 --> 00:35:39.599 great office towers and, you know, the investment 00:35:39.599 --> 00:35:43.860 bankers, the lawyers, the accountants, the rainmakers, 00:35:44.019 --> 00:35:45.840 they want to be there and that's where the staff 00:35:45.840 --> 00:35:49.059 want to be. So, and they've got the right amenity 00:35:49.059 --> 00:35:52.260 in the right location. Where you've got to be 00:35:52.260 --> 00:35:55.940 a bit careful of is kind of the lower quality 00:35:55.940 --> 00:36:00.440 assets, office buildings, the B and C grade assets 00:36:00.440 --> 00:36:02.579 or even the A grade assets, but in the wrong 00:36:02.579 --> 00:36:05.280 parts of town. People just don't want to be there. 00:36:05.420 --> 00:36:08.880 You don't want to be necessarily down parts of 00:36:08.880 --> 00:36:11.719 St Kilda Road or down parts of Docklands in Melbourne. 00:36:13.579 --> 00:36:18.659 I think it's kind of – you ask a lot of office 00:36:18.659 --> 00:36:22.159 owners, and it's all about bifurcation. There's 00:36:22.159 --> 00:36:24.519 the haves and the have -nots, and you really 00:36:24.519 --> 00:36:29.159 want to be in the locations and the properties 00:36:29.159 --> 00:36:32.059 where people want to be, and that's very much 00:36:32.059 --> 00:36:36.400 the case with office. It's quite interesting 00:36:36.400 --> 00:36:39.119 what's happening. I really want to get into interest 00:36:39.119 --> 00:36:41.639 rates and the impact of the cutting. and then 00:36:41.639 --> 00:36:43.760 absolutely what's happening with tariffs in the 00:36:43.760 --> 00:36:46.599 States and the whole dollar and all the fun stuff. 00:36:46.780 --> 00:36:50.019 But before I do that, I forget, what's the second 00:36:50.019 --> 00:36:55.360 investment you're looking at and why? We've got 00:36:55.360 --> 00:36:59.340 a number of funds that we're targeting. I also 00:36:59.340 --> 00:37:02.579 like, for example, the GPT Wholesale Shopping 00:37:02.579 --> 00:37:07.159 Centre Fund. So that fund, it's got about $3 00:37:07.159 --> 00:37:11.599 .5 billion of shopping centres. Its biggest... 00:37:12.570 --> 00:37:14.989 probably best quality asset is High Point Shopping 00:37:14.989 --> 00:37:18.570 Centre in Melbourne. That's in the western suburbs 00:37:18.570 --> 00:37:22.809 of Melbourne, strongly growing catchment. And 00:37:22.809 --> 00:37:27.090 it's got 420 retailers. That centre's effectively 00:37:27.090 --> 00:37:31.269 full. There's tenants in there, there are retailers 00:37:31.269 --> 00:37:33.889 in there who want to expand, and there's retailers 00:37:33.889 --> 00:37:37.210 not in that centre who want to get in. So that's 00:37:37.210 --> 00:37:39.909 a pretty good place if you're a landlord. And 00:37:39.909 --> 00:37:42.110 I think that... that centre has got a very long 00:37:42.110 --> 00:37:45.369 and good runway for growth. It's got near -term 00:37:45.369 --> 00:37:47.889 opportunities, refurbishment, but it's probably 00:37:47.889 --> 00:37:50.829 got longer -term sort of opportunities to build 00:37:50.829 --> 00:37:54.110 more retail space and possibly there might be 00:37:54.110 --> 00:37:58.630 even mixed use. So that fund has also recently 00:37:58.630 --> 00:38:01.650 acquired Rouse Hill Town Centre in the western 00:38:01.650 --> 00:38:05.309 suburbs of Sydney, very strongly growing catchment 00:38:05.309 --> 00:38:08.989 as well. The manager's actually doing a $200 00:38:08.989 --> 00:38:11.289 million development on that asset currently. 00:38:11.510 --> 00:38:14.769 The GPT fund owns half of that. So there'll be 00:38:14.769 --> 00:38:18.710 some development profits that'll sort of flow 00:38:18.710 --> 00:38:21.289 through into that fund as that development completes 00:38:21.289 --> 00:38:23.710 and de -risks. And I think that's one of the 00:38:23.710 --> 00:38:27.989 key elements of a lot of these funds, that you're 00:38:27.989 --> 00:38:30.150 buying established income -producing properties, 00:38:30.429 --> 00:38:33.929 but there's always opportunities to add value 00:38:33.929 --> 00:38:39.230 through development. And door number three? Number 00:38:39.230 --> 00:38:44.670 three, we like industrial. We like logistics. 00:38:45.030 --> 00:38:49.269 And there's two really great logistics funds 00:38:49.269 --> 00:38:52.690 that we've been looking at. One of them is the 00:38:52.690 --> 00:38:58.869 Lendlease APPF Industrial Fund. That's got over 00:38:58.869 --> 00:39:02.309 40 properties. It's got a really exceptional... 00:39:03.369 --> 00:39:07.369 portfolio of infill logistics locations. The 00:39:07.369 --> 00:39:09.969 manager is a very sort of strong manager. That 00:39:09.969 --> 00:39:13.010 fund's been, I think, running since the 90s. 00:39:13.010 --> 00:39:16.929 So it's continually curated the portfolio. And 00:39:16.929 --> 00:39:19.230 the other fund we like in the industrial space 00:39:19.230 --> 00:39:22.130 is the Charterhall Prime Industrial Fund. Now, 00:39:22.150 --> 00:39:26.829 this is a massive $12 billion in logistics portfolio. 00:39:27.150 --> 00:39:32.280 It started... I think in 2007, it's developed 00:39:32.280 --> 00:39:37.300 a lot of its own assets. And I guess one of the 00:39:37.300 --> 00:39:40.760 differences to being, you know, what we often 00:39:40.760 --> 00:39:44.099 see with property developers, these core funds, 00:39:44.099 --> 00:39:47.769 when they develop, they essentially... build 00:39:47.769 --> 00:39:51.230 to own or develop to core, essentially. So they 00:39:51.230 --> 00:39:54.610 would sometimes acquire land, go through the 00:39:54.610 --> 00:39:57.809 process of zoning, develop the properties, and 00:39:57.809 --> 00:40:03.710 the profits will be kept by investors, and the 00:40:03.710 --> 00:40:06.889 investors in the fund will then own that asset 00:40:06.889 --> 00:40:09.570 as a core asset. So I think that that's one of 00:40:09.570 --> 00:40:12.730 the key differences as well with these funds. 00:40:12.949 --> 00:40:16.980 They often build... core products for the benefit 00:40:16.980 --> 00:40:20.340 of their members rather than trying to buy some 00:40:20.340 --> 00:40:23.219 land, do the development and then flog it off 00:40:23.219 --> 00:40:27.480 and do the next product. And I think that that 00:40:27.480 --> 00:40:29.920 process actually is very efficient as well from 00:40:29.920 --> 00:40:33.210 a... let's call it a stamp duty sort of perspective. 00:40:33.429 --> 00:40:35.489 You know, you're buying the land and then you're 00:40:35.489 --> 00:40:38.349 developing and then you sort of keep the profits 00:40:38.349 --> 00:40:42.030 within the fund. So I think that those two funds 00:40:42.030 --> 00:40:45.349 I really like in the industrial space. So when 00:40:45.349 --> 00:40:48.000 you say industrial... What specifically is underneath 00:40:48.000 --> 00:40:50.059 that? Like, are we talking, you know, ports? 00:40:50.260 --> 00:40:53.119 Are we talking, you know, like Amazon style warehouses? 00:40:53.139 --> 00:40:55.900 You having a crack at the airports? Like, you 00:40:55.900 --> 00:40:57.480 know, what are we doing here? Or are these like 00:40:57.480 --> 00:40:59.679 the light industrial? Like, are you having to 00:40:59.679 --> 00:41:01.400 go at North Harbor? Like, you know what I mean? 00:41:01.400 --> 00:41:05.000 Like, what does it mean when these people say 00:41:05.000 --> 00:41:09.809 industrial? So I think that the newer version 00:41:09.809 --> 00:41:11.929 is called logistics. They're essentially these 00:41:11.929 --> 00:41:15.250 big sheds, often on - Like the Amazon -style 00:41:15.250 --> 00:41:19.530 sheds. Right now, up Queensland way, pretty much 00:41:19.530 --> 00:41:21.769 from Brisbane or Gold Coast all the way up to 00:41:21.769 --> 00:41:25.530 Noosa, you've got everyone's rotated out of Sydney 00:41:25.530 --> 00:41:28.570 to Melbourne and gone and then taken a job. And 00:41:28.570 --> 00:41:31.840 they're just practically - Every bit of farmland 00:41:31.840 --> 00:41:34.679 is being converted into some form of light industrial 00:41:34.679 --> 00:41:37.179 or heavy industrial or a shopping center or a 00:41:37.179 --> 00:41:39.579 Crestmator rip switch. Woolworths is landing 00:41:39.579 --> 00:41:44.179 there. Is it that type of stuff? Look, it's more 00:41:44.179 --> 00:41:48.679 the larger logistics. warehouses or sheds i mean 00:41:48.679 --> 00:41:51.500 they can range from you know let's call it you 00:41:51.500 --> 00:41:54.940 know 10 or 10 or 20 000 square meters to you 00:41:54.940 --> 00:41:57.800 know 80 to 100 000 square meters which which 00:41:57.800 --> 00:42:03.119 is which is huge you think about um uh you know 00:42:03.119 --> 00:42:06.079 like an 80 i've been into an 80 000 square meter 00:42:06.079 --> 00:42:08.260 shed there's one there's a woolies distribution 00:42:08.260 --> 00:42:12.239 center i think in in melbourne and and that's 00:42:12.239 --> 00:42:16.880 just Absolutely, you know, gigantic. So it's 00:42:16.880 --> 00:42:20.079 those type of assets that they would target as 00:42:20.079 --> 00:42:23.719 essentially logistics assets. However, some of 00:42:23.719 --> 00:42:26.579 the properties I've been in, there's been, I 00:42:26.579 --> 00:42:30.420 think, steelworks. There's been, you know, true 00:42:30.420 --> 00:42:33.900 industrial type uses as well. But a lot of these 00:42:33.900 --> 00:42:37.199 are logistics assets where, you know, goods get 00:42:37.199 --> 00:42:40.340 shipped in like an Amazon warehouse. It gets 00:42:40.340 --> 00:42:43.110 held in the warehouse. and distribute it out. 00:42:43.610 --> 00:42:47.170 Yeah, which is pretty much the backbone of how 00:42:47.170 --> 00:42:49.130 everything works these days, right? You've got 00:42:49.130 --> 00:42:51.710 a main distribution hub that's 80 ,000 square 00:42:51.710 --> 00:42:53.269 metres and then you've got the smaller ones, 00:42:53.309 --> 00:42:56.369 20, to essentially decrease the time which holds 00:42:56.369 --> 00:42:58.309 a small amount of stock so everything moves around. 00:42:58.710 --> 00:43:01.369 It's kind of a hub -and -spoke model that some 00:43:01.369 --> 00:43:04.510 of the logistics groups use. You're right. In 00:43:04.510 --> 00:43:07.889 China, it's down to, I think, you know an hour 00:43:07.889 --> 00:43:10.409 there's like one an hour between every one like 00:43:10.409 --> 00:43:12.650 here it's a couple of hours but i'm just do you 00:43:12.650 --> 00:43:14.389 reckon that essentially we're going to go the 00:43:14.389 --> 00:43:16.630 path of china and all these hubs are just going 00:43:16.630 --> 00:43:19.070 to kind of get closer to close like nodules you 00:43:19.070 --> 00:43:21.670 know connecting and making things quicker and 00:43:21.670 --> 00:43:25.809 more efficient well i think i i think yes i think 00:43:25.809 --> 00:43:30.530 that's a likely outcome and that hub and spoke 00:43:30.530 --> 00:43:35.360 model um is probably where some of these groups 00:43:35.360 --> 00:43:38.760 will have that massive distribution center with 00:43:38.760 --> 00:43:43.760 the smaller centers closer to the consumer in 00:43:43.760 --> 00:43:46.360 the infill. And I think that's having the mix 00:43:46.360 --> 00:43:49.960 of those assets. There's really big sheds and 00:43:49.960 --> 00:43:52.900 then the smaller sheds in infill locations is 00:43:52.900 --> 00:43:55.599 probably a good strategy. And both those funds 00:43:55.599 --> 00:44:00.300 that I talk about, they sort of complement each 00:44:00.300 --> 00:44:04.639 other in some ways. How's the contracts work? 00:44:04.860 --> 00:44:10.639 So are these being built? Let me rephrase. When 00:44:10.639 --> 00:44:13.820 a deal's done, are they building the train tracks 00:44:13.820 --> 00:44:17.820 hoping a train comes or are they getting essentially 00:44:17.820 --> 00:44:22.699 a contractor, a tender from say Woolworths or 00:44:22.699 --> 00:44:27.119 Amazon requesting them to find space to build 00:44:27.119 --> 00:44:29.559 in a particular and help us find a deal? How 00:44:29.559 --> 00:44:32.190 are these? And then essentially they take the 00:44:32.190 --> 00:44:38.730 tenancy. What are these transactions? So I think 00:44:38.730 --> 00:44:42.030 when you're probably talking about a new development 00:44:42.030 --> 00:44:45.369 of a shed. So there's a new thing. Or it might 00:44:45.369 --> 00:44:47.650 not be new. So there's something currently existing. 00:44:47.809 --> 00:44:50.110 What I'm trying to understand is the property 00:44:50.110 --> 00:44:52.989 itself with essentially the logistic shed, who 00:44:52.989 --> 00:44:57.110 owns it? Is it a JV? Is it a lease agreement? 00:44:58.199 --> 00:45:00.059 And where are we going to be going with this 00:45:00.059 --> 00:45:02.519 is essentially the risks associated to if the 00:45:02.519 --> 00:45:05.239 market takes a hit, we get another COVID event 00:45:05.239 --> 00:45:08.340 and everyone has to work from home again. I'm 00:45:08.340 --> 00:45:11.139 just trying to understand how are these – because 00:45:11.139 --> 00:45:13.360 people don't really think about the risks and 00:45:13.360 --> 00:45:16.599 rewards based on these types of questions, but 00:45:16.599 --> 00:45:19.599 you're talking about – You know, bond rate over 00:45:19.599 --> 00:45:22.440 in the States, they tried to cut it from five 00:45:22.440 --> 00:45:24.380 down to four. And then the Chinese said nine 00:45:24.380 --> 00:45:26.980 was the largest trading day in bonds we've ever 00:45:26.980 --> 00:45:29.039 seen in our entire life, just shook markets. 00:45:29.260 --> 00:45:32.139 If things change, which are happening at a, you 00:45:32.139 --> 00:45:34.420 know, regimes are changing on a global scale 00:45:34.420 --> 00:45:36.960 and potentially the domestic impacts, right, 00:45:37.019 --> 00:45:40.679 of those changes can greatly impact the consumer 00:45:40.679 --> 00:45:43.719 nature and thus the credit markets and just have 00:45:43.719 --> 00:45:46.539 like a domino impact on. these particular assets 00:45:46.539 --> 00:45:49.360 and when looking at that i'm just trying to understand 00:45:49.360 --> 00:45:51.719 you can get a very good idea of potentially how 00:45:51.719 --> 00:45:54.980 something may be impacted depending on how the 00:45:54.980 --> 00:45:57.380 contracts were agreed you know on the way and 00:45:57.380 --> 00:45:59.300 who's essentially the tenancy which is paying 00:45:59.300 --> 00:46:02.139 the bill to ensure that these things don't have 00:46:02.139 --> 00:46:04.280 a problem so i'm just trying to get an idea since 00:46:04.280 --> 00:46:06.000 you're looking at these quite heavily like you 00:46:06.000 --> 00:46:07.880 know how what are these things how are these 00:46:07.880 --> 00:46:11.980 things contracted Yeah. So let's take an example 00:46:11.980 --> 00:46:16.239 of, let's say there's the Lendlease Fund owns 00:46:16.239 --> 00:46:19.239 a 20 ,000 square meter shed in Trugganina in 00:46:19.239 --> 00:46:21.519 Melbourne, and that's got a five -year lease 00:46:21.519 --> 00:46:24.760 to toll. holdings yeah i don't know if that's 00:46:24.760 --> 00:46:27.219 the case i'm just sort of making making it up 00:46:27.219 --> 00:46:31.519 so regardless of what happens to tariffs or trump 00:46:31.519 --> 00:46:36.019 you know there's still a a lease in place uh 00:46:36.019 --> 00:46:40.199 between toll and uh the owner of that that building 00:46:40.199 --> 00:46:44.449 and and toll being a corporate, has to pay the 00:46:44.449 --> 00:46:51.230 rent until the term expires. Okay. The key thing 00:46:51.230 --> 00:46:55.309 is when that shed, when there's an expiry coming 00:46:55.309 --> 00:46:58.650 up, then obviously the landlord needs to negotiate 00:46:58.650 --> 00:47:04.949 with the tenant about whether they renew or whether 00:47:04.949 --> 00:47:08.750 that tenant goes to another place. But generally... 00:47:10.440 --> 00:47:18.079 And the rental terms depend on the market conditions, 00:47:18.079 --> 00:47:25.579 so the economic growth. Is that shed the right 00:47:25.579 --> 00:47:27.820 sort of shed for that tenant? Is it in the right 00:47:27.820 --> 00:47:31.940 location? Does it have the right amenity? Does 00:47:31.940 --> 00:47:34.730 it have the right access to... to transport. 00:47:34.989 --> 00:47:38.170 And also that tenant will sort of think carefully 00:47:38.170 --> 00:47:41.909 about the cost of moving its facility from that 00:47:41.909 --> 00:47:44.090 shed to another shed. So there's a whole lot 00:47:44.090 --> 00:47:48.210 of things that go into the mix when there's a 00:47:48.210 --> 00:47:52.949 re -leasing deal taking place. Generally, as 00:47:52.949 --> 00:47:56.150 I said, if you've got a shed that's leased to 00:47:56.150 --> 00:48:00.150 a corporate for five or 10 years, that income, 00:48:00.389 --> 00:48:03.650 that rental income is going to be very stable 00:48:03.650 --> 00:48:07.969 and it's very unlikely with these large tenants 00:48:07.969 --> 00:48:12.349 that they're simply going to default. I hear 00:48:12.349 --> 00:48:13.869 what you're saying and that makes a lot of sense. 00:48:13.969 --> 00:48:16.429 What I'm trying to work out is in their portfolio, 00:48:16.730 --> 00:48:20.329 what percentage of the portfolio do they own 00:48:20.329 --> 00:48:23.110 outright? What I'm trying to understand is do 00:48:23.110 --> 00:48:26.869 they own 100 % outright and then everything is 00:48:26.869 --> 00:48:28.849 essentially a lease agreement which they have 00:48:28.849 --> 00:48:32.429 to work out or are there deals where essentially 00:48:32.429 --> 00:48:35.349 it might be a JV with Amazon, I don't know, where 00:48:35.349 --> 00:48:37.809 it's a 50 -50 JV because they can't be arsed 00:48:37.809 --> 00:48:39.889 building it but they want to essentially – what 00:48:39.889 --> 00:48:42.449 I'm trying to work out is because if it's 100 00:48:42.449 --> 00:48:46.289 % leased out and those things – you know, end 00:48:46.289 --> 00:48:48.389 or, you know, the winds change, then you have 00:48:48.389 --> 00:48:50.110 an asset potentially that might not be leased, 00:48:50.130 --> 00:48:51.570 which is exactly what we're seeing in Sydney 00:48:51.570 --> 00:48:53.550 CBD. People thought that everyone's going to 00:48:53.550 --> 00:48:55.150 go to work for Sydney CBD for the rest of their 00:48:55.150 --> 00:48:57.610 lives. COVID happened, work from home, the capacity 00:48:57.610 --> 00:49:00.309 to just work out a noose here and not care and 00:49:00.309 --> 00:49:02.809 still run an empire. I'm just saying when things 00:49:02.809 --> 00:49:06.130 change, like these contracts, do they own them 00:49:06.130 --> 00:49:10.670 100 % or they're part owned or what's the structure? 00:49:10.989 --> 00:49:16.230 So it depends on the fund. Most industrial assets 00:49:16.230 --> 00:49:20.630 typically have a lower ticket size. So many of 00:49:20.630 --> 00:49:23.710 these funds own, let's say that Traganina shed, 00:49:24.010 --> 00:49:27.250 it'll own it 100%. It might be a $30 or $40 million 00:49:27.250 --> 00:49:32.389 shed. When it comes to the very large assets, 00:49:32.449 --> 00:49:36.289 sometimes there's a joint venture. Let's say 00:49:36.289 --> 00:49:40.170 the Charter Hall Fund might own 50 % of that 00:49:40.170 --> 00:49:42.969 shed with maybe another Charter Hall vehicle 00:49:42.969 --> 00:49:47.570 or another investor. So there's generally a separation 00:49:47.570 --> 00:49:51.750 between the property owners, the landlords and 00:49:51.750 --> 00:49:55.369 the tenants. So you tend not to have many tenants. 00:49:56.079 --> 00:49:58.699 owning or these big corporate tenants owning 00:49:58.699 --> 00:50:01.460 part of the shed because you know their return 00:50:01.460 --> 00:50:04.079 on equity is based on their business they've 00:50:04.079 --> 00:50:07.579 got a different return hurdle than owning property 00:50:07.579 --> 00:50:10.780 it's it's kind of a you know they'd rather just 00:50:10.780 --> 00:50:14.039 simply be a be a tenant and and pay the rent 00:50:14.039 --> 00:50:18.800 rather than you know sort of get access the returns 00:50:18.800 --> 00:50:22.789 of property yeah it's quite interesting I love 00:50:22.789 --> 00:50:25.590 these types of conversations. You see something 00:50:25.590 --> 00:50:28.230 and then you keep peeling the layers of the onion 00:50:28.230 --> 00:50:29.909 back. It's like, okay, what's really underneath 00:50:29.909 --> 00:50:34.590 this? Buffett's expression, you'll see if someone's 00:50:34.590 --> 00:50:36.829 swimming naked when the tide goes out. That's 00:50:36.829 --> 00:50:41.070 right. You never know. Look, on the risks front, 00:50:41.250 --> 00:50:44.369 a lot's changing in the macro landscape as I 00:50:44.369 --> 00:50:48.449 brought up before. Where are we, I suppose, in 00:50:48.449 --> 00:50:53.019 the cycle of these large… industrial, commercial, 00:50:53.219 --> 00:50:56.340 shopping, you know, essentially, you know, office 00:50:56.340 --> 00:50:58.159 space buildings, what part of the cycle are we 00:50:58.159 --> 00:51:01.780 in? So I think we're actually in an extremely 00:51:01.780 --> 00:51:05.559 attractive cycle for buying prime grade Australian 00:51:05.559 --> 00:51:10.420 real estate for a number of reasons. Number one 00:51:10.420 --> 00:51:13.119 is these assets have repriced significantly. 00:51:13.380 --> 00:51:15.900 If you could wind back the clock, let's say three 00:51:15.900 --> 00:51:18.900 years, where interest rates were at record lows, 00:51:19.139 --> 00:51:23.440 the yields or the cap rates of these properties 00:51:23.440 --> 00:51:29.619 were also at record lows. So essentially... To 00:51:29.619 --> 00:51:33.440 give you an idea, our target portfolio, the cap 00:51:33.440 --> 00:51:37.199 rate or yield of the target portfolio in our 00:51:37.199 --> 00:51:40.860 target portfolio is about 5 .7%. That's essentially 00:51:40.860 --> 00:51:43.760 the yield of the properties. If you wind the 00:51:43.760 --> 00:51:46.440 clock back, let's call it three years, that... 00:51:46.670 --> 00:51:49.070 Similar portfolio would have been priced at around 00:51:49.070 --> 00:51:53.269 4 .5 % to 4 .75 % on a yield basis. So the yields 00:51:53.269 --> 00:51:56.510 have blown out significantly. In fact, we've 00:51:56.510 --> 00:51:59.469 seen, particularly with office, we've seen some 00:51:59.469 --> 00:52:03.550 office buildings down 15%, 20 % or more in value. 00:52:04.730 --> 00:52:06.630 And then you think about where we are in the 00:52:06.630 --> 00:52:09.449 cycle. We've already seen two interest rate cuts. 00:52:09.750 --> 00:52:13.250 And obviously, falling interest rates is a really 00:52:13.250 --> 00:52:17.929 positive sign for property because it lowers 00:52:17.929 --> 00:52:22.349 the interest expense of owners. It changes the 00:52:22.349 --> 00:52:25.050 equation for buyers. There might be some buyers 00:52:25.050 --> 00:52:29.219 who are happy to now use a bit more debt. And 00:52:29.219 --> 00:52:31.440 as a result, we're actually seeing increasing 00:52:31.440 --> 00:52:36.900 property transaction activity in these properties 00:52:36.900 --> 00:52:39.860 as well. I mean, to give you an idea, a few, 00:52:40.119 --> 00:52:43.079 it would have been a month or two ago, a Japanese 00:52:43.079 --> 00:52:46.960 investor, Dai Baru, just bought a $600 million, 00:52:47.320 --> 00:52:51.219 spent $600 million on a big office tower in Sydney. 00:52:51.519 --> 00:52:54.079 I saw that. Apparently, it was the biggest transaction 00:52:54.079 --> 00:52:57.619 for a very long time. Yeah, and I think more 00:52:57.619 --> 00:53:01.739 recently Investor, which is one that has recently 00:53:01.739 --> 00:53:06.400 transacted as well. So there's also been increasing 00:53:06.400 --> 00:53:09.940 interest in logistics. There's been a lot of 00:53:09.940 --> 00:53:11.840 interest over the past few years, and that's 00:53:11.840 --> 00:53:14.900 increasing as well. And also retail, we're seeing 00:53:14.900 --> 00:53:19.079 a number of shopping centers transact as well. 00:53:21.650 --> 00:53:25.429 stabilizing interest rate environment, more attractive 00:53:25.429 --> 00:53:28.269 pricing, and increasing property transaction 00:53:28.269 --> 00:53:32.010 activity, they tend to be good signs for the 00:53:32.010 --> 00:53:35.050 outlook of how properties are priced going forward. 00:53:36.250 --> 00:53:39.389 that's on the one side. On the other side, we 00:53:39.389 --> 00:53:42.849 actually believe that there's good property fundamentals 00:53:42.849 --> 00:53:46.289 for the really high quality assets. So for example, 00:53:46.289 --> 00:53:49.690 occupancy in high quality shopping centres like 00:53:49.690 --> 00:53:53.309 High Point and also the very high quality industrial 00:53:53.309 --> 00:53:57.849 assets is extremely high, getting close to sort 00:53:57.849 --> 00:54:02.610 of 97, 98, sometimes 99 % occupancy. And we're 00:54:02.610 --> 00:54:07.289 also seeing good and growing strong occupancy 00:54:07.289 --> 00:54:09.809 for the right sort of office assets like the 00:54:09.809 --> 00:54:12.969 Gateway Towers in Sydney and the Key Quarter 00:54:12.969 --> 00:54:16.269 Towers and in Brisbane and to a lesser extent 00:54:16.269 --> 00:54:19.269 Melbourne. I think Melbourne's lagging a bit. 00:54:19.369 --> 00:54:21.610 So if you're getting the right assets, you're 00:54:21.610 --> 00:54:26.409 getting good occupancy. And then you've got... 00:54:26.590 --> 00:54:30.250 The supply outlook, the outlook for new supply 00:54:30.250 --> 00:54:36.809 is lower than it was in past. And that's because, 00:54:36.949 --> 00:54:40.130 as you're probably aware, it's really expensive 00:54:40.130 --> 00:54:43.010 to build. You know, construction costs, development 00:54:43.010 --> 00:54:46.190 costs are so high. So that's putting a lid on 00:54:46.190 --> 00:54:50.349 new supply. Then that offsets with we've got 00:54:50.349 --> 00:54:52.789 population growth. There's still more and more 00:54:52.789 --> 00:54:55.670 people coming to live in Australia. I think CBRE, 00:54:55.849 --> 00:54:59.050 which is a major property group, they predict 00:54:59.050 --> 00:55:01.969 that over 4 million people, 4 million new people 00:55:01.969 --> 00:55:03.809 will be living in Australia over the next 10 00:55:03.809 --> 00:55:06.329 years. And that's going to drive significant 00:55:06.329 --> 00:55:11.349 demand for new space across all sectors, resi, 00:55:11.349 --> 00:55:13.809 healthcare. Did you say 4 million in 10 years? 00:55:14.859 --> 00:55:17.619 That's CBRE's prediction, 15%. Yeah, I think 00:55:17.619 --> 00:55:21.179 the Doge ran an analysis and used Australia as 00:55:21.179 --> 00:55:22.800 a case study. I think they just released this 00:55:22.800 --> 00:55:25.480 week that last year alone on our populations 00:55:25.480 --> 00:55:28.579 of, what, 33 or 34 million, we had a million 00:55:28.579 --> 00:55:33.480 inflows last year. So we grew by a mil. So based 00:55:33.480 --> 00:55:35.440 on those numbers, if nothing changes, I think 00:55:35.440 --> 00:55:37.639 they're actually indicating that at a bare minimum, 00:55:37.659 --> 00:55:39.380 we'll potentially grow by 10 million in the next 00:55:39.380 --> 00:55:42.039 10 years. And that's not including birth rate. 00:55:42.099 --> 00:55:44.719 That's purely just... new inhabitants coming 00:55:44.719 --> 00:55:47.699 in yeah and and that's all that's going to drive 00:55:47.699 --> 00:55:50.320 a lot of demand for space so you've got sort 00:55:50.320 --> 00:55:54.199 of the um uh you've got demand for space and 00:55:54.199 --> 00:55:57.119 it's expensive to build uh and i mean to put 00:55:57.119 --> 00:56:00.659 some numbers into in into that when when you're 00:56:00.659 --> 00:56:05.309 looking at um industrial, CBRE predict that for 00:56:05.309 --> 00:56:08.329 every person who comes, a new person who lives 00:56:08.329 --> 00:56:11.670 in Australia, that drives demand, that creates 00:56:11.670 --> 00:56:14.269 an incremental four and a half square metres 00:56:14.269 --> 00:56:17.530 of space. Putting that into numbers, that's like 00:56:17.530 --> 00:56:22.269 building 950 MCG playing fields of new sheds 00:56:22.269 --> 00:56:26.449 over the next 10 years. And that's a pretty big 00:56:26.449 --> 00:56:30.320 number. In retail, That's like building, and 00:56:30.320 --> 00:56:33.420 retail, they're saying for every new person you 00:56:33.420 --> 00:56:36.880 need an office, about 0 .8 of a square meter 00:56:36.880 --> 00:56:40.400 of new space. So in retail, that's like building 00:56:40.400 --> 00:56:45.599 14 new Chatston shopping centers or 25 Bondi 00:56:45.599 --> 00:56:48.280 junctions over the next 10 years. That's a lot 00:56:48.280 --> 00:56:50.599 of retail space to build. And then you put that 00:56:50.599 --> 00:56:53.500 in an office context, that's like building 40 00:56:53.500 --> 00:56:58.579 new 101 Collins Street Towers or 45 Chifley Towers 00:56:58.579 --> 00:57:03.440 over the next 10 years. So we think given the 00:57:03.440 --> 00:57:09.420 high occupancy of high quality buildings and 00:57:09.420 --> 00:57:15.039 the... population growth and the fact that supply 00:57:15.039 --> 00:57:18.099 is it's hard to build new stuff we think that 00:57:18.099 --> 00:57:23.420 is a good macro environment for you know strong 00:57:23.420 --> 00:57:26.860 solid rental growth going forward into the medium 00:57:26.860 --> 00:57:32.079 to long term. Yeah it's very interesting what's 00:57:32.079 --> 00:57:33.920 happening with the new changes that are coming 00:57:33.920 --> 00:57:40.980 in as well regarding bans on You know, the international 00:57:40.980 --> 00:57:42.760 capital coming in, you have to be a resident 00:57:42.760 --> 00:57:44.380 to purchase. Do you reckon that's going to slow 00:57:44.380 --> 00:57:47.719 down money being injected into this space or 00:57:47.719 --> 00:57:51.099 everyone's moved their money? They wanted to 00:57:51.099 --> 00:57:52.880 move their money before April and then now it's 00:57:52.880 --> 00:57:54.860 available, you know, these types of opportunities. 00:57:55.320 --> 00:57:59.480 What do you think is happening there? So are 00:57:59.480 --> 00:58:02.900 you saying it might? change the sort of population 00:58:02.900 --> 00:58:05.159 growth forecast the population growth i was just 00:58:05.159 --> 00:58:06.599 talking about capital coming in because there's 00:58:06.599 --> 00:58:08.260 two things right there's the population growth 00:58:08.260 --> 00:58:10.119 but there's also capital coming in the door to 00:58:10.119 --> 00:58:12.780 purchase these purchase these assets so you know 00:58:12.780 --> 00:58:15.460 yes you got population but yes you got capital 00:58:15.460 --> 00:58:18.219 you're looking for a home which you know historically 00:58:18.219 --> 00:58:21.309 some countries your money's not safe. They can 00:58:21.309 --> 00:58:22.550 just reach in and take the capital out of your 00:58:22.550 --> 00:58:24.170 bank account. But if you look at the laws in 00:58:24.170 --> 00:58:26.510 Australia, you know, property is pretty much 00:58:26.510 --> 00:58:28.730 like a bank. I hate to say it and look, everyone 00:58:28.730 --> 00:58:30.590 knows it, but you drive around Sydney Harbour 00:58:30.590 --> 00:58:32.590 at night, you know, and look how many lights 00:58:32.590 --> 00:58:34.690 are on in those multi -million dollar, $10, $15 00:58:34.690 --> 00:58:37.030 million apartments, right? What you got like, 00:58:37.170 --> 00:58:41.139 you know, it's 20 stories high. you got literally 00:58:41.139 --> 00:58:44.179 four levels on lights every single year. It's 00:58:44.179 --> 00:58:45.940 just essentially people just been land banking 00:58:45.940 --> 00:58:48.360 assets. And as you said, there's been some very 00:58:48.360 --> 00:58:51.579 interesting changes to policy that's happened 00:58:51.579 --> 00:58:55.179 this year regarding foreign investment. I was 00:58:55.179 --> 00:58:58.780 just wondering if you think the restrictions 00:58:58.780 --> 00:59:00.659 on foreign investment for the next two years 00:59:00.659 --> 00:59:02.460 is going to have a major impact on these assets 00:59:02.460 --> 00:59:04.280 or has the money already come in and it's not 00:59:04.280 --> 00:59:09.570 really a problem? I think my view is that particularly 00:59:09.570 --> 00:59:13.730 with what we're seeing in the US and the tariffs, 00:59:13.969 --> 00:59:17.730 and there's a lot of global uncertainty, I think 00:59:17.730 --> 00:59:22.940 Australia... will continue to be seen as an attractive 00:59:22.940 --> 00:59:28.679 place for foreign capital to invest in. We've 00:59:28.679 --> 00:59:34.579 got a stable government rule of law and we believe 00:59:34.579 --> 00:59:39.820 in a rules -based sort of trading. So I think 00:59:39.820 --> 00:59:44.400 the foreign capital is definitely looking, you 00:59:44.400 --> 00:59:47.159 know, continues to look at Australia as a good 00:59:47.159 --> 00:59:51.159 place to invest, particularly with what's going 00:59:51.159 --> 00:59:54.880 on in the US as well. So that's been a discussion 00:59:54.880 --> 00:59:57.340 I've had with a number of property groups and 00:59:57.340 --> 01:00:01.219 that's what they're seeing. So increasing interest 01:00:01.219 --> 01:00:05.400 in Australia as a capital destination. That's 01:00:05.400 --> 01:00:08.820 very interesting. It's going to be interesting 01:00:08.820 --> 01:00:10.280 to see what's going to happen in the next couple 01:00:10.280 --> 01:00:13.579 of years. So with the cutting of the interest 01:00:13.579 --> 01:00:17.199 rates, I know we just covered it, with the funds 01:00:17.199 --> 01:00:19.639 and your targeted returns, if they do proceed 01:00:19.639 --> 01:00:23.699 to cut two more times, what impact will that 01:00:23.699 --> 01:00:27.159 have on potential returns for the strategy? So 01:00:27.159 --> 01:00:30.900 that cap rate or yield that I talked about of 01:00:30.900 --> 01:00:35.860 our indicative portfolio of 5 .7, we believe 01:00:35.860 --> 01:00:39.090 that... So reducing interest rate environment 01:00:39.090 --> 01:00:43.469 should actually tighten those yields. So those 01:00:43.469 --> 01:00:45.530 cap rates, as you know, cap rate or yield is 01:00:45.530 --> 01:00:47.670 kind of the inverse of the price earnings multiple. 01:00:47.809 --> 01:00:50.809 So as the yield comes down, essentially, it's 01:00:50.809 --> 01:00:53.449 like expanding the price earnings multiple. So 01:00:53.449 --> 01:00:57.510 essentially, that dollar of income that the property 01:00:57.510 --> 01:01:01.170 is producing will be worth more potentially as 01:01:01.170 --> 01:01:08.599 the yield sort of tightens. it's a positive factor 01:01:08.599 --> 01:01:13.320 going forward. Look, since you've been speaking 01:01:13.320 --> 01:01:14.940 to a lot of other groups and a lot of people 01:01:14.940 --> 01:01:17.079 looking to invest and a lot of colleagues that 01:01:17.079 --> 01:01:20.099 are looking to back you in this new fund of yours, 01:01:20.280 --> 01:01:22.699 what's some interesting questions they've hit 01:01:22.699 --> 01:01:27.420 you with that I haven't covered? I think probably 01:01:27.420 --> 01:01:32.980 there's one question that some people say, well, 01:01:33.119 --> 01:01:37.099 it's... our total return is eight to 10%. And 01:01:37.099 --> 01:01:39.460 we've got sort of a waterfall diagram of how 01:01:39.460 --> 01:01:42.920 we make up that return. And in our, it's not 01:01:42.920 --> 01:01:45.719 a forecast, but it sort of works through essentially 01:01:45.719 --> 01:01:48.519 that total return of eight to 10. Let's say it's 01:01:48.519 --> 01:01:51.239 nine in the middle of that band. We sort of think 01:01:51.239 --> 01:01:53.820 over the next few years, we'll deliver around 01:01:53.820 --> 01:01:57.559 about a 4 % income return and around 5 % capital 01:01:57.559 --> 01:02:00.280 growth. So some people say, well, the income 01:02:00.280 --> 01:02:03.380 return is lower than, you know, let's, say a 01:02:03.380 --> 01:02:07.199 syndicate, which could be, you know, like an 01:02:07.199 --> 01:02:10.300 office building in Canberra that's 50 % geared 01:02:10.300 --> 01:02:14.800 or, you know, that's showing a 7 % or 8 % distribution 01:02:14.800 --> 01:02:20.000 yield. Well, the key difference is that... because 01:02:20.000 --> 01:02:23.079 our fund has higher quality properties with lower 01:02:23.079 --> 01:02:26.980 gearing, it will have a lower sort of initial 01:02:26.980 --> 01:02:29.679 income return. But we believe that total return 01:02:29.679 --> 01:02:32.639 of eight to 10 is a much more attractive risk 01:02:32.639 --> 01:02:36.159 adjusted return than essentially buying a single 01:02:36.159 --> 01:02:39.860 property, which you've paid stamp duty on, that's 01:02:39.860 --> 01:02:43.099 50 % geared. There's much, much less diversification. 01:02:43.219 --> 01:02:46.699 So I think people... get their heads around that 01:02:46.699 --> 01:02:49.940 about how the return profile differs to a to 01:02:49.940 --> 01:02:53.239 a high yielding type property and when they understand 01:02:53.239 --> 01:02:55.679 that they sort of realize that our return is 01:02:55.679 --> 01:02:58.880 is of a very high quality so that that's one 01:02:58.880 --> 01:03:01.760 question that that people ask about probably 01:03:01.900 --> 01:03:04.780 Probably the other question is around liquidity. 01:03:05.539 --> 01:03:09.559 And as you know, with unlisted property, there's 01:03:09.559 --> 01:03:12.880 no silver bullet for liquidity. However, we believe 01:03:12.880 --> 01:03:15.480 that the fund, which is monthly unit pricing, 01:03:15.679 --> 01:03:20.559 quarterly distributions, And we're basically 01:03:20.559 --> 01:03:23.940 saying we believe we can deliver 5 % of NAV per 01:03:23.940 --> 01:03:27.320 quarter on a reasonable endeavours basis. And 01:03:27.320 --> 01:03:32.880 how we get that is, excuse me, how we arrive 01:03:32.880 --> 01:03:35.760 at that is there's a number of what we call layers 01:03:35.760 --> 01:03:39.059 of liquidity in this fund. The first layer is 01:03:39.059 --> 01:03:41.900 the underlying funds, the institutional funds, 01:03:42.079 --> 01:03:45.599 they often have liquidity windows. So some funds 01:03:45.599 --> 01:03:47.699 might every sort of five to seven years, they 01:03:47.699 --> 01:03:49.670 basically... say to investors do you want to 01:03:49.670 --> 01:03:51.250 do you want to stay in the fund or do you want 01:03:51.250 --> 01:03:52.889 to roll over because they're open -ended funds 01:03:52.889 --> 01:03:55.429 so they might so you know let's say if you're 01:03:55.429 --> 01:03:57.929 a let's call it uni super you got 300 million 01:03:57.929 --> 01:04:01.389 in one fund you might choose to redeem 50 million 01:04:01.389 --> 01:04:03.610 because you want to rebalance to to something 01:04:03.610 --> 01:04:06.190 else or you might want to take take more in that 01:04:06.190 --> 01:04:08.409 fund so there's these liquidity windows that 01:04:08.409 --> 01:04:10.889 are coming up in many of the funds we're targeting 01:04:10.889 --> 01:04:13.750 some of them have liquidity every let's call 01:04:13.750 --> 01:04:16.949 it you know every every 12 to 18 months you can 01:04:16.949 --> 01:04:19.730 get out some of it, or some of them have a limited 01:04:19.730 --> 01:04:22.889 sort of quarterly levels of liquidity. So it 01:04:22.889 --> 01:04:26.369 just depends on the underlying fund. So that's 01:04:26.369 --> 01:04:28.590 layer one of liquidity. The second layer of liquidity 01:04:28.590 --> 01:04:31.610 is that these funds have essentially what you 01:04:31.610 --> 01:04:35.269 call secondary. So investors can sometimes buy 01:04:35.269 --> 01:04:38.809 or sell interest in the funds, even if those 01:04:38.809 --> 01:04:41.409 funds aren't raising capital. So again, in that 01:04:41.409 --> 01:04:45.119 example, let's say Aussie super has 500 million 01:04:45.119 --> 01:04:48.159 in one fund, it might want to rebalance 100 mil 01:04:48.159 --> 01:04:50.860 out of that fund into something else. So there's 01:04:50.860 --> 01:04:53.860 this process of buying and selling secondaries 01:04:53.860 --> 01:04:58.039 that occurs. Then we've got the third layer of 01:04:58.039 --> 01:05:02.000 liquidity in our fund, which is a small listed 01:05:02.000 --> 01:05:05.380 property portfolio. We're probably going to be 01:05:05.380 --> 01:05:08.639 targeting the lower end of 10 to 20 % in selected 01:05:08.639 --> 01:05:13.079 REITs. And the REITs will be not necessarily 01:05:13.079 --> 01:05:15.099 the property developers or the fund managers 01:05:15.099 --> 01:05:17.360 like Goodman Group or Charter Hall, more the 01:05:17.360 --> 01:05:20.000 rent collecting REITs, because that's what our 01:05:20.000 --> 01:05:22.679 fund is. Essentially, it's a core rent collecting 01:05:22.679 --> 01:05:26.380 property product. So we'll be focused on rent 01:05:26.380 --> 01:05:29.880 collecting REITs that also complement the portfolio. 01:05:30.179 --> 01:05:32.639 So there might be REITs such as childcare or 01:05:32.639 --> 01:05:37.480 self -storage or Bunnings warehouses or convenience 01:05:37.480 --> 01:05:39.960 retail that kind of balance out our portfolio 01:05:39.960 --> 01:05:42.679 and provide more diversification. as well as 01:05:42.679 --> 01:05:45.539 a bit of liquidity. And then, of course, once 01:05:45.539 --> 01:05:48.679 the fund is up and running, there could be hundreds, 01:05:48.820 --> 01:05:51.480 maybe thousands of investors, some investors 01:05:51.480 --> 01:05:55.480 coming in on a regular basis, like in a model 01:05:55.480 --> 01:05:58.480 portfolio, some investors doing DRPs. So we'll 01:05:58.480 --> 01:06:00.659 be able to sort of manage the liquidity through 01:06:00.659 --> 01:06:02.719 there. So when you layer up all those levels 01:06:02.719 --> 01:06:05.579 of liquidity, we believe that the fund offers 01:06:05.579 --> 01:06:11.010 a good level of liquidity for what we're... for 01:06:11.010 --> 01:06:13.130 a fund of this star. And that's the way we've 01:06:13.130 --> 01:06:16.769 designed it. That makes a lot of sense. So if 01:06:16.769 --> 01:06:21.769 we didn't cover it already, Panjan is open for 01:06:21.769 --> 01:06:25.550 a raise right now. Do you want to cover exactly 01:06:25.550 --> 01:06:28.909 what their offer is? What's the deal? What's 01:06:28.909 --> 01:06:32.199 the timeline? What is happening, please? Yeah, 01:06:32.239 --> 01:06:36.039 no, thank you. So we're currently raising funds 01:06:36.039 --> 01:06:39.519 into our first close as we speak. We think there's 01:06:39.519 --> 01:06:42.920 some good opportunities to deploy in the near 01:06:42.920 --> 01:06:46.440 term into some of these great funds that we're 01:06:46.440 --> 01:06:49.619 talking about. And, you know, I emphasise that, 01:06:49.679 --> 01:06:53.940 you know, that the fund is targeting some of 01:06:53.940 --> 01:06:57.440 the best quality institutional grade funds at 01:06:57.440 --> 01:07:00.809 a very attractive... pricing point in the cycle 01:07:00.809 --> 01:07:06.579 with good long -term property fundamentals. in 01:07:06.579 --> 01:07:09.880 structures that essentially there's minimal transaction 01:07:09.880 --> 01:07:15.000 costs like stamp duty. And there is a potential 01:07:15.000 --> 01:07:18.480 to be accessing some of these funds at small 01:07:18.480 --> 01:07:21.559 discounts to their book as well. Although personally, 01:07:22.460 --> 01:07:26.340 I'd be buying a lot of these funds at book value 01:07:26.340 --> 01:07:29.699 at the moment, given their sort of attractive 01:07:29.699 --> 01:07:34.579 return outlook. So yes, we're raising to... we're 01:07:34.579 --> 01:07:38.699 currently raising to launch the fund or establish 01:07:38.699 --> 01:07:43.519 the fund in June, ideally, with deployment in 01:07:43.519 --> 01:07:48.760 mid to late June or possibly early July. But 01:07:48.760 --> 01:07:52.380 as I said, once the fund is established, then 01:07:52.380 --> 01:07:56.260 I believe it can become, it goes into the next 01:07:56.260 --> 01:08:00.420 sort of growth stage of the fund where we will 01:08:00.420 --> 01:08:03.739 look to list the fund on the big platforms. as 01:08:03.739 --> 01:08:07.119 Hub or NetWealth. We'll get it rated with a rating 01:08:07.119 --> 01:08:11.519 agency because I've had many discussions from 01:08:11.519 --> 01:08:14.400 financial planners who say to me that, you know, 01:08:14.400 --> 01:08:19.000 Ryan, this is a wonderful fund for our clients. 01:08:19.079 --> 01:08:21.439 It's conservative. It's high quality. It's monthly 01:08:21.439 --> 01:08:24.439 unit pricing. It's ongoing. You know, it's a 01:08:24.439 --> 01:08:27.779 sort of a perfect model portfolio type fund for 01:08:27.779 --> 01:08:30.500 a lot of their clients. They need to get it listed. 01:08:30.680 --> 01:08:33.359 And, you know, we think that the scalability 01:08:33.359 --> 01:08:38.380 of this fund is significant. you know, the underlying 01:08:38.380 --> 01:08:41.140 funds that we're investing in is $60 or $70 billion 01:08:41.140 --> 01:08:45.020 of equity. There's plenty of secondaries that 01:08:45.020 --> 01:08:47.260 are available, plus some of the funds are raising 01:08:47.260 --> 01:08:51.439 equity. So we would hope to grow this fund to 01:08:51.439 --> 01:08:53.340 be hundreds of millions and possibly billions 01:08:53.340 --> 01:08:57.119 of dollars in size, which I think that scale 01:08:57.119 --> 01:09:00.000 will be really great for investors and allow 01:09:00.000 --> 01:09:06.720 us to, you know, negotiate great terms with managers 01:09:06.720 --> 01:09:11.840 and essentially, you know, continue to deploy 01:09:11.840 --> 01:09:15.000 into great opportunities. If any of our listeners 01:09:15.000 --> 01:09:17.760 want to learn more about PanGen or yourself or 01:09:17.760 --> 01:09:21.180 get in touch with you directly, what's the best 01:09:21.180 --> 01:09:26.119 way for them to reach you? Absolutely. The best 01:09:26.119 --> 01:09:31.579 place to start is on our website at www .pangen 01:09:31.579 --> 01:09:36.500 .com. capital .com. The information memorandum 01:09:36.500 --> 01:09:38.600 is there to download. We've got a slide pack. 01:09:38.800 --> 01:09:43.720 We've also got webinars that we hold for people 01:09:43.720 --> 01:09:47.239 who'd like to get a quick introduction into the 01:09:47.239 --> 01:09:50.460 fund. And of course, you can contact us. Our 01:09:50.460 --> 01:09:53.319 contact details are on our website as well. So 01:09:53.319 --> 01:09:57.039 more than happy to talk to potential investors 01:09:57.039 --> 01:10:01.279 or financial advisors or family officers. And 01:10:01.279 --> 01:10:04.590 we'd We'd love them to be a part of the fund's 01:10:04.590 --> 01:10:07.210 initial opening because I think we're, you know, 01:10:07.210 --> 01:10:10.210 I'm really excited about this product. I think 01:10:10.210 --> 01:10:13.109 it's offering something genuinely new to the 01:10:13.109 --> 01:10:16.329 Australian marketplace. I mean, professionally, 01:10:16.489 --> 01:10:20.170 I am, you know, I'm really passionate about this 01:10:20.170 --> 01:10:23.569 product. I'm putting, you know, my heart and 01:10:23.569 --> 01:10:26.750 soul into this and a lot of my own funds into 01:10:26.750 --> 01:10:31.250 this along with my joint venture partners. We 01:10:31.250 --> 01:10:35.090 believe in the product. We believe in the timing. 01:10:35.310 --> 01:10:39.010 And we think it's going to be a wonderful product 01:10:39.010 --> 01:10:44.970 that will produce, you know, good, steady, solid 01:10:44.970 --> 01:10:48.970 risk -adjusted returns over the medium to long 01:10:48.970 --> 01:10:51.630 term. And, you know, I think it sort of goes 01:10:51.630 --> 01:10:55.010 back to my philosophy about long -term investing. 01:10:55.210 --> 01:10:58.590 When I was at Unisuper, we were investing people's 01:10:58.590 --> 01:11:01.760 life savings. And we are thinking about it from 01:11:01.760 --> 01:11:04.319 a long term. And that's why we came up with the 01:11:04.319 --> 01:11:07.920 name PanGen Capital, which essentially means 01:11:07.920 --> 01:11:14.060 PanGeneration Capital. We would love our investors 01:11:14.060 --> 01:11:17.140 to be investing with us over the long term for 01:11:17.140 --> 01:11:20.619 their lifetime and perhaps pass on their investment 01:11:20.619 --> 01:11:24.039 to the next generation. So that's really our 01:11:24.039 --> 01:11:27.350 philosophy. Ryan, thank you very much for coming 01:11:27.350 --> 01:11:29.609 on the podcast, The Rate of Change with York 01:11:29.609 --> 01:11:32.170 Wealth Management. Really appreciate your insights 01:11:32.170 --> 01:11:34.250 today and I love what you're doing about helping 01:11:34.250 --> 01:11:38.210 people provide access to institutional grade 01:11:38.210 --> 01:11:40.930 opportunities like this. So thank you very much 01:11:40.930 --> 01:11:42.229 for coming on and I hope you have a great day. 01:11:43.470 --> 01:11:54.000 Okay, you too. Thanks. Bye. Any use of this recording 01:11:54.000 --> 01:11:56.659 does not represent the view of any other third 01:11:56.659 --> 01:11:59.279 party and are the sole personal opinions of the 01:11:59.279 --> 01:12:01.579 speaker. Any reference to financial products 01:12:01.579 --> 01:12:03.699 does not constitute advice or recommendation 01:12:03.699 --> 01:12:06.319 and before any action you should seek proper 01:12:06.319 --> 01:12:09.960 advice from your financial professional. Australian 01:12:09.960 --> 01:12:13.659 listeners should head to www .moneysmart .gov 01:12:13.659 --> 01:12:16.439 .au to find more information on obtaining financial 01:12:16.439 --> 01:12:19.199 advice. To get in touch with York, head to our 01:12:19.199 --> 01:12:23.500 website www .yorkwealth .com dot com dot au