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24 Apr 2023 - Altor Emerging PIPE Fund - Quarterly Webinar Update
Altor Emerging PIPE Fund - Quarterly Webinar Update Altor Capital
Altor Capital is pleased to invite you to the Altor Emerging PIPE Fund's March 2023 quarterly performance update on Wednesday, 26 April at 12:00pm AEST. The webinar will be led by Altor Capital's Chief Investment Officer and Portfolio Manager Benjamin Harrison and there will be an opportunity for investors to ask questions. Date: Wednesday, 26 April 2023 Speakers BENJAMIN HARRISON Ben has extensive experience in advising and investing in companies. He began his career as a project manager for a large international engineering consulting firm and later moved into investment banking then investment management. Ben is a founder and the Chief Investment Officer of Altor Capital. He is also portfolio manager for Altor's private credit fund, the Altor AltFi Income Fund. Funds operated by this manager: |
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21 Apr 2023 - Hedge Clippings | 21 April 2023
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Hedge Clippings | 21 April 2023 This week Treasurer Jim Chalmers released his "independent" Review of the Reserve Bank of Australia and by all accounts he intends to accept all recommendations of the Review's three person expert panel. By and large the panel was broadly critical of the Bank board's structure and governance, with most of that criticism, implied or otherwise, and rightly or wrongly, falling on the shoulders of the RBA's embattled governor, Dr. Philip Lowe. Lowe's been a convenient punching bag for a while now, but in particular, he's copped criticism from those who took as gospel his mid Covid forecast that the then cash rate of 0.1% wouldn't rise before 2024. History of course tells a different story, and hindsight is easy, but Lowe was only echoing what most central bankers were saying at the time at the height of the COVID panic, and before Putin invaded Ukraine. However the expert panel's Review of the RBA went much further than that, and the ramifications will be significant, with the change in the Bank's mandate to take into account both managing inflation and, or while maintaining full employment. In future there will be dual boards, one responsible for governance, and another, whose members will have greater economic expertise, responsible for setting monetary policy. The external Monetary Policy Board will meet 8 times a year, with policy decisions to be more transparent, including a press conference after each meeting. Board members should speak publicly "occasionally" about the work of the Board. Chalmers has wasted no time in appointing two new members of the Board, Iain Ross and Elana Ruben. This is in spite of the Review's recommendation that "External Monetary Policy Board members should be appointed through a transparent process. Positions should be advertised for expressions of interest, drawing on a matrix of required skills and experience. A panel comprising the Treasury Secretary, the Governor and a third party should recommend options for suitable candidates to the Treasurer." We're not doubting Ross or Ruben's skills and experience, but we're not too sure about the transparency, or the positions being advertised for expressions of interest. As for Philip Lowe's reaction to the criticism, implied or otherwise, he was his usual measured self, albeit no doubt through gritted teeth. In the RBA's official release when defending the organisation he heads up, he included this quote: 'The Review Panel rightly acknowledged the substantial contribution the Bank has made to Australia's economic success and the skills and dedication of the staff. It also acknowledged the RBA is highly regarded and respected in Australia and overseas.' He was even more defensive at a press conference later, describing the overall review's finding as "kind of excellent" and saying the panel's comments about the workings of the board "didn't really resonate with me". Lowe's term as RBA Governor is up in September, and although he's offered to continue (if asked), we suspect the writing's on the wall. Meanwhile, tucked into the appendices at the back of the 282 page Review was a list of the 137 people who contacted, or were contacted by, the expert panel. Fourteen were members of parliament, including understandably both the Treasurer and Shadow Treasurer. Of the remaining twelve, two (Costello and Frydenberg) were former Treasurers, leaving eight of the final ten being Independents, including Jacqui Lambie. We're not sure if it's relevant that Pauline Hanson wasn't on the list, but her absence probably didn't affect the outcome of the final report! Overall (Philip Lowe excepted) the Review's findings have been well received, but particularly by Treasurer Jim Chalmers, who having initiated it, accepted 100% of its recommendations. It's a shame he won't take the same approach to the more important reform of Australia's taxation system, starting with his budget due next Tuesday week. |
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News & Insights The Lipstick Effect | Insync Fund Managers Quay podcast: FORA - fear of renting again | Quay Global Investors Why quality matters? | Magellan Asset Management March 2023 Performance News |
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21 Apr 2023 - Performance Report: Bennelong Long Short Equity Fund
[Current Manager Report if available]
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21 Apr 2023 - Innovative companies can conserve and protect our precious water resource
Innovative companies can conserve and protect our precious water resource abrdn March 2023 Water is a precious, finite resource and essential to life on earth. However, progress on establishing universal access to basic sanitation, and encouraging the protection and responsible use of ocean resources is woefully lagging. Every year, International Water Day is marked on 22 March to draw attention to these issues and agitate for change. Efforts to ensure universal access to clean drinking water and basic sanitation are faltering. An estimated two billion people across the globe don't have safe drinking water, and a further 3.6 billion lack safely managed sanitation. We are also degrading the world's water ecosystems at an alarming rate. Over the past 300 years, over 85% of the planet's wetlands have been lost. Increasing acidification threatens marine life, while plastic pollution is choking the ocean. In 2022, we saw multiple extreme weather events across every continent, with severe and devastating storms, droughts and floods. Heavy monsoon rainfall in Pakistan caused flash flooding and landslides, destroying 1.7 million homes, displacing 32 million people, killing 1,700 people and pushing nearly nine million into poverty. Meanwhile, the Horn of Africa experienced the longest and most severe drought on record. Across Somalia, Kenya and Ethiopia, 21 million people now have food insecurity. This includes over three million people at 'emergency' levels or higher, meaning they will go days without eating and have been forced to sell belongings to buy food. With a growing global population, solutions that enable more efficient use and management of water, as well as promote better care of our oceans, are essential to help meet the increasing demand and reliance on our water resources. Within our sustainable funds, but also more broadly in core funds, we look for companies with strong runways for growth. Given the unmet need, companies whose products and services improve access to clean water and sanitation, and improve efficiencies in existing infrastructure, are tapping into significant revenue opportunities. There are also opportunities in companies showing water leadership by minimising water use, or reusing water as much as possible, which should also lower costs. Companies whose products and services improve access to clean water and sanitation are tapping into significant revenue opportunities. So where do we think there are opportunities?One example of a business improving water usage is Tetra Tech, a leading resource management consultant specialising in water services. It helps clients across a range of water-related projects, from water reuse work in Mongolia and addressing water loss in Jordan, to groundwater replenishment and reuse in California. Tetra Tech supports 70,000 projects across 100 countries around water reuse and conservation. These include flood prevention projects, stormwater management, wastewater treatment and managing water supplies. Where possible, the company uses natural solutions, such as the creation of a 'living breakwater' to stabilise the marsh shoreline and support biodiversity in Alabama. It also uses green stormwater infrastructure to transform the way stormwater is managed in Raleigh, North Carolina. Last year, Tetra Tech helped treat, save or reuse 328,000 megalitres of water, while protecting, managing or restoring 178 million hectares of land and water. The company's projects also avoided 20.6 million metric tonnes of CO2e. Another company is DSM, a Dutch business specialising in health and nutritional products. These include food supplements and ingredients containing plant-based fish alternatives. The company offers vegan fish flavouring, as well as algae omega-3 alternatives and natural algal oil for fish feed. Just one tonne of DSM's Veramaris natural algal oil saves catching 60 tonnes of wild fish to produce salmon feed, protecting marine biodiversity in our oceans. Companies whose main business is not water-related can still improve their water management and consumption. Azure Power is just one example. A leading solar power company in India, Azure Power builds and operates some of the largest solar power projects in the country. However, India is a water-stressed nation and solar panels, which attract dirt and dust, require regular washing to work effectively. The company has introduced robotic solar panel brushes to keep water use to a minimum and it also recycles 50% of the groundwater it uses. The company is aiming for net water neutrality this year. Final thoughts…These are just a few examples of businesses taking action. As we see increasing demand and need for solutions, we believe corporates can offer innovative ways to tackle our water needs. In the years ahead, this will be increasingly essential as we work to ensure that life on earth can access clean, safe and plentiful supplies of water and that life in the oceans is protected. Companies are selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance. Past performance is not a guide to future results. Author: Sarah Norris, Investment Director |
Funds operated by this manager: Aberdeen Standard Actively Hedged International Equities Fund, Aberdeen Standard Asian Opportunities Fund, Aberdeen Standard Australian Small Companies Fund, Aberdeen Standard Emerging Opportunities Fund, Aberdeen Standard Ex-20 Australian Equities Fund (Class A), Aberdeen Standard Focused Sustainable Australian Equity Fund, Aberdeen Standard Fully Hedged International Equities Fund, Aberdeen Standard Global Absolute Return Strategies Fund, Aberdeen Standard Global Corporate Bond Fund, Aberdeen Standard International Equity Fund, Aberdeen Standard Multi Asset Real Return Fund, Aberdeen Standard Multi-Asset Income Fund |
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20 Apr 2023 - Performance Report: Bennelong Concentrated Australian Equities Fund
[Current Manager Report if available]
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20 Apr 2023 - Inflation Reduction Act paves way for renewable supercycle
Inflation Reduction Act paves way for renewable supercycle Tyndall Asset Management February 2022 The recently passed Inflation Reduction Act (IRA) is poised to have a significant impact on the US economy, especially in the renewable energy sector. The Act includes provisions that incentivise the growth of the renewables sector, creating a "supercycle" of investment and development. Australia is well placed given our close relationship with the US and our resources of critical minerals vital for decarbonisation. So, what is the Inflation Reduction Act?The Inflation Reduction Act of 2022 (IRA), was enacted into law in August of the same year. It is one of three pieces of legislation that has been passed since 2021 with the goal of enhancing economic competitiveness, innovation, and industrial productivity. The IRA aligns with the priorities of the Bipartisan Infrastructure Law (BIL) and the CHIPS and Science Act, resulting in the introduction of US$2 trillion in new federal spending over the next decade. The IRA encourages investment in renewable energy, enhances energy efficiencies, and helps companies tackle climate change via tax credits, incentives, and various additional provisions. The pathway to decarbonisation is expected to be enhanced since the IRA will increase demand for electric vehicles (EVs), clean technologies, and low carbon materials/construction. The IRA allocates approximately US$394 billion in federal funding towards clean energy, with the primary objective of reducing the nation's carbon emissions by the end of the decade. This is primarily accomplished through a combination of tax incentives, grants, and loan guarantees (see Figure 1). Figure 1: Funding the Inflation Reduction Act (US$b) Source: McKinsey & Company The majority of the $394b in energy and climate funding is dispensed in the form of tax credits. Corporations are the largest beneficiary, receiving an estimated $216b worth of tax credits. This funding mechanism is aimed at increasing investment in clean energy, transport, and manufacturing in the US. Consumers can take advantage of roughly $43b of these tax credits by investing in EVs, energy-efficient appliances, rooftop solar panels, geothermal heating, and home batteries (see Figure 2). Figure 2: Selected tax credit modifications in the IRA Source: McKinsey & Company Many of the tax incentives offered by the IRA come with conditions related to domestic production or procurement. For instance, to receive the full EV consumer credit, a certain percentage of the critical minerals in the vehicle's battery must either be recycled in the US or sourced from a country with a free-trade agreement with the US. The battery must also have been manufactured or assembled in the US. Europe powers up in response to IRA clean energy push The European Green Deal established in December 2019 was set up to make Europe the first climate-neutral continent by 2050. The goal of reducing net greenhouse emissions by at least 55% by 2030, compared to 1990 levels, is a bold target. The REPowerEU Plan was launched in response to the Russian invasion of Ukraine, with the purpose of hastening the transition away from fossil fuels and mitigating the economic effects of rising natural gas and electricity prices. As anticipated, the European Union (EU) has raised concerns that the US IRA will lure investment in crucial green economy manufacturing away from EU-based companies. In response, the European Commission (EC) has introduced a new "Green Deal Industrial Plan" aimed at fostering an environment that attracts net-zero investments by supporting EU manufacturing of green technologies and products. This plan explicitly mentions photovoltaic cells, heat pumps, wind turbines, hydrogen electrolysers, batteries, and carbon capture. Despite its grand ambitions, the Green Deal Industrial Plan has yet to be fully fleshed out, as very limited additional funding has been proposed at this stage and the plan has not yet been discussed by the member states. The plan is built around four key elements: (i) a simplified regulatory framework, (ii) better access to funding, (iii) upskilling, and (iv) open trade to strengthen supply chains. At present, the EC's primary proposal is to loosen its stringent state aid constraints until 2025, allowing member states to match incentives from other countries (eg. USA). The expectation is that further incentives and improvements to the plan will emerge with negotiations and discussions with the member states. Supply chains will shift Car makers in the US will need to eventually eliminate China from their supply chains. POSCO Chemicals and Samsung SDI recently signed a 10-year cathode supply deal, showcasing the shift towards supply chain re-organisation. Value chains will migrate toward the US or nations with trade agreements in place (e.g. Australia and South Korea). Since the passage of the IRA, several clean ammonia projects have been announced, nearly all located on the US Gulf Coast. The attractive IRA tax credits for hydrogen are driving the growth in ammonia production. For example, Linde has committed US$1.8b to supply clean hydrogen to OCI NV's greenfield blue ammonia project in Texas. This is an example of two non-US companies taking advantage of the IRA by developing projects in the US. Ford will invest US$3.5b in an EV battery plant in Michigan with technology support from CATL, the world's largest EV battery manufacturer. The factory is due to open in 2026 and will produce enough batteries for 400,000 EV's a year. Low carbon technology is mineral intensive Low carbon technologies and enabling infrastructure are significantly more mineral intensive compared to traditional fossil fuel technologies. For instance, an onshore wind plant requires nine times more mineral resources than a gas fired power plant (see Figure 3), while an EV requires six times the mineral inputs of a conventional car (see Figure 4) according to the International Energy Agency (IEA). Both the IEA and World Bank warn that current mineral supplies and investment plans fall far short of what is required for these technologies to reach their full potential. Figure 3: The mineral intensity of low carbon energy (kg). Source: IEA, Credit Suisse Figure 4: The mineral intensity of low carbon transport (kg) Source: IEA, Credit Suisse Implications for Australia The current trend sees nations competing to secure supplies of critical minerals required for global decarbonisation. In many ways, it is starting to resemble a global renewables trade war that will be fought both in technology and supplies of critical minerals. It is obvious that China will react to the IRA and Europe's Green Deal. China has been strategically acquiring supplies of critical minerals through investments in Australia and Africa, as they are the largest manufacturer of wind, solar, and batteries. As we mentioned in a recent article, an instance of a nation's efforts to secure the development of critical minerals can be seen in the Australian Federal government granting a non-recourse loan of $1,250m to Iluka Resources to develop the Eneabba Rare Earths Refinery in West Australia. The funding is from the Commonwealth Government's $2b critical minerals facility. Additionally, lithium-boron develop Ioneer has been one of the early beneficiaries of the IRA, with the US Dept of Energy (DOE) offering a conditional US$700m loan for approximately 10 years to develop its Rhyolite Ridge project in Nevada. Australia is in a pivotal position given it has a free trade agreement with the USA and is also rich in resources of critical minerals. The IRA - and perhaps eventually the new Green Deal in Europe - support our view that we are entering into a renewables supercycle that will keep the prices of critical minerals elevated for many years to come. Author: Brad Potter, Head of Australian Equities Funds operated by this manager: Tyndall Australian Share Concentrated Fund, Tyndall Australian Share Income Fund, Tyndall Australian Share Wholesale Fund Important information: This material was prepared and is issued by Yarra Capital Management Limited (formerly Nikko AM Limited) ABN 99 003 376 252 AFSL No: 237563 (YCML). The information contained in this material is of a general nature only and does not constitute personal advice, nor does it constitute an offer of any financial product. It does not take into account the objectives, financial situation or needs of any individual. For this reason, you should, before acting on this material, consider the appropriateness of the material, having regard to your objectives, financial situation, and needs. The information in this material has been prepared from what is considered to be reliable information, but the accuracy and integrity of the information is not guaranteed. Figures, charts, opinions and other data, including statistics, in this material are current as at the date of publication, unless stated otherwise. The graphs and figures contained in this material include either past or backdated data, and make no promise of future investment returns. Past performance is not an indicator of future performance. Any economic or market forecasts are not guaranteed. Any references to particular securities or sectors are for illustrative purposes only and are as at the date of publication of this material. This is not a recommendation in relation to any named securities or sectors and no warranty or guarantee is provided. |
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19 Apr 2023 - Performance Report: Airlie Australian Share Fund
[Current Manager Report if available]
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19 Apr 2023 - Performance Report: Bennelong Australian Equities Fund
[Current Manager Report if available]
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19 Apr 2023 - Quay podcast: FORA - fear of renting again
Quay podcast: FORA - fear of renting again Quay Global Investors March 2023 Chris Bedingfield speaks with Bennelong's Holly Old about the future of house prices in Australia, the fear of renting again, and what history has taught us about the next global crisis. "FOMO, fear of missing out, has changed to FORA, which is fear of renting again. And I think that's what's caused a bit of the supply strike that's happening. And there's a very bearish narrative in the residential commentary at the moment... but I think when you really look at it from a logical and a cool perspective, it's probably not as bad as people say."
Funds operated by this manager: Quay Global Real Estate Fund (AUD Hedged), Quay Global Real Estate Fund (Unhedged) The content contained in this audio represents the opinions of the speakers. The speakers may hold either long or short positions in securities of various companies discussed in the audio. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the speakers to express their personal views on investing and for the entertainment of the listener. |
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18 Apr 2023 - Performance Report: 4D Global Infrastructure Fund (Unhedged)
[Current Manager Report if available]