Meet the Manager – Blue Sky Alternative Investments
20 Dec 2017
Last Thursday (30th November, 2017) we were fortunate enough to attend the BlueSky Investor Day at the Brisbane Convention Centre. Not only were the guest speakers of the very highest quality but also it reinforced to our investment committee that Blue Sky continues to exceed its goals and is on track for another solid year.
We have invested a portion of our managed discretionary and client portfolios’ in both BlueSky Alternative (ASX Code: BAF) and BlueSky Limited (ASX Code: BLA) since 2014. At the time, BLA was approximately $2.30 and BAF listed on the exchange at $1.00. Today, BLA is approximately $13.50 after reaching a short-term peak of $15.00 and BAF is approximately $1.23.
Most importantly our view was reinforced that BlueSky continues to exceed its own goals and market expectations and is on track for another solid year. We will continue to allocate to alternative assets as part of a disciplined investment strategy.
To recap alternative assets typically include:
- Private Equity (i.e. Wild Breads, Beach Burrito, Vinomofo)
- Real Assets (i.e. water, agricultural investments)
- Private Real Estate (i.e. student accommodation, retirement villages)
- Hedge Funds
The guest speakers were of the highest quality and provided a wealth of knowledge and information. Most notably, Bernard Salt (demographer) and Professor Rawi Abdelal (Harvard).
Bernhard sees a real opportunity for Australia to be leaders in the agricultural sector, but he was concerned that we are conceding sovereignty to other countries. He believes that our lifestyle, culture and climate is what sets us apart from other nations and he feels as though nations like China will continue to consider Australia as a destination to immigrate to after they make their wealth in their ‘home’ country.
Professor Rawi has presented for three years running with the title of his presentation always being “The State of the World”. His research focuses on the politics surrounding globalisation and the political economy. He once again provided some interesting insights as to how he sees the global political landscape potentially unfolding over the course of the year ahead. Briefly his thoughts were:
- More recent US tensions with Russia were of concern but believes there was no conspiracy on last year’s US election. He wouldn’t be surprised if Russia is holding “select” information on Trump.
- He believes there is a “No Win” situation on North Korea if the US was to choose military action. He believes that President Trump is either “bluffing (with military action) or he has lost his mind” – more than likely the former.
- He expects Japan and South Korea to become nuclear powers to ward off aggressors (like what North Korea has done).
- In the US they are experiencing inequality between the high income and low-income wage earners. He mentioned that the last time we saw the greatest income inequality in the US was in 1929.
- Every generation (US) usually does financially better than the last, until now whereby only 50% of children are obtaining incomes better than their parents – this has dropped significantly over the decades.
- Resentment comes when the rich stay rich and there is no opportunity for the poor to achieve wealth
Following the morning session, we spent the afternoon meeting with the management of Blue Sky’s underlying investments. As an example, Thr1ve (health focussed food), Vinomofo (online wine retailer), Wild Breads (fast growing wholesale bakery), various Agricultural businesses, Origo Education to name a few.
Nearly 1800 people attending the Blue Sky investor day. I would encourage clients to attend next year’s investor day because I think you will find it very insightful. The investment committee will continue to provide you with updates of our investment within the portfolios that we manage and any another future “Meet the Manager” interactions.