HUB24 deal expedites Reach’s expansion into wealth market
The chief executive of Reach Alternative Investments says the firm is in talks with financial advisers about which products to launch in its strategic alliance with HUB24.
It was announced on 26 September that HUB24 and Reach Alternative Investments entered into a strategic agreement, with HUB24 taking a minority equity stake.
As part of this, HUB24 will collaborate with the team at Reach Alternatives and potentially other industry providers to co-design innovative products and solutions to offer a broader range of alternative investment solutions for advisers and their clients.
Currently, Reach Alternatives provides access for wholesale clients but says it wants to scale the business by integrating with financial advisers to allow them to assist their clients to understand alternatives.
Speaking to Money Management, Reach Alternatives chief executive Sam Phillips said the deal with HUB24, which will be the first platform to list its Global Private Credit Fund, will expedite this expansion.
“We’ve always had a strategy that we want to push this out through the wealth groups. We know that advised clients are seeing all the news about alternatives and people adding them to their portfolios. We are thrilled that HUB24 has validated us, and now we have the chance to really expedite this expansion.”
The firm is keen to launch new products as soon as possible, but said it is important to do due diligence, particularly on these types of funds which can have limited liquidity.
“What we launch will depend on feedback. We are in discussions with adviser groups, asset consultants and with family offices at the moment to make sure what we launch is suitable for them.
“Some want to invest in credit for yield, whereas some family offices or sophisticated investors have more specific requirements and want to invest in infrastructure. It’s about listening to the market and finding out what is desired, and then we will work with HUB24 to build those.
“It can take time but we are working to get this out to market as quickly as we can while making sure they are appropriate products.”
Earlier this month, a report from Praemium, in collaboration with Investment Trends, revealed that 146,000 high-net-worth individuals are currently investing in private markets, with 32 per cent planning to increase their investments in the next year. Additionally, another 32,000 investors are expected to enter the market within the next 12 months.
Asked why this demand has shot up in recent years, Phillips said investors want a way to diversify a portfolio beyond a traditional 60/40 allocation.
“What we've seen since the GFC is that people have found that the traditional 60/40 portfolio has stopped working and they want a better way of diversifying their portfolio through different stages of the market cycle.
"These types of illiquid, unlisted, long-tenured products can take some of that volatility out of your portfolio. If you can bring less volatility into your portfolio, especially for SMSFs, then we may not need that liquidity and it can bring better returns, as has been proven historically, and better decision making."
AUTHOR
Laura Dew
Recommended for you
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
Research by Morningstar has found fixed income funds are bucking a general trend around managed fund fee dispersion with a smaller fee dispersion compared to equity ones.
As investors seek to diversify their portfolios, the naming of bond labels has broadened out to include green, social and impact bonds, according to the annual RIAA report.
