00:00:00:04 - 00:00:27:00

Unknown

Standing by via Skype with some ultimate investment opportunities out there. Welcome back to the program. Look, take a gulf. We really quickly. The Federal Reserve last night really had a big move in markets. What do you make of it? I actually thought the reaction to the Fed's movement was fairly muted. David, given that clearly they've moved into a much, much slower rate of increases, too, to Right.

00:00:27:23 - 00:00:48:11

Unknown

Clearly, it shows the markets were fully anticipating only 25 basis points. But I was actually a little bit surprised at the lack of volatility compared to what we've seen. And maybe it's a bit of a function of how strongly listed markets start the year. People who want to wait and see now are really obviously concerned about how much the US economy is going to slow.

00:00:49:03 - 00:01:13:12

Unknown

Concerns around most major developed economies and how much are they going to. It's going too slowly. So I think I think at least the markets might move towards a bit of a wait-and-see approach. Now, obviously, closely watching inflation data and seeing how these smaller central bank movements start to play out. What we're seeing also is that bond yields are certainly on seek around the world and term deposit rates here are likely as well.

00:01:13:18 - 00:01:30:22

Unknown

I don't really catch up with the other tightening cycle we're seeing from the RBA, which means that for those investors who are trying to position for a potential pullback in this inflationary pressures and some safer, more stable investments, what are some of the areas in the private markets right now that he can point to as offering decent opportunity?

00:01:32:04 - 00:01:52:17

Unknown

Yes, interesting point, David. One thing we've really noticed is that the shorter term deposits, if you look at the sort of 1 to 3-month term deposits, they've stayed remarkably low given we've got a cash rate of 3.1%. You know, when I look across major bank term deposits, they seem to be kind of between one and a half and 2% for a three month.

00:01:53:06 - 00:02:14:15

Unknown

Right. When we've got a cash rate that's well, well above that. So so yeah, it's sort of counter that to some extent. We just recently launched a conservative fund really for the purpose of investors that are willing to take a little bit more risk, but they're looking for an investment opportunity that has a very, very strong liquidity term.

00:02:14:15 - 00:02:36:23

Unknown

So that particular fund has liquidity twice a month. So it's obviously not a government-guaranteed term deposit by any means. However, it does hold some cash and it does hold some deposits within the fund and then it obviously will hold some private credit, some very high-grade private credit. And that's where the yield gets a slightly stronger outcome.

00:02:36:23 - 00:02:59:05

Unknown

So I think definitely the private markets are coming up with ways to help investors who kind of want very strong liquidity terms but are happy to take a little bit more risk and get a return in an environment where they probably don't want to necessarily lock into a slightly bigger term deposit right. Where they've got to go out six or 12 months to achieve that.

00:03:01:01 - 00:03:22:00

Unknown

When you say conservative, what kind of yield can you expect to get on your investment? Yeah, we're targeting around the three, two, three, 3 to 3 and a half per cent yield on that kind of solution. So it's obviously a very high-grade type of solution. So you're kind of achieving that kind of yield at that 3 to 4% type range.

00:03:22:13 - 00:03:48:22

Unknown

However you are, you're not locked in for four, or three months and you're actually receiving twice monthly distributions. So so we're trying to solve for that investor demand of high liquidity terms a couple of times a month and also receiving in distributions really frequently a couple of times a month for investors that want to stay very, very short, short term in their investment approach.

00:03:50:10 - 00:04:08:06

Unknown

Now. That's good to know. Look, one thing I want to finish off with is just talking about property-linked investments at the moment, particularly in the tourism-related space, because we've seen that the listed tourism plays in the local market have been absolutely flying recently. We got to look at the private market opportunities. Conceivably there should be a lot of opportunities out there.

00:04:08:07 - 00:04:47:13

Unknown

How is that looking at this point in time? Yeah, that's definitely a place where we're active. We were very active last year, I would say, in sort of regional hotel opportunities and that's played out very well. And we have seen a lot of publicity around the increased values in pub-style assets. We've also turned our focus towards regional accommodation opportunities, which speaks to your comment, David, and that is particularly where in the environment, where some of the operators of regional motel accommodation, largely mums and dads mostly have gone through a very, very difficult couple of years.

00:04:47:13 - 00:05:14:15

Unknown

They've obviously gone through kind of a lockdowns COVID reopening and in some of these kinds of owner-operators are probably just looking to move on and, and take some types of money off the table and potentially similar assets. So that's definitely a place in the private markets where we see quite a unique opportunity. It's a unique opportunity because we can take exposure to the operating company which is the motel itself.

00:05:14:22 - 00:05:26:19

Unknown

And, also, I mean, they're all in the land, so there's some potential land depreciation over the longer period as well. So that regional accommodation is definitely an interesting, interesting opportunity for the alternative investor.

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