Regal’s Phil King, ex-Macquarie banker Jim Craig and Smorgon heiress Suzi Carp all suddenly want a slice of Pacific Current, Melbourne money’s hottest fund.
If there is one way to get rich in the small financial markets bubble, it is funds management.
Get that relationship right and there are significant riches, particularly for the owners of the funds management businesses. So gun investors set up their own boutiques to retain a larger share of the fees. And they often do it with a silent investor: someone who knows the world of distribution, sales, investor relations and administration.
Regal Partners is cashed up, and keen to grow. It has backed a handful of boutiques in the past year or so and likes the model. O’Connor saw Challenger’s Fidante Partners go down the same path and knows how hard and time-consuming it is to stitch up a bagful of boutiques. Pacific Current is sitting on 16 of them.Sydney-based Regal’s offer includes a 50/50-type funding agreement with Melbourne’s River Capital, Pacific Current’s largest shareholder with a near 20 per cent stake.
GQG is key to the whole thing. It is the pin-up for boutique asset management groups like Pacific Current. Chief stockpicker Rajiv Jain was in a big investment shop, set up his own firm and it has been a runaway success. His stake in GQG is worth about $3.15 billion and GQG CEO Tim Carver is a former Pacific Current managing director.Conflicts and crossover are the nature of Australia’s funds management bubble.
Those outside the industry will wonder what they are all fighting over – like we said, Pacific Current has been largely unloved and under the radar for the past decade. The group owns mostly minority stakes in boutique asset managers, the bulk of which are in North America and invest in things like private credit, public and private equity and infrastructure.
For example, it backed Sydney’s RARE Infrastructure founded by former ABN Amro investment bankers Nick Langley and Richard Elmslie, for nine years before selling to Legg Mason.Of course, with so much horse-trading, Pacific Current today looks much different to what was Treasury Group. The most noticeable is the type and location of its managers.
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