Orchard looks for room to grow
Orchard Funds Management plans to have three centres of operations as part of a global push planned for next year.
Chief executive officer David Hinde told Money Management the fund manager was close to signing a joint-venture agreement with a US property manager to cover North American investments.
“We want to establish three key centres for our funds management business — Australia, Europe and the US,” he said.
“We already have Australia and Europe in place and we are close to signing a joint-venture agreement in the US, which will be a 50/50 partnership.”
Hinde said the reasoning behind the global expansion was Australia had become an overcrowded market for property managers.
“Australia is about 2 per cent of the global property market, with sales of between $10 to $15 billion a year,” he said.
“Europe has property turnover of between $200 to $250 billion a year, while the US is between $250 to $300 billion.”
Hinde said while there were still opportunities in the Australian market to add new properties to its funds, it was getting harder.
“One of our disciplines is to find assets that we will hold for five to 10 years in a portfolio, and that will deliver value,” he said.
“However, where properties are over-valued in the portfolio, we will trade them, such as two recent sales in Brisbane.”
Hinde said the Orchard Diversified Property Fund will remain the flagship fund in Australia, but the fund manager now has plans to create a similar fund in Europe.
“We will launch a wholesale European Diversified Property Fund, which will be open to Australian wholesale investors,” he said.
“But the funding of the European business will not be wholly-dependent on Australia, as we will be raising funds from both there and the US eventually.”
Hinde expects the joint venture to be signed before Christmas, and once the US operation is up and running the plan will be to raise capital locally for investing in the US.
Again, European and Australian investors will be able to invest in funds launched there, with the first fund probably having a retail focus, he said.
Orchard is still on track to list in Australia next year, but he admits the timing will depend on market volatility.
“Our aim is to list before the end of the first quarter next year, but that will depend on the state of the market,” Hinde said.
AUTHOR
Recommended for you
With HNW investors representing the largest market for alternative assets, Praemium and CoreData research underscores why this presents a compelling opportunity for advisers.
Having completed the successful integration of Diverger, Count has upgraded its forecast for expected synergy benefits achieved by the acquisition by a third.
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
Iress has increased its forecast adjusted EBITDA by $5 million for the 2023/24 financial year in light of the sale of its platform business to Praemium and hinted at a return to dividend payments.
