ABOUT

Kennedy Partners is an independent, boutique, private investment advisor. We offer tailored and objective wealth management services aligned to the specific needs of each client. We advise and implement based on solutions, not products, leveraging our many decades of global wealth management experience.

Our clients are ‘wholesale’ or sophisticated investors who may be investing as individuals or through a trust, company or self-managed superannuation fund. We also assist with the investment needs of family offices, foundations and not for profits.

The focus of our investment strategies is:

  • To identify and implement wealth creation opportunities to achieve the highest returns on a risk adjusted basis
  • To fully understand the needs of our clients and establish a long term financial partnership.
  • To maintain an asset allocation strategy which takes into account the cyclical nature of markets.

To achieve our clients’ goals we have partnered with a number of key service providers who combine to offer secure, efficient and high–performance wealth management solutions.

SERVICES

Your solutions

Asset Allocation – Key to Long Term Outcomes

Kennedy Partners assists clients in managing part or all of their investment portfolios. Our asset portfolio diversification and investment performance encompass all major global investment asset classes and currencies.

Equities

Management of client equity portfolios can often be highly individual due to historical shareholdings, investor preferences, tax, or other personal reasons. We are able to help clients manage equity portfolios with a tactical focus including the use of margin and options. We can also assist when a more passive approach is appropriate.

Fixed Interest

We advise and facilitate investment across the corporate capital structure, including hybrids, corporate and government bond in both domestic and global markets. Our structure allows us to offer clients fixed interest opportunities listed on the ASX and institutional access to OTC (over the counter) bonds.

Asset Backed Security Portfolios

A key contributor to portfolio diversification and investment performance is access to high yield investments. We can construct client portfolios over time considering an individual’s liquidity needs and risk appetite. We have privileged access to transactions provided by experienced and successful operators.

Alternative Investment Opportunities

Our experience and reputation provide us access to a diverse range of alternative investment opportunities. Those we consider high quality and provide an adequate risk adjusted return may be recommended to clients. These include private equity, pre-IPO funding, syndication opportunities and unlisted funds.

Kennedy Partners Benchmark Asset Allocation

Our Risk Management Process

We implement a multi asset class approach to manage risk. This allows for the provision of an appropriate level of income and growth opportunities. Our approach to each asset class is illustrated below:

Our Portfolio Management Process

Management of client equity portfolios can often be highly individual due to historical shareholdings, investor preferences, tax, or other personal reasons. We are able to help clients manage equity portfolios with a tactical focus including the use of margin and options. We can also assist when a more passive approach is appropriate.

We manage direct equity model portfolios using both domestic and international equities and utilise external managers for specialised allocations – such small/micro-cap exposure and emerging markets. This may be through managed funds, listed investment companies (LICs) or Exchange Traded funds (ETFs).

Tailored Equity Portfolio

The Kennedy Partners direct equity portfolios are tailored to the individual client risk/return profile, typically consisting of 15-20 companies. We believe our approach on focusing on quality businesses is conservative and repeatable and will deliver superior, long-term outcomes to clients.

Asset Allocation is widely accepted as the dominant driver of investors long term returns. It is critical that the underlying portfolio is populated in a manner consistent with asset allocation decision. The portfolios must also be constructed to be consistent with risk/return profile of the investor. For example, a conservative asset allocation that holds high growth, low yield companies in the equity portfolio would be counterproductive and not reflect the client profile.

Why Direct Large Cap Equities

We believe clients will be rewarded over the long term by having a core direct equity holding as part of their portfolio construction. This is particularly relevant when considering the large cap allocation in a client’s portfolio.

Key advantages include:

Transparency of Fees – with a direct investment you know the fees being charged and net performance. In managed funds there are layers of fees, management fees, spreads and sometimes transaction costs that are paid when funds are bought and sold.

Flexibility – direct investments allow investors to buy, sell, add or trim to specific investment as needs or opportunities arise, much faster than structures and in smaller or larger units to meet liquidity requirements.

Risk Management – having direct line of sight of the company you are invested in rather than an opaque structure allows the adviser and investor to assess risk quickly. In times of market volatility, a portfolio risk and return profile can materially amended to the investment conditions.

Tax – gives client control and management of their tax situation – franking credits, discounted capital gains and offsetting realised losses and gains.

Stock Selection Process

The stock selection process driven by the desire to invest in quality businesses, in good industries, strong management, with robust balance sheets, at attractive valuations.

Research Access

Kennedy Partners have access to high quality research from a range of providers – domestic and international across asset classes. The access to research allows Kennedy Partners to have a clear understanding of market expectations and where the risks are in earnings and strategy execution by management. Research that is overtly bullish or bearish will reviewed in detail to identify outlying opportunities or risks the market possibly is not valuing accurately.

Business Quality

A high-quality business has an identifiable and understandable ‘moat’ or set of competitive advantages. These competitive strengths can include superior product or service quality; an esteemed brand and reputation; a corporate culture that attracts and retains the best people; scale; distribution strength or proprietary technology.

We also look for businesses that are resilient such that they remain profitable during periods of economic stress. Businesses that lose money in economic downturns are often forced to sell assets or raise equity in order to survive.

Valuation

Valuation method can vary depending on the company industry sector and key attributes. Typically, a starting point based on standard valuation methods such as Discounted Cash Flow (DCF) and Sum of the Parts (SOPT).

Strong Management

Management experience, trustworthiness and competence are key. Management perform critical roles as custodians of the company franchise, culture and capital. We look at the longevity and turnover of key management positions; the track record of clear and transparent communication with the market and ensuring management are driving positive corporate culture.

Momentum

An anomaly of financial markets and companies is they tend to display momentum, positively and negatively. Management and companies announcing positive outcomes are more likely to continue to do so. Alternatively, a company that downgrades is unlikely to turnaround quickly and further downgrades of expectations are more likely. This momentum is also prevalent stock prices – share prices tend to go a lot higher/lower than investor expectations. There are several reasons for this anomaly – but a key one is that humans tend to over extrapolate the current conditions. One year believing the bad times will last forever, and next the bull market will never end!

Typical Themes

Industry Leaders – durable, strong and generally larger companies with world class privileged market and competitive positions. (ASX, BHP, CSL & Resmed)

Income Focused Equities – companies with secure low-volatile dividends that can be grown and capture inflationary over time. (Transurban & ASX)

Asset Plays – stocks with strong or improving balance sheets trading at discounts to net asset value or replacement value. (Lend Lease)

Growth Companies – growing companies with identifiable value propositions using traditional value metrics run by focused, prudent and experienced management. (Goodman Group, Macquarie Group, Worley Parsons)

Australian Equity Balanced Portfolio Report January 2020

International Equity Portfolio Report January 2020

 We have been managing Alternative Investment portfolios for clients since 2011, Initially as Specialist Investment Management and as Kennedy Partners since 2016. 

Alternative Investments tend to be available only to wholesale investors as private transactions and are not traditional investments such as equity, fixed interest, cash or direct property. Since the financial crisis in 2008 it has often been possible to achieve better risk return outcomes in the private markets than in public markets in Australia. 

We aim to provide our clients with a flow of high quality transactions which enable them to build portfolios tailored to their individual requirement for risk, liquidity and return. 

It can typically take 12 to 18 months to establish a suitably diversified portfolio of Alternative Investments as there may only be one or two transactions available at any one time.  

  • We either manage transactions ourselves or enter transactions managed by a specialised manager. We only use a small number of highly specialised managers 
  • Each client’s assets are managed in a separate account and not pooled 
  • We can offer discretionary or non-discretionary investment mandates 
  • Full web-based reporting plus year-end tax reports 
  • Clients’ Alternative Investments are generally managed as part of a broader portfolio including more traditional fixed interest securities, Australian and international equities

 We are seeking diversification in our alternative client portfolios and categorise the assets into three buckets: 

1. High Yield 

To us high yield is any fixed interest type security that has an expected return significantly in excess of traditional fixed interest securities. A number of these deals have closed and returned all capital to investors as well as a return of between 9.7% p.a. and 35.66% p.a. Most of these investments are backed by assets such as mortgages or consumer receivables. 

2. Property Related 

Property Related investments are wholesale unit trusts which have various types of property as the underlying asset. They can be in the form of equity, preferred equity or debt. As the property cycle has matured our investments returns have reflected the increasingly lower risk nature of transactions we have invested in for our clients. 

3. Equity 

Alternative equity investments are investments in unlisted companies that are expected to achieve high growth generally over a two to five year period. These investments may be held by us directly for clients or managed by a specialised manager or venture capital firm. 

In all cases these transactions have been available to wholesale investors only. Participation through Kennedy Partners has enabled clients to gain access to transactions for less that the stated minimum investment amount. This is because we make one investment for our clients. 

An example is our investment in Auscred Pty Ltd (Lendi) which is Australia’s largest online mortgage broker. Our original investment was made in December 2017 at a price of $71.47 per share. Lendi has raised funds subsequently at $98.99 per share from the ANZ Bank and other investors. 

Performance 

We have offered 50 separate transactions to our clients in the three investment groups: 

Equity 13
High Yield 13
Property Related 24

We have experienced no losing transactions since commencing business. 

The chart below shows the value of $1,000 invested by a client in a Kennedy Partners Alternative Investment portfolio. Returns differ from client to client as each portfolio is different depending on the client’s investment preferences and security selection. The portfolio returned 13.38% pa before performance fees. 


Fixed interest investments can play an important role in most client portfolios and the high yield investments described above may form part of a fixed interest strategy. In addition we can facilitate investment into more traditional corporate and government fixed interest securities in both domestic and global markets. An area of interest in the past few years has been mortgage backed debt which has been particularly sensitive to changing economic conditions. 

OUR PEOPLE

Meet our professionals

PETER KENNEDY

Chairman

Peter is the founder of Kennedy Partners and has had more than 30 years financial markets experience in equities, derivatives and investment management.
In 2011 Peter founded Specialist Investment Management Pty Ltd (SIML) servicing wholesale investors in high yield fixed interest instruments, equities and derivatives. In 2016 the company commenced operations under the name of Kennedy Partners. The change of name recognised the evolution of the company to include a larger number of advisors and their clients. Since 2016 the Company has offered a broader range of asset classes and asset allocation to clients.

EVELYN VERTZAGIAS

Head of Wealth Management

Evelyn has 30 years’ experience in banking, private banking and wealth management gained in Hong Kong and Sydney. Her focus is to provide holistic investment advice to high net worth, family office and not for profit entities with particular expertise in offshore and multi-currency investing.

Evelyn holds a SAB (Solicitors and Barristers Admission Board)/LPAB Diploma in Law in association with the University of Sydney, a GAICD from the Australian Institute of Corporate Directors and has completed the Asset Management Program at Wharton.

TIM BOWERS

Chief Investment Officer

Tim has more than 15 years of finance experience in equities, derivatives and investment management.

Prior to joining Kennedy Partners Tim was Investment Manager at a single family office and later an Investment Advisor advising clients on Asset Allocation, Investment Strategy and Portfolio Management.

He has particular expertise in Australian equities and is responsible for advising on stock selection for Australian Equity portfolios.

Tim holds a Bachelor of Business from ACU and a Graduate Diploma in Applied Finance and Investment.

PETER WEBSTER

Advisor

    Peter has over 20 years’ experience in the financial services industry in both Australia and New Zealand including wealth management, managed funds and financial planning. Roles have included compliance, administration, operations management and advising clients for companies including Merrill Lynch, Morgan Stanley and Tower Managed Funds.
    Peter holds an Advance Diploma in Financial Planning.

    RUNE HENRIKSEN

    Chief Operating Officer

    Rune has worked in accounting and finance for more than 20 years both in Australia and Europe with substantial experience in financial services. Prior to joining Kennedy Partners, Rune was the COO/CFO at a boutique investment management and advisory firm focusing on the alternative asset space.

    Rune holds Bachelor of Business degrees in Accounting and Business Administration and is a member of the Chartered Accountants Australia & New Zealand and a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW). Rune also holds a Graduate Diploma of Applied Finance.

    SUSANNE FULTON

    Investments Operation Manager

    Susanne commenced her professional career at Grant Thornton Australia in 2015 before joining Kennedy Partners in 2018.

    Susanne holds a Bachelor of Business degree from UTS Sydney majoring in Accounting and Finance and a Masters of Project Management from the University of Sydney.

    CONTACT

    • +61 2 9251 0026
    • admin@kenpartners.com.au
    • PO Box R370, Royal Exchange, NSW, 1225
    • Level 27, AURORA PLACE, 88 Phillip Street, Sydney, NSW, 2000