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Affinity Insights – Issue 6, November 2018

Issue 6, November 2018

From the MD's Desk

By Rodney M. DeGabriele – Principal & Managing Director 

Welcome to Affinity Insights!

As we all enjoy the transition into longer and warmer spring days, we are excited to let you know that we have officially moved into our new office space, located at Level 5, North Building, 333 Collins Street. Our email, phone and postal details all remain the same should you need to contact us. We are all very much looking forward to welcoming you into our larger, brighter and more modern office space.

In this month’s Affinity Insights, we would like to introduce George Gabriel from Bletchley Park Capital, who has begun to work closely with us. George provides us with his knowledgeable insight on the market outlook, portfolio construction, and provides individual stock analysis.

We are pleased to acknowledge the impressive achievement of our client Carol Matthews, who has been awarded the 2019 Victorian Local Hero Award. Carol has been recognised for her tireless efforts in advocating for emotional readiness to be included in bushfire preparation, as well as for her work as lead litigant in the class-action for bushfire survivors. 

We also recently received useful insights during our Platinum Asset Management Lunch with Investment Specialist Julian McCormack. Julian discussed how Platinum is seeing the world, particularly investing into the Chinese Market. After 10 years of recovery Platinum believe there are still plenty of well-priced opportunities in the market.

You can read more about these events below.

We do hope you like this issue of Affinity Insights, and we welcome any feedback or suggestions for future topics.

Introducing George Gabriel

George brings 20+ years of commercial investment advisory and analysis experience to our investment advisory capability.

Previously, he was an equities analyst advising institutional fund managers, and worked at Credit Suisse and Deutsche investment banks.

George is currently the Managing Director of Bletchley Park Capital, which provides investment strategy advice to investors, and corporate advice to emerging companies. George works with us to provide further insight into our view on the market and portfolio construction. 

2019 VIC Local Hero Award

Ms Carol Matthews 

Affinity Private Advisors would like to congratulate our client Carol Matthews for her 2019 Victorian Local Hero Award. In 2009 Carol’s home was destroyed and she lost her 22-year-old son Sam in the Black Saturday bushfires. Following these devastating events, Carol acted as the lead litigant in the biggest class-action in Australian history, securing a record $500 million settlement for those who lost loved ones. Carol is continuing her activism, through turning her attention to prevention, starting a project to transform a bus into a sensory experience of a fire, to teach people how to react under pressure. Carol is still seeking funding to complete the bus and donations are greatly appreciated. We would like to congratulate Carol on her well-deserved award and thank her for her dedication to improving the lives of fellow Victorians.

You can read more on Carol’s story via the two links below:

Page 5: Moreland Leader

Australian of the Year Honour Roll

Briefing with Julian McCormack

Investment Specialist at Platinum Asset Management

Will the US Outperform Forever?

Julian McCormack joined Platinum Asset Management as an investment specialist in 2014, after working as an investment analyst, and as an equity researcher in metals and mining, before moving onto founding a private company in resource exploration.

With this extensive knowledge Julian was perfectly placed to offer insightful knowledge to all those who attended the “Will the US outperform forever?” Platinum Lunch. With Platinum investing more money in China than any other single country and believing that equity markets in Germany, Japan and South Korea are cheap, Julian provided and discussed Platinum’s reasoning for this decision.

Julian explained how Platinum is seeing the world differently by investing into the Chinese Market, whilst many other equity managers continue to hold more than 50% of their portfolio in US domiciled companies. Julian talked positively that after 10 years of recovery there are still plenty of well-priced opportunities in the market.

Labor’s Proposed Franking Credit Policy

Labor has proposed a policy that would result in SMSFs and other low paying tax entities no longer being able to receive a tax refund for the franking credits they receive. This has the potential to affect all SMSFs that own Australian shares, especially funds that have received tax refunds in recent years.

The following is one example of how the franking credit policy proposal could affect SMSF trustees.

Example:

A couple, both aged 70, own their own home and have $3,250,000 in superannuation.

The following simplified asset allocation illustrates the role refundable franking credits play in their retirement income and the negative effect on their income that the Labor proposal would have:

 

Asset Allocation Income % Income $
Cash $250,000 2.5% $6,250
Managed Investments $2,000,000 4% $80,000
Shares $1,000,000 4.5% $45,000
Franking Credits $19,350
Current Income $150,600
ALP Proposal Income $131,250

In the Media

The Revolutionary technology preparing kids for the changing world of work  

By Catherine Robson

Co-founder and CEO of education tech startup BEcoME, Liv Pennie is helping kids design their happiest possible future and challenging the idea that there’s a single answer to the question – what do you want to be when you grow up?

Liv took the leap from an 18-year career in advertising and product design to tech entrepreneur, to help kids as young as 9 shape their ideal career destiny by using technology. Liv talked to Catherine Robson about the future of work, her tips for finding the right co-founder and how not to waste time in early funding rounds.

Read More