Julia Seymour:
Income asset management, one of Australia’s fastest-growing financial service companies in the defensive asset sphere are providing investors with market-leading fixed income and bond products through its scalable and adaptable technology. To tell us more, I’m joined by IAM’s Executive Chairman, John Nantes. Welcome John.
John Nantes:
Thanks for having me. Much appreciated.
Julia Seymour:
So John, tell us about IAM. What makes it so unique?
John Nantes:
From our point of view, IAM is one of the fastest-growing financial services companies in Australia. We have $3 billion in funds under advice, across cash, bonds and fixed income. We’ve built out a debt capital market business that’s growing sort of rapidly as well as our own funds management business. And we’re sort of underwritten by our own trustee business. When you put all those businesses together with an interest rate environment, that’s really moved an inflation environment that’s really moved. We are extremely well placed in this type of marketplace to offer our types of products and services to stock brokers, advisors, instos, high net worths, sophisticated investors, and many more, particularly in a time where yield’s back and it’s very important to solve that in a way that you’re getting your best outcome from a return point of view and a risk point of view as well.
Julia Seymour:
And how exactly does IAM accomplish its asset investment solutions?
John Nantes:
So we have many sort of facets to our business model. So firstly, we have a cash solution business which manages cash for our clients. We have about $1.7 bill that we advise upon across 50 ADIs that we can offer. So that in itself is a unique proposition where investors are looking for better yield in cash and TDs and they want to do that efficiently and that’s a very sort of important annuity stream growing business for us. We also introduced a fixed income and bond business only sort of a year and a half, two years ago, and that’s accelerated. That’s gone to about $1.3 bill in funds under advice really quickly, we have our own model portfolios within that we have over 1300 clients and sort of 12 months ago, 18 months ago, we were pretty much at nil. So we’ve really accelerated in our fixed income and cash business.
Additionally, our debt capital market business where we bring sort of companies who need debt to those who actually have cash looking to deploy it for yield together closely and quickly is thriving. The market has really moved in the debt capital market space. For many years if you want to raise capital it was equity or equity, whereas now debt is back and it’s a very good tool for many sort of sub 500 companies, $500 mil companies that we look after and it’s really taking off. Additionally, we have our own funds management solution to provide clients where they’re looking for example, an eight to 10 per cent yield managed appropriately managed within the risk parameters. And lastly, we have our own trustee business, which is profitable that actually helps us fulfill under a lot of those businesses efficiently and effectively and most importantly in the most compliant way that you’d expect.
Julia Seymour:
Now Australia is currently facing a spell of financial hardship with rising inflation interest and debt rates. How does, IAM fair within these conditions?
John Nantes:
For us, we’re probably one of those rare companies that love the RBA and what they’ve done with rates. And I know that sounds a little bit terrible, but for us when we’re providing yield solutions, having high yield to provide is obviously an accelerant in terms of how we can go to market and the problems we can solve. So in our cash business for example, being able to provide three, 4 per cent type sort of cash TD rates means there’s a new market where it’s a sensible solution for many portfolios. But when you’re looking at bonds and fixed income where you’re talking 6, 7, 8 and beyond, again that type of yield and that kind of opportunity makes its way into investors’ portfolios more efficiently and quickly now because the markets, the market’s back additionally like I said earlier, debt capital markets is thriving because companies have realized that equity is expensive now.
And so using debt and using it effectively helps manage their balance sheet position, helps ’em accelerate growth in the right way. And we’re able to do that very, very efficiently based on our sort of talent and technology. And again, our funds management solution providing yield to investors and that’s what we’re focused on through River Capital means that we can either provide either direct investing or through a fund depending on what the investor chooses. So in this higher interest rate environment where inflation’s really driven this outcome, IAM is actually exceptionally well placed because this is what we do. We’re a yield house, we think we’re one of the best in the country, one of the fastest growing in the country and there’s a significant client base we already look after as well as a growing client base that we’re growing into as well.
Julia Seymour:
In considering all this, why should investors opt for IAM as opposed to more familiar means of investment?
John Nantes:
I think it comes down to how the market’s really shifted. In a portfolio, if you’re a financial advisor, stockbroker, you, you’re typically going to look for yield cashflow, you’re going to look for more defensive assets now. And to do that, you need to have quality people behind that offering. And I think IAM does that because we have sort of great talent within the team. We’ve been sort of pretty active in recruiting, sort of the best of breed within the country. We’re led by John Lechte, our CEO, who’s been in sort of fixed income and debt for the last 25, 30 years. He’d hate me, he’d hate saying that number, but he has been around a long time building businesses in this particular space, particularly globally. So he’s been able to assemble a team that can solve cash, fixed income, bonds, debt capital market in a way that’s unbelievably unique in Australia, we find deal flow that others can’t.
We innovate around product that others haven’t been able to, and I think that places us really well. And the other thing is, because of that mandate and because of how the guys think, we’re constantly innovating and there’s things we’re working on right now that we’ve told the market that over time we’ll continue to bring out new product, new yield, new solutions so that investors can get access to more yield and more type of fixed income solutions, either directly for themselves or if they’re an advisor, a stockbroker, etc, or a fund manager for their portfolios or their client portfolios as well.
Julia Seymour:
John Nantes, Income Asset Management Executive Chairman, thanks for your time today.
John Nantes:
Thank you much appreciate it.