New Venture: Alastair MacLeod on the launch of Wheelhouse Partners
In partnership with Bennelong Funds Management, Alastair MacLeod and two colleagues established boutique Wheelhouse Partners and, in May, launched the firm's first offering, The Wheelhouse Global Equity Income Fund. We speak with MD and portfolio manager Alistair about the firm's goals for the next 12 months, what makes Wheelhouse Partners stand out from the crowd, and about the person who taught him to "think critically like an investor".
In partnership with Bennelong Funds Management, Alastair MacLeod and two colleagues established boutique Wheelhouse Partners and, in May, launched the firm's first offering, The Wheelhouse Global Equity Income Fund. We speak with MD and portfolio manager Alistair about the firm's goals for the next 12 months, what makes Wheelhouse Partners stand out from the crowd, and about the person who taught him to "think critically like an investor".
What led you to launch your own boutique?
I felt very strongly that there was a need for a purpose-built retirement strategy that was outcomes focused. Fortunately, with the skills I had built over my career, I was able to construct a business around that vision - where the investor, and specifically Australian retirees, were front and centre in terms of what we are trying to achieve. If we deliver for them, then our business will also do fine... but not the other way around.
What core expertise does Wheelhouse Partners bring to the market?
Our 'Wheelhouse', if you will, is derivative based solutions. We have a deep capability in the pragmatic application of derivatives to achieve specific client objectives, and the construction of an IT-based, risk management platform to support our decision-making process. Ultimately, we believe we can deliver this capability to our clients far more efficiently and robustly than if they were to build it themselves.
What are your main goals over the next 12 months?
Our primary goal is always to preserve our investors' wealth and minimise the risk of unfavourable outcomes. If we do that, then we believe the strategy has a place in many investors' portfolios, and our business will grow accordingly. We have a cost advantage designed into our business model so our cash breakeven from an Assets Under Management perspective is quite low, despite our lower than average fees. We believe breakeven in 12 months is a realistic target.
Why did you choose to partner with Bennelong?
Firstly, their reputation as a successful fund incubator is one of the best in Australia, and I'm very pleased to say that once on the inside, the entire business - from operations to distribution to marketing - has lived up to this.
But secondly, to be honest it wasn't every distributor's dream to share the economics of our cost advantage with our investors and price the Fund as keenly as possible. For Wheelhouse Partners, it was important because we firmly recognise that fees stand between returns and outcomes. I believe Bennelong saw the fee structure as an opportunity like we do, and that the potential for accelerated asset growth more than offset the lower sticker price.
Will others be joining yourself, Sam Jacob and Andrew MacLeod on your new venture?
We're set for now. The risk management platform is built to be highly scalable. Sam and Andrew have worked closely together for over 10 years at Brevan Howard in very similar roles, and we all have very clear and complementary competencies within the business. Which is fortunate when you're working with family!
What's the best piece of advice that you have received?
Stick to what you're good at and don't try to do everything. It's a core principle of the business at Wheelhouse Partners that we are 100% focused on delivering excellence in derivatives and associated risk management. It can be very difficult to have that honest conversation and admit you are just not going to be competitive in anything unless you are genuinely excellent at it and devoted to it. I don't believe in multi-tasking!
For the Wheelhouse Global Equity Income Fund we're very fortunate to be working with Morningstar who have provided the underlying portfolio. We selected Morningstar for their proven process, well-resourced team of over 100 equity analysts, and the index performance reflects this. This is what they are good at.
Who has had the biggest influence on your career thus far?
An old boss of mine Simon Fenwick. He hired me in London many years ago and he went on to co-found one of the fastest growing mutual funds in America when they launched, International Value Advisors. He taught me to think critically like an investor (perhaps cynically is more accurate), and always have a basis for my decisions. He's also been very helpful with the design and build of Wheelhouse Partners. Thank you Simon.
What was your very first job?
Delivering the Village News in my old neighbourhood in Brisbane. Cash payments to a 10 year-old with no helmet. The good old days.
Starting your own boutique must be chewing into a lot of your spare time, especially in the initial stages. How do you maintain a work/life balance?
It is all consuming but I am exceptionally driven to make this work. I believe the business has a greater purpose than simply making money - helping mum and dad retirees to enjoy their retirement with less uncertainty. This makes me proud to tell my kids what I do every day.
