Neil Rogan

Russell Investments and financial advice firm Invest Blue has announced the launch of the Cornerstone Private Markets Managed Portfolio, offering everyday advised clients exposure to private assets that remain out of reach for most Australians.

Private companies are staying private longer – and some may never go public at all. This means many investors risk missing out on the growth stories driving industries of the future. The Cornerstone Private Markets Managed Portfolio seeks to solve this gap by offering a simple, advised pathway into private equity, private credit and real assets.

With a minimum initial $25,000 investment the new portfolio uses a separately managed account structure, developed in collaboration with Ironbark, to give qualified advised clients of Invest Blue diversified access to institutional-quality private market opportunities within structures designed for retail investors.

Partner perspectives

“For too long, access to private markets has been limited to large institutions and ultra-wealthy investors. But many of the world’s most innovative and successful companies are choosing to stay private. This managed portfolio allows our clients to participate in those opportunities – through a carefully designed structure for retail investors,” said Chris Ogilvie, Chief Investment Officer at Invest Blue.

“Russell Investments has been investing in private markets for more than 50 years. Our global scale and manager research means we can help open the door for Australian advised clients to participate in institutional-grade opportunities – overcoming many of the traditional barriers faced by retail investors,” said Neil Rogan, Head of Distribution, Australia at Russell Investments.

“Private markets are increasingly being recognised by advisers as an important source of diversification and long-term return potential. At Ironbark, we saw a real opportunity to democratise access to these assets through a retail-compatible managed account structure that features institutional-grade controls around governance, transparency, and liquidity management,” said Alex Donald, CEO, Investment Solutions, Ironbark.

How the portfolio works

The Cornerstone Private Markets Managed Portfolio:

• Invests across 3 to 15 holdings in private equity, private credit and real assets — delivering the type of diversification across private markets assets normally only possible for institutional investors
• Combines evergreen, open-ended strategies with listed exposures, such as exchange-traded funds, to help provide staged access to capital
• Monthly pricing and platform-based reporting
• Will initially be available on the BT Panorama platform to advisers who meet criteria set by Invest Blue.

Global research and manager selection

Russell Investments’ global private markets research platform continuously monitors more than 9,000 private markets strategies worldwide, but only about 100 currently earn a “buy” rating.

“Manager selection is critical in private markets, where performance can vary widely. Our global scale allows us to identify and partner with the very best, giving retail clients institutional-grade access with greater confidence,” Rogan said.

Why this matters

• Companies are staying private longer: the average time before IPO has more than doubled globally in the past two decades
• Retail investors risk being locked out of value creation if they only access companies after they go public
• Private markets are growing rapidly, now representing trillions of dollars globally and playing a central role in innovation, infrastructure and financing.

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Zac Leman

BT has launched the Drummond Private Markets Separately Managed Account (SMA) – the first managed account on the BT Panorama platform that is dedicated to private markets. Innovatively structured, the SMA gives high-net-worth (HNW) clients easier access to a mix of private equity, private debt and real assets.

Zac Leman, Head of Managed Accounts, BT, said: “Many high-net-worth clients are interested in gaining exposure to private markets, to add to their existing portfolios which are predominantly invested in traditional asset classes. Drummond’s new product caters to that client demand, while also giving advisers the benefits that come from utilising a managed account structure.”

Tom Schubert, Managing Partner of Drummond Capital Partners, said: “Our managed account solution addresses many of the hurdles that advisers and clients tend to face when investing in the private market sector – accessibility, liquidity, complexity and transparency.

“We’re proud to have developed an innovative, differentiated solution that has been the culmination of our investment team’s experience in the managed account sector and strong heritage in the high-net-worth and family office segment. We have chosen to launch this first on BT Panorama because of the mix of investors on the platform – which includes a sizeable high-net-worth segment – and the BT team’s managed account capabilities.”

Private market investments have been traditionally the reserve of the ultra-HNW, with existing private equity or venture capital funds typically setting minimum investment thresholds in the $5m-$10m range.

In comparison, the minimum investment in the Drummond managed account is $100,000, making the product accessible to clients who are classified as sophisticated investors (defined as having minimum net assets of $2.5m or a minimum income of $250,000 per year for the past two years).

Investors also benefit from the product’s managed account structure which offers professional management, diversification and transparency of underlying investments across private markets asset classes.

Drummond selects and manages a portfolio of private markets managers with a focus on liquidity management. The portfolio provides access to funds with the majority allowing monthly redemptions; some have daily or quarterly redemptions. In comparison, some private markets funds typically require a long-term commitment, with investors’ funds “locked up” or inaccessible for around 10 years.

Investor interest in private markets has grown recently, as the number of Australian HNWs has continued to climb, and information about the sector has proliferated due to opportunities arising from technological disruptions and emerging markets. Further, the number of companies delisting from the Australian Stock Exchange and privatising has increased.^[1] Funds allocated to alternative assets have been increasing, and around 17% of HNW investors in Australia are utilising alternative assets.^[2]

Drummond Capital Partners developed their new SMA in collaboration with Ironbark Asset Management.

Alex Donald, CEO, Ironbark Investment Solutions, said: “We are delighted to have been chosen by Drummond as the responsible entity for this new managed portfolio solution. We look forward to collaborating closely with Drummond and BT now, and in the future, on this expanding asset class.”

Managed accounts growth on BT Panorama

BT’s managed accounts offering has grown to a total of over 400 products, with funds under administration increasing by 31% to $16bn in the 12 months to 30 April 2024 (excluding Adviser and Tailored Portfolios).

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