The revised structure includes a new co-investor in Wheelhouse, Alan Howard.  Mr Howard is a co-founder of Brevan Howard Asset Management LLP, the UK hedge fund where Wheelhouse trader Andrew MacLeod and chief information officer Sam Jacob worked for many years across several markets.  Mr Howard replaces Bennelong in the capital structure of the business.

Managing Director of Wheelhouse, Alastair MacLeod, said Mr Howard’s investment represents a tremendous vote of confidence for the business which began operating under Bennelong’s structure over three years ago.

“While volatile market conditions have played to our strengths, we remain steadfastly committed to the core objectives on which Wheelhouse is founded; to generate a reliable, consistent income stream whilst preserving investor capital from market downturns,” MacLeod said.

“For the first time in decades, investors are facing falling dividends, fewer traditional income yielding options and inflated asset prices across the board, which is transferring more risk to capital bases.

“Our global strategy seeks to address these concerns, targeting a high-income yield whilst safeguarding our investors’ capital.

“The time is right for a differentiated investment approach and we are excited to be in a position to invest in our business and create solutions for investors to help navigate this challenging environment.”

The MacLeod brothers are based at Wheelhouse’s headquarters in Brisbane, while Sam is based in Sydney.

The team will be supported by recently appointed Chief Operating Officer Tony Hammond, well known in Australia’s funds management industry for his stewardship of fast-growing boutique investment managers.

Hamel Strategic Partners will head up distribution efforts for Wheelhouse, led by Andrew Aitken, the former Head of Distribution at Bennelong, and Cameron Dickman, formerly Head of Distribution at AMG and Australian Unity.

The Trust Company (RE Services) Limited (Perpetual) is now the Responsible Entity for the Wheelhouse Global Equity Income Fund.

The team has completed extensive testing of an Australian equities focused fund, applying the same rules-based and disciplined derivatives strategy to that of its flagship global fund, however over an index of Australian listed securities.  The local fund is expected to be rolled out to Australian retail and wholesale investors later this year.

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The Fund, launched in 2014 and available to financial advisers and wholesale investors, is a liquid alternative strategy that invests in developed currency markets and seeks to deliver positive returns over full market cycles.

“Investors are increasingly looking for alternative sources of non-equity return to provide true diversity to their portfolios,” said Max Darnell, Managing Partner and Chief Investment Officer at First Quadrant. “We are pleased that HUB24 is responsive to the growing demand from investors for access to quality alternative investment options. Diversification is a strong theme currently resonating with investors at a time when equity markets are near all-time highs, and bonds and cash yields are uninspiring.”

Mr. Darnell added, “With an underlying strategy dating back to 1992, the FQ Global Alternative Return Fund is seeing increased interest from Australian investors. The recent uptick in demand appears to be driven by the ongoing search for positive returns in an environment where those generated by other major asset classes are limited. For some investors, the Fund can provide a hedge to low- or negative-return equity markets at a reasonable cost.”

With a minimum investment of $25,000, the Fund targets a risk-managed return exceeding the Reserve Bank of Australia Cash Rate plus 4 per cent.

Cameron Dickman, Director, AMG Australian Distribution, commented, “Advisers in Australia have been searching for solutions with truly diversifying traits at a time when traditional asset classes have underperformed. Advisers are increasingly recognizing that actively-managed currency products – in contrast to those passively purchased through equities – can provide a counterbalance to traditional assets.”

Mr. Darnell concluded, “Currency represents a significant portion of liquid alternative allocations. The strategy is driven by fundamental economic research capturing mispricing opportunities in major market currencies. We believe that investors seeking uncorrelated returns would be well-advised to consider currency strategies.”

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“The global financial crisis has focused investor attention on one kind of risk, market risk – the risk associated with market volatility – and whether we are still in a bear market.

“As a result, investors have made avoiding or minimising this risk their priority, resulting in them keeping most, if not all, their money in cash, rather than focusing on their ultimate goal which is a retirement income that will last.

“Even now, when volatility has largely returned to pre-GFC levels, many investors are still keeping a significant proportion of their retirement savings in cash options such as term deposits, in the belief that this is the least-risky strategy.

“However, while this approach minimises market risk, it exposes investors to a number of other risks including inflation risk, income risk and opportunity risk,” Mr Dickman says.

He said that inflation risk, which is when higher levels of inflation eat away at returns and capital, is a major issue for those who have money in term deposits.

“As the interest rates offered on term deposits fall – as they are already starting to do – the return on the capital will also decrease.

“Inflation also means that capital locked up in a non-growth asset will have less value at the end of its two, three or five year term.

“Opportunity risk is associated with this. If the money is locked away in a term deposit for two, three or five years, it is money that can’t be used elsewhere – therefore opportunities for better returns and capital growth are being missed,” he said.

Mr Dickman added that perhaps the biggest risk for investors at the moment is income risk.

“Investors who took their money out of other investments to put into cash when the government introduced the bank guarantee have most likely sacrificed income.

“Term deposits may seem a safe haven now, but people probably don’t realise that this choice means they have introduced future income risk into their portfolio.

“With the first of the baby-boomer generation now entering retirement, as well as the trend of longer life expectancy, a stable, regular income will become a priority. This is something people won’t get from a term deposit where the interest is usually paid at the end of the term.

“Indeed, the burgeoning ageing population, combined with the higher health costs associated with people living longer, makes it even more important for Australians to be adequately prepared to fund their retirement.  A potential risk in its own right is relying on future governments to pick up the tab for those who run out of money.

“Therefore retirees in particular need to consider other investments, and find a balance between their desire for low-risk investments and their need for returns that will generate ongoing income in their retirement.

“It comes back to the value of taking a balanced approach through a diversified portfolio, and understanding that different investments offer different benefits, returns and risks.

“No single investment will provide investors with all three elements of high liquidity, high returns and low risk, so a combination is needed.

“Diversity also helps to manage all types of risk.

“Investors must assess each individual asset class on its own merits and make investment choices based on their own needs of income, liquidity, growth and risk,” Mr Dickman said.

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