Jamie Mead

Australian fund managers face a test of discipline as geopolitical conflict, stubborn inflation and market swings continue to unsettle investors, according to Jamie Mead CEO at Talaria Capital.

Mead says the current environment, which has been defined by persistent macro uncertainty and volatility, is exposing a gap between fund managers who have a solid investment process and those who are reacting to events as they unfold.

“While it is something we maintain an awareness of, macro factors such as geopolitics and central bank movements are not central to the way we run money,” Mead says.

“The key thing in an uncertain world is to be able reassure your investors and say, ‘let me give you conviction that how we invest your money is not going to change.”

Mead says investors should be prepared to ask the hard questions of fund managers, about what they own, how investment decisions are made and whether the process holds up when markets become unsettled.

“When markets are volatile, a disciplined investment process allows you to distil signal from noise,” Mead says.

“We are looking to buy the cheapest, best quality assets at the lowest price we can afford. That’s it.”

Talaria’s approach is to capitalise on market volatility rather than avoid it, which Mead says is becoming increasingly relevant as investors look beyond traditional shares and bonds for returns.

“We certainly hear from our investors that alternative asset classes are going to continue to form a larger part of the overall asset allocation,” Mead says.

“We do that in a way which means that we can harvest volatility. That’s why we consider ourselves more of an alternative fund rather than being a long-only manager.”

And as alternatives gain ground in institutional and wealth management portfolios, Mead says investors need to scrutinise how those investments are structured, particularly around liquidity.

“Liquidity is one of those things that you don’t need until you need it,” Mead says.

“Investors should understand what they are invested in, but also ask their fund managers how that investment is packaged and what happens if they need to get their money back during a more difficult market.”

Mead adds clear communication between fund managers, advisers and investors is essential to avoid the common pitfalls in client and fund manager relationships.

“For example, investors shouldn’t assume they are diversified simply because they own investments through different structures. An investor may be exposed to the same type of business through listed shares, private equity and private credit. While those investments may sit in different parts of a portfolio, they can still be susceptible to the same underlying risks,” Mead says.

“That’s why the simple practice of communication is an extremely important part of what we do.”

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Talaria CEO, Jamie Mead, says Ms Simpson’s expertise in wealth management and fund distribution will be an asset for Talaria’s growing team.

“Brooke’s strong background in client relationship management, fund manager engagement, and business development makes her an excellent fit for our expanding team. Her skills and energy will be invaluable as we continue to grow our investor base and deliver strong outcomes for our clients,” Mr Mead says.

Before joining Talaria, Ms Simpson worked at Wilsons Advisory and Koda Capital in Sydney, gaining deep expertise in investment products spanning equities, fixed income and alternatives. She also spent time at Tsetsaut Ventures in Northern British Columbia.

Ms Simpson’s appointment comes as Talaria continues to broaden its footprint in the Australian market, with growing demand from advisers and institutions for the firm’s alternative investment approach.

Ms Simpson’s appointment follows the hiring of Kate Doherty as fund administrator and Krish Bhattacharjee as an operations analyst. Ms Doherty brings extensive experience across financial services both in Australia and internationally, including senior roles in fund and trust administration with UBS Fund Services (Cayman) Ltd, Butterfield Bank (Cayman) Ltd, and HSBC Trustee (Guernsey) Ltd. Mr Bhattacharjee brings over six years of financial experience, including 2.5 years in investment operations at Vanguard, focusing on equity and fixed income funds.

“As we expand our reach, it is crucial that we bring on board people who share our values and bring fresh perspectives. These appointments will help continue our growth and realise our vision,” Mr Mead says.

Ms Simpson holds a Master of Financial Planning from UNSW, and a BBA (Finance, Accounting Minor), from Thompson Rivers University, Canada.

Ms Doherty holds a Bachelor of Commerce from Melbourne University and is a Chartered Accountant.

Mr Bhattacharjee holds a Master’s degree in Accounting and International Finance from Deakin University.

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Jamie Mead

The significant changes in the funds management industry in the past decade have brought issues such as liquidity, correlation and diversification to the forefront, and created new risks for investors to manage, says Jamie Mead, CEO of Talaria. 

He said fund managers have had to respond to major changes such as the Your Future Your Super reforms, the huge growth and influence of superannuation funds, insourcing of investment expertise, industry consolidation, and the rise of passive investing, to name just a few.  

“We’re also currently seeing a notable shift in interest towards private markets at the expense of public markets. 

“The big question mark is, how aware are investors of the impact of these changes on them, and the risks that they pose? 

“With the rise in passive investing and index aligned ‘active’ strategies, currently we believe there is a lack of genuine diversification in portfolios and many investors are sleepwalking into concentration risk. True diversification requires exposure to different asset classes, active conviction, structural risk management, and liquidity,” he said. 

Mr Mead says one critical factor in the current environment, where there are more Australians in retirement than ever before, is having more liquid investments, as this allows retirees or pre-retirees to meet their financial obligations or take opportunities more easily. 

However, he says liquidity is just one factor, as there is also the need for decorrelated income, which is earned from sources other than dividends and helps investors meet their living needs – particularly important during market downturns. 

“This allows investors to receive income without drawing only on their capital base or relying on companies to pay dividends when that isn’t always reliable or consistent,” Mr Mead said. 

“Lower volatility strategies are important because they allow a smoother return profile. A person earlier in their career can ride out market drawdowns, whereas a retiree who needs the capital to both drawdown over time as well as generate income can be significantly disadvantaged if they need to withdraw funds at a distressed price.”

Mr Mead says in an investment landscape increasingly shaped by passive strategies and concentrated market exposures, some fund managers have benefitted by carving out a distinct position as leaders in alternative asset management. 

“While the alternative assets space has seen a shift toward private equity in recent years, we think there are still outstanding opportunities in public markets, and our focus is on offering investors the benefits of alternatives such as lower volatility, low correlation to index funds and indeed many ‘active strategies that are not very different from the index, and unique return sources, while maintaining full liquidity and transparency.  

“This approach has proven particularly relevant in an environment where many portfolios are overexposed to narrow segments of the market, such as the “Magnificent Seven” stocks in the US. 

“As such, I believe that remaining ‘true to label’ is more important today than perhaps ever before. It means avoiding style drift through various investment cycles – something our strategy, which has been running for 20 years, has achieved.  What’s crucial for us is that our strategy is process driven – it’s not about individuals, whims or the latest theme-du-jour but a focused adherence to a process that aims to deliver strong risk-adjusted alternative performance results. For clients it’s crucial that we keep doing this.” 

Talaria uses an options implementation process when buying shares. The manner in which they do this aims to deliver three key outcomes, namely structurally lower market risk, less market volatility and an additional decorrelated return source aligning with the risk-return profiles of sophisticated investors, while often outperforming traditional hedge fund indices.

“Our strategy reflects a long-term vision with an actively managed approach that delivers differentiated returns rather than tracking indices.  

“In an era where many portfolios are inadvertently regulated by index-linked strategies, our philosophy emphasises the importance of fundamental research and unique implementation process,” Mr Mead said. 

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Andrew Godfrey

Australian based global equity manager Talaria Asset Management has partnered with Equity Trustees as the Responsible Entity of its three global equity funds – the dual access Talaria Global Equity Fund Complex ETF (Cboe:TLRA), the Talaria Global Equity Fund Currency Hedged Complex ETF (Cboe:TLRH), as well as the Talaria Global Equity Fund – Foundation units.

Andrew Godfrey, Executive General Manager of Corporate and Superannuation Trustee Services at Equity Trustees, said: “We are proud to be partnering with Talaria as they continue to offer investors their differentiated approach to global equity investing. Our role as Responsible Entity is to ensure strong governance and compliance, supporting Talaria in delivering their investment strategy with confidence.”

Jamie Mead, CEO at Talaria, said: “Talaria is delighted to be partnering with Equity Trustees, one of Australia’s largest specialist trustee companies, as its new Responsible Entity. We’re looking forward to the enhanced capability and user experience that Equity Trustees can offer our business.”

“Talaria’s bottom-up research focus, combined with track record of delivering investors multiple sources of return with less downside capture and low volatility has never been more important as they try to navigate through the current market uncertainty.”

The Talaria Global Equity Funds provide international equity exposure through a strategy that incorporates options to manage volatility and enhance returns. Designed for investors seeking both consistent income and capital appreciation, the funds aim to grow real wealth while managing risk.

Talaria Asset Management is a specialist global equity manager and collectively oversees more than $2.5bn in assets. The firm is a carbon neutral organisation, a signatory to the UNPRI and a member of the Alternative Investment Management Association (AIMA).

Andrew Godfrey concluded: “Ensuring that funds meet regulatory, and compliance obligations is paramount, and responsible entity services are a vital component in achieving this.”

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Nick Fels

Talaria Capital has appointed Nick Fels to the newly created role of Strategic Projects Lead.

Based in Talaria’s Melbourne office, Mr Fels will manage high-impact, cross-functional projects that align with the Talaria’s long-term strategic goals and help support the strong growth of its funds. He will report to CEO Jamie Mead.

Mr Fels joins Talaria from Bell Asset Management where he has worked for more than 16 years as COO and CEO.

Mr Fels was formerly director at the Financial Services Council and has held other managerial positions/ senior positions at, Bell Potter Securities, UBS Wealth Management and National Australia Trustees Ltd.

Talaria CEO Jamie Mead says that with more than three decades’ experience in various management and leadership roles, Mr Fels will be valuable in his new role.

“The creation of this position reflects Talaria’s forward-looking trajectory, and with Nick’s solid experience in risk management, investment operations and cyber oversight in highly regulated, high-value fields, we are confident he will make an immediate impact to the business,” Mr Mead said.

“Equally important is Nick’s leadership experience as company director and trustee with current and recent directorships in the for-profit, not-for-profit and statutory body sectors both in Australia and the United States.”

Mr Fels is a graduate of the Australian Institute of Company Directors company director’s course. He has a Master of Business Administration in trust administration from the University of New England and a certificate in Governance Practice from the Governance Institute of Australia.

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Jamie Mead

Talaria Capital‘s award-winning Global Equity Fund has been added to the Colonial First State (CFS) FirstChoice platform.

Talaria’s CEO Jamie Mead said the CFS mandate is another important milestone in the growth of the Talaria business, creating more avenues for investors to benefit from the Fund’s diversified and alternative approach to global equity investing.

“Talaria’s bottom-up research focus, combined with our 16-plus year track record of delivering consistent income with relatively low market risk, and low volatility has never been more important for investors as they try to navigate through the current market uncertainty,” Mr Mead said.

While the Fund’s income has always been a consistent and differentiated source of returns, its diversified portfolio and unique process has seen it outperform the MSCI World (ex-Aust) benchmark by over 13 per cent so far in 2022, placing it in the top three global equity funds for performance over the last 12 months^[1].

The addition of Talaria is part of a number of changes and enhancements to the FirstChoice investment options menu and means Talaria is available on all major wholesale investments platforms as well has being listed as an active ETF on Cboe exchange with the ticker codes: TLRA and TLRH.

The Talaria Fund is available via several investment options including FirstChoice Wholesale Investments, FirstChoice Wholesale Personal Super, FirstChoice Wholesale Pension and FirstChoice Pension.

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[1] Versus benchmark performance to 30 April 2022. Performance versus Australian present Global Equity peer universe to 19 May 2022. Source: Morningstar.

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