Access Capital spreads equity, denies exodusI&T News, 5-Jul-2010
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Access Capital Advisers (Access CA) has denied media rumours of a mass exodus of its partners, and has clarified how it will redistribute the 24 per cent shareholding sold back to the firm by departed director Paddy Jilek.
Access CA said yesterday that Jilek was the only one of the firm’s four founding partners to no longer be working for the asset consultant, although it confirmed two other partners, both of whom held an approximate 1 per cent share in the business, had left recently.
These departees were Guillaume Valdant, the former head of private equity at the firm, and former reporting/operations chief Julian Widdup.
Two new partners have been promoted, with Tom Snow, a Rhodes scholar, rising from associate director to partner within the Access CA infrastructure group, focusing on Australian investments. Meanwhile Kui Ng becomes a partner and continues to head the consultancy’s property group.
These two have bought some of the equity which Paddy Jilek sold, since he ceased to be an employee of Access CA in January 2010, and ceased to be a director effective July 1. Equity has also been allotted to the company secretary and the chief financial officer of the consultancy.
A founding partner and the chief executive officer of Access CA, Alexander Austin, refused to comment on persistent industry talk that Jilek’s departure related to the integrity of valuations obtained from independent valuers on deals either advised upon or directly put together by Access CA.
Austin acknowledged that Access CA would be losing South Australia’s Statewide Super as a client, but said the two organisations would continue to work together on co-invested deals.
He said the performance of Access CA’s portfolios, famously heavy on unlisted assets, had begun to improve from the doldrums of the global financial crisis. The consultancy’s template unlisted portfolio has returned a net 9.97 per cent a year since 1999, against a 7.42 per cent return for an amalgam of the ASX300 and the MSCI World ex-Australia indices.
The experience of 2008-09 had lead to a few changes in the Access CA approach, Austin said, with “purely defensive” assets such as government bonds and cash once again a permanent feature of the house strategic asset allocation.
The “learning experience” had also lead to enhanced liquidity management protocols within the Access CA approach, including the use of 12-month rather than 3-month currency forward contracts, giving clients “more time to manage the effects of a rapid currency depreciation”.
ID theft claims emerge in MTAA Super inquiry
St Michael Investigations, 17-Jun-2011
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THE prudential regulator’s investigation of MTAA Super has reached a new level of intrigue, with claims of identity theft as the Coalition seizes on governance of the fund as evidence of a wider industry malaise.
Yesterday, an email was circulated, purporting to be from Paddy Jilek, a founding director of MTAA Super’s asset allocation consultancy Access Capital Advisers, who left last year to join investment bank UBS.
The email, containing suggestions about further lines of inquiry on MTAA Super, was sent from a Yahoo address.
Mr Jilek denied all knowledge of it and otherwise declined to comment.
“Maybe Access advised against MTAA hedging policy?” the email says.
“Since when does a regulator investigate underperformance? Why you (sic) not asking what the regulator is really looking into on mtaa board?”
Clearly, the lid has been blown off a can of worms this week, with reports that the Australian Prudential Regulation Authority had appointed Clayton Utz partner Jane Paskin to probe the performance of the nation’s 10th biggest industry fund for the three years to June last year.
MTAA Super, which has a relatively strong bias to illiquid infrastructure and property investments, had $1.67 billion in negative investment income in the year to June 2009.
The fund reportedly lost more than $500 million from the removal of currency hedging, but chief executive Michael Delaney shot this down on Wednesday.
Denying there was $500m in hedging losses, he declined to name a figure and said the fund was only unhedged “for a short period of weeks”.
Access executives Alexander Austin and David Chessell and a third employee have been questioned on oath by APRA, with some examinations said to have continued for 14 hours.
APRA, however, has stuck rigidly to its policy of not commenting on regulated institutions, and Mr Delaney has declined to take questions.
Mr Austin emerged briefly to defend the firm’s business model against suggestions of perceived conflicts, as it advises funds on asset allocation and earns management fees from assets it introduces to its clients.
Access, he said, had pioneered the approach of offering asset management services to its advisory clients.
“All investment decisions are taken by trustee boards in full knowledge of the nature of this advisory relationship, including any fees to Access,” he said.
Amid calls for MTAA Super to release a full set of accounts and for Mr Delaney to step down, the vacuum was filled by Canberra.
The large retail funds have long agitated for a bigger role in highly lucrative award super, which is dominated by union-influenced industry funds.
“Super is one of the many things that are negotiated in an award, and it’s part of the DNA for a union,” Warren Chant of consultancy and researcher Chant West said.
“But for employers, it’s often the first thing they give away in award negotiations. There are no objective criteria for choosing default funds, and retail funds are not getting the same opportunity as industry funds.”
Coalition senator Mathias Cormann blamed Assistant Treasurer Bill Shorten for protecting “closed shop” arrangements for the selection of default super funds under awards.
The top 10 default funds were all industry funds and were listed 330 times in awards after being chosen in “a secretive process riddled with undeclared conflicts of interest”, he said.
Last year, MTAA Super was added to six awards, despite its balanced growth fund’s performance being ranked 48 out of 49.
Mr Shorten reaffirmed the government’s election commitment to a Productivity Commission review, starting next year, of the way in which default funds were selected.
The review would be considered before the July 2013 introduction of the MySuper reforms, he said.
Mr Chant said it was unprecedented to hear of an APRA investigation taking evidence on oath, followed by a “jumble” of information in the following days about whether the fund had been hedged or unhedged.
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