Blue Sky Alternative Investments Limited continued to re-rate following an excellent FY17 result that came in at the top end of their guidance range. Blue Sky had been largely under the radar of institutional investors but has become much better understood as a result of improved recent disclosure from management and a vastly increased market profile thanks to its rapidly growing assets under management and strong investment performance.

Unlike typical ASX-listed funds management businesses that tend to focus heavily on equity investment, Blue Sky has the bulk of its exposure in asset classes that typically have little correlation with the stock market, including real assets (e.g. water and agricultural assets), student accommodation in Australia and the US, retirement assets and US commercial property.

We recently met with Kevin Hoo, the founder and managing partner of the US Cove property JV, and came away impressed with the progress on the current projects as well as being excited about the robust pipeline of potential opportunities in US commercial property which could add materially to Blue Sky's earnings in the coming years.

Robert Calnon, a member of OC's investment team, will be undertaking further due diligence on a number of Blue Sky's US assets in New York later this month.