OC Funds trip to the USA

AAD recently released a third quarter update which highlighted the potential of Main Event, with EBITDA up 63.7% year-on-year. The management of Main Event was experienced and knowledgeable and seem to operate relatively autonomously from Australian head office (which is pleasing given the recent change of CEO). Our modelling suggests that Main Event will contribute more than half of AAD’s earnings within two years and is the key reason we remain shareholders, notwithstanding the current issues with the health clubs.

We were also impressed by the new Treasury Group management team, led by MD Tim Carver, whom we met at the Northern Light’s head office in Seattle. Tim Carver and fellow executive director, Paul Greenwood, founded Northern Lights in 2006 and have built it into a multi-boutique asset management group representing 13 associated funds management businesses and with over $24b in assets under management. Since announcing its merger with Northern Lights in August 2014, it has been clear that Treasury Group is morphing into a geographically diversified asset management group with global aspirations. Our site visit taught us two important things. Firstly, it gave us confidence that Northern Lights appears to have strong cultural alignment and has similar values to the existing TRG team, which is critical given the people orientated nature of asset management. Secondly, our discussions on the strategic direction of the combined business gave us confidence that Tim and his team are indeed the right people to build a globally relevant asset management house and that they have ample experience and capability to execute on their vision.