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BLA, BLUE SKY ALTERNATIVE INVESTMENTS LIMITED
nipper
post Posted: Jul 14 2017, 08:50 AM
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I'll be looking at BAF today, when they post the monthly NTA. ... as LIC's have to. There should be quite a few reval's of assets, being EoFY. And as there's quite a bit of common ownership (BAF has right but not obligation to take up equity in some of the BLA projects), this should point to any asset base uplift.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
Mags
post Posted: Jul 13 2017, 11:35 PM
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In Reply To: goldy's post @ Jul 13 2017, 07:15 PM

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In what part of the BLA model do you find repulsive? I didn't see any actual figures of debt in the report, just an unfounded generalisation.


That was six months ago, so I don't recall the specifics, but I remember the debt levels on a couple of their holdings/investments were way beyond what I feel comfortable with.

My POV is, with all this low interest rate muck going on, it's mostly a game of bluff, see who can borrow the most, gain the most, but sell just before the inevitable.

I'm comfortable watching how these highly leveraged plays roll out.

 
goldy
post Posted: Jul 13 2017, 07:15 PM
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In Reply To: Mags's post @ Dec 30 2016, 10:04 AM

In what part of the BLA model do you find repulsive? I didn't see any actual figures of debt in the report, just an unfounded generalisation.

 
nipper
post Posted: Jul 6 2017, 04:24 PM
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QUOTE
Blue Sky Venture Capital, one of Australia's leading venture capital fund managers, has been selected to manage the State Government's 15 year, $50 million South Australian Venture Capital Fund. The appointment follows an extensive tender and evaluation process.

The State Government's SAVCF will support local ventures with high growth potential to secure funding and accelerate growth into national and global markets, stimulating economic growth and job creation in South Australia.

Blue Sky Venture Capital will expand its office in Adelaide, with employees dedicated to the SAVCF, who will work alongside local businesses and organisations to identify high growth potential South Australian companies for investment and help attract additional private sector funding from national and international investors.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 2 2017, 09:29 AM
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"...In October and November last year, the short interest in the stock was equal to about 3.5 per cent of the issued capital.

Also, over the years Blue Sky has come under attack from bloggers and analysts claiming it is too reliant on asset revaluations and that its investment vehicles carry too much debt.

Chanticleer believes there is an element of the tall poppy syndrome wrapped up in the negativity towards Blue Sky. Many of the rumours have been proven to be wrong.

Chief executive Rob Shand is happy to deal with all the criticisms head-on. His arguments are quite persuasive, as shown by the fact that the level of institutional investment in Blue Sky's range of funds has jumped from zero five years ago to 37 per cent in 2016.

In response to the claim that returns are driven by unrealistic valuations of assets, Shand says that 28 of the 31 asset realisations made by Blue Sky since 2006 have been at valuations higher than book value. He says this shows an inherent conservatism in the accounting for the value of assets.

In response to claims that valuations are too easily pumped up, Shand says each asset must go through four separate sets of eyes. It starts with KPMG as valuer, then EY as auditor, then the board of the fund and then the board of the head stock, Blue Sky Alternatives.

Blue Sky is best known for its stunning returns from its Water Fund, which invests in water in the Murray Darling Basin. Shand says that the doubters who question the water business should look at the value of water globally. Water in Australia sells for about $2000 a megalitre compared to $8000 a megalitre in California.

In relation to the criticism of too much debt in Blue Sky's private equity investments, Shand says 16 out of 25 PE investments have no debt.

At one stage rumours circulated about the ability of a company called Wild Breads, which supplies Coles and Woolworths, to remain a going concern. Shand says it has been growing so fast the company had to invest in more plant and equipment. This required the company to borrow to expand. He says that is a good problem to have.

Blue Sky has copped criticism in some quarters for its expansion into student accommodation. But Shand says this real estate business, which is in partnership with Goldman Sachs, is performing extremely well....."

Read more: http://www.afr.com/brand/chanticleer/



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: May 31 2017, 09:04 AM
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fee-earning assets under management now exceed $3 billion.
QUOTE
Blue Sky's growth in fee-earning AUM has come from its diverse base of investors, including domestic and international institutions, sophisticated investors (including family offices and high net worth individuals) and retail investors.

Blue Sky's managing director, Robert Shand, stated "We have seen growing support across each of our asset classes: Private Equity and Venture Capital, Private Real Estate, Real Assets and Hedge Funds. ... We continue to anticipate that AUM will be between $3.1 and $3.3 billion by 30 June 2017, an increase from $2.1 billion at 30 June 2016."

also https://www.businessinsider.com.au/the-md-o...ane-home-2017-5



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 

Featured Stock Stories





nipper
post Posted: Feb 14 2017, 09:35 AM
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QUOTE
Blue Sky has just announced a 130% increase in 1H17 NPAT to $10.1m, and a 59% growth in assets under management to $2.7bn over the pcp. This impressive result has been driven by Blue Sky's unique asset class offerings that include Private Equity, Real Assets (largely water rights and agriculture), Private Real Estate, and Hedge Funds. Importantly, this momentum is forecast to continue with full-year company guidance of an FY17 underlying NPAT of $24-26m and AUM of $3.1-3.3bn.

Since listing in 2012, Blue Sky has established an enviable history of regularly beating market expectations. Not surprisingly, investors have been well rewarded with a share price that has risen 100% in the past two years. However, we suggest there is plenty more upside for this business and highlight five reasons why Blue Sky should be seriously considered as a core portfolio investment.

1. Globally proven industry tailwinds – Australian investors (both institutional and retail) have been reluctant to venture far from the 'traditional' asset classes of listed equity, bonds, cash and property. However as returns in these assets have become increasingly squeezed due, in the most part, to depressed interest rates, those looking to generate alpha have had no choice but to look 'outside the box' to alternative assets. As such, domestic allocations to alternative assets have tripled to around 17% in the past decade, yet this is still well below global allocations of 24%.

2. Impressive track-record – Both at a corporate level and fund level, BLA has provided outstanding results for its clients and shareholders. BLA's average annual return across its stable of managed funds is in excess of 16% p.a.; the performance of the listed fund (BAF.ASX) is up over 9% p.a.; and the head stock (BLA.ASX) has risen more than 50% p.a. since listing.

3. Institutional growth – 2016 marked the first year in which BLA made meaningful inroads into the substantial institutional market, winning almost $800m in institutional mandates. It is not unreasonable to expect this trend will continue, significantly accelerating BLA's overall AUM.



QUOTE
4. Financial transparency – A major attraction of any funds management business is the relative ease in which to predict their financial outcomes. With relatively straightforward management and performance fee models, stable staffing trajectories and, in BLA's case, a high proportion (80%) of closed-end AUM, earnings predictability can be considered high.

5. Business scalability – last, but certainly not least, is the enormous scalability of any growing funds management business. BLA has, in a global sense, a miniscule level of FUM; Blackstone, for example, has over $250bn of AUM. Despite the modest level of AUM to date, BLA's operating expense (as a % of AUM) has still managed to decline every year. As BLA's AUM grows, shareholders can reasonably expect that a growing proportion of these revenues will flow through to company profits and dividends.




Cyan Investment Management



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Feb 10 2017, 02:11 PM
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market liked today's Half Yearly; out of the blocks, gapped up and put on 8+%.
QUOTE
• underlying Net Profit After Tax (NPAT) of $10.1 million (up 130% from 1H FY16);
• underlying EBITDA margins for 1H FY17 expanding to 41% (1H FY16: 28%);
• underlying income of $36.4 million (up 53% from 1H FY16); and
• fee-earning AUM of $2.7 billion (up from $2.1 billion at 30 June 2016).

The company confirmed it was on track to deliver underlying NPAT of $24 to $26 million in FY17, representing approximately 50 per cent growth on FY16.

Blue Sky’s fee-earning AUM at 31 December 2016 was $2.7 billion, with the company adding $1.0 billion in the last twelve months. The fund manager saw a significant rise in investments from Australian and overseas institutional investors, from 25 per cent to 37 per cent of its fee-earning AUM during the period.

Fee-earning AUM is expected to be between $3.1 and $3.3 billion by 30 June 2017. The company confirmed it was on track to meet or exceed its longer-term targets of $5 billion by 30 June 2019 and can see a pathway to $10 billion based on the current opportunities in its four existing asset classes.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
Mags
post Posted: Dec 30 2016, 10:04 AM
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Thanks nipper, I don't hold or follow blue sky: But have a mate bang on about how good it is. I generally find the model repulsive as a listed entity. When I read those debt levels you have in that article, my suspicions are confirmed. A risky, risky play for a retail investor, and another IPO sure to be missing from the ASX in 10 years.

Oh well, a fool and their money are easily parted.

 
nipper
post Posted: Dec 29 2016, 04:10 PM
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QUOTE
A number of private equity businesses operated by Blue Sky Alternative Investments, one of the country's only publicly listed alternative asset fund managers, have "very stretched" balance sheets and are highly leveraged, according to a confidential research note circulated by Diogenes Research. The note, published weeks after The Australian revealed the financial pressure on a number of Blue Sky's investments, is based on private information obtained by Diogenes which casts doubts over the sustainability of the fund manager's business model.

Blue Sky investments analysed by Diogenes include retailer Lenard's Chicken, which it suggests is almost entirely funded by debt, while debt owed by the Foundation Early Learning business is approaching 10 times its annual earnings. Blue Sky invested $20 million in Foundation Early Learning last year.

Diogenes, an independent equities research firm established by former Goldman Sachs JBWere partners Matt Cook and David Roberts, declined to comment on whether the note was prepared on behalf of a client. But its publication comes at a time of growing scrutiny of Blue Sky's business model, with short interest from hedge funds standing at about 3 per cent of the company's total securities and with the share price falling from $8.46 in August to $7.05 on Friday.

Blue Sky managing director Robert Shand rejected the Diogenes note, and said it had "a wide range of factual inaccuracies" and included "statements that are inconsistent with their own report". Mr Shand disputed details of the "very stretched" leverage, and said both Foundation Early Learning and Wild Breads, another business owned by Blue Sky, had debts in total of less than two times their annual earnings.

The Diogenes note, which runs over a dozen pages, is highly critical of other aspects of the Blue Sky business, including its reliance on so-called Level 3 Assets, which are typically illiquid and difficult to value using market measures. The report notes that valuation techniques have changed for assets owned by Blue Sky over the years, including for the company's e-commerce business aCommerce, which this year will be valued using future earnings rather than sales, which is how it was valued last year.

Mr Shand's remuneration was also criticised, with Diogenes noting he had been issued 1.3 million share options, for which the primary vesting condition was that funds under management would grow to $5 billion by 2019.

Blue Sky, a manager of venture capital and private equity money and a real estate investor with apartment and student accommodation businesses, has grown rapidly, with assets under management rising from $200m four years ago to $2.4 billion.

In recent days Blue Sky sold Water Utilities Australia to Colonial First State Global Asset Management, a rare trade in that market.

"Management is clearly incentivised to focus on growing (funds under management)," the note reads. "Overall, we think the risk/reward is poor over the medium term given concerns about the sustainability of (Blue Sky)'s business model."

Mr Shand said the incentive structure "was specifically designed to align management incentives with shareholder outcomes and includes several hurdles to ensure management will only benefit if shareholders do". Four "reputable broking researchers" — Morgans, Shaw & Partners, Canaccord Genuity and Ord Minnett — have far more bullish views of the business, and "we would therefore recommend a high degree of caution in relying on (Diogenes') conclusions", Mr Shand said..
The Australian

http://www.theaustralian.com.au/business/p...985694e3eb443d6



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: Mags  PeterH  
 
 


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