Insync is Approaching the Inflection Point to Capture Exponential Growth in Funds Under Management and Profit for Shareholders Over the Next 5 years

Insync is a high performing future-focused global equity funds manager that invests in a concentrated portfolio of highly profitable and innovative global companies best positioned to benefit from 14 global megatrends. Our Insync funds are rapidly gaining increasing recognition because of the consistently superior returns for our investors over a period of 10 years through both rising and falling markets.

This superior investment performance has been achieved by attracting an outstanding and highly regarded senior investment team who have developed a proprietary algorithm, risk management system and screening process that captures all the key data points on the companies we have identified as winners. Validation of this process has been revealed in our funds performance figures.

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Company highlights:

  • Superior fund performance –  The protected fund returned +19.6% over one year, +16.24% ahead of the global equity benchmark.
  • FUM increased by 60% over last 6 months to 31 December 2019
  • External Validation:
    • ”Superior” fund rating from research rating house SQM Research on both funds
    • Received a 5-crown rating, the highest quantitative rating from FE Fundinfo
  • Front page media coverage with AFR
  • Shortlisted in March 2020 for the upcoming prestigious Money Management Fund Manager of the Year Awards – Emerging Manager

Problem

Investors are significantly challenged to meet their investment objectives as an increasing number of investments are generating very low returns because:

  • Low interest rates are the new normal
  • The accelerating pace of global disruption is creating mayhem in the business world resulting in lower share price returns for many well know blue-chip companies.
  • Fund managers are by and large back-ward looking in their approach and will disappoint investors (our opportunity) in this fast-changing world.

Market Size and Market Opportunity

The total amount invested in global equities is $9 trillion. Insync’s addressable market is $600 billion and we strongly believe, and there are two local examples, that over time our obtainable market of $18 billion is highly achievable.

Traction: A$55m fund under management, A$100m pipeline of opportunity through retail intermediaries, increase in positive search reviews from offshore institutional investors through global databases and increasing penetration of engagement with leading global asset consultants with capacity to award large investment mandates.

Distribution / Sales / Revenue Model

  • Successful funds management businesses are very profitable business models which frequently experience exponential growth over shorter period of time as financial advisor typically award $5-20m+ mandates and asset consultants award $100m+ mandates once the funds are approved for their model portfolios.
  • This specifically today represents a significant opportunity for Insync to take market share as competitors are not addressing the problem.
  • Investors in the business will benefit from recurring and growing fees off a fixed cost base resulting in 40%+ margins and high return on equity of 50%+ on a sustainable basis as funds under management grows. This results in a high recurring income stream highly valued by investors.

Team

  • 5 person investment team with 3 having average experience of 30 years each, higher than the industry average, at leading global and domestic asset management firms.
  • 3 person distribution team with leadership roles and track records at prior firms.
  • CEO with experience in senior finance positions in top listed Australian corporates.

Competitive Advantage

The Secret Sauce is our internally developed algorithm and the very high quality of our people delivering a result that is superior to our peer group.

The results can be seen in both:

  • The very strong performance numbers the two funds have generated on an absolute basis and a relative basis versus the benchmark.
  • The portfolio of stocks have captured greater than the market upside when markets are rising but what have also, fallen less than the market when markets are falling.

Positioning in Marketplace

The fund’s unique investment strategy and highly attractive risk and return characteristics are highly valued by investors seeking to achieve their investment and financial goals in what is likely to be a low returning environment.

As both the protected fund and long only fund are high performing funds it is strongly positioned to displace existing incumbents particularly after the recent downside volatility which is resulting in wider dispersion of investment returns amongst the peer group.

Milestones

With the key pillars for business success (product, process and people) in place, our key focus is to accelerate the growth in Funds under Management (FUM).

Key milestone growth goals over the next 3 years are:-

  • 1st inflection point: double FUM to $100 million by October 2020 through retail penetration.
  • 2nd inflection point: lift FUM to $400 million by June 2021 through institutional mandate(s) and continued retail momentum.
  • 3rd inflection point: lift FUM above $1 billion by June 2022 through accelerated growth in all distribution channels.

Exit Strategy

Quality funds management businesses are in high demand with many examples of a trade sale to a very large established aggregator and IPOs are also common. Magellan and VGI are examples of IPOs that recently achieved a peak stocks market capitalisation of $8.9 bn and $970m respectively having listed their businesses in 2008 and 2019 respectively. The board aims to deliver a recurring and attractive dividend stream to all shareholders in the business.

Performance

Investment Offering

Insync is seeking to raise $1 million in equity at an issue price of $10 per share. The capital will allow us to:

  • Build critical marketing and distribution presence to drive investor awareness
  • Add additional resource credentials and research endorsements
  • Invest in additional systems and support to gain penetration into the institutional market

Working through 3 periods of accelerating growth we are forecasting the annualised profit per share to increase to $16+ by 2025. At 10 times average earnings (before tax) this gives each share a value well in excess of $100 per share by 2025.

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