What is the stock?

HUB24.

How long have you held the stock?

We initially acquired HUB24 in October 2017.

What do you like about it?

HUB24 is a leading investment platform with growing advisor awareness and a leading customer proposition. HUB24 is winning market share at an accelerating rate, which will translate into rapid funds under administration, revenue and earnings growth. 

How is it better than its competitors?

It has multiple advantages over its incumbent competitors and is benefiting from a longer-term structural shift in advisors to independence. The highly regarded Investment Trends survey finds HUB24 is ranked first in overall platform satisfaction as well as managed accounts functionality.

What do you like about its management?

HUB24 is run by a strong management team, which has extensive experience in building investment platforms, and are delivering on a well thought out long-term strategy. We believe they are capable and incentivised to continue the excellent execution seen to-date.

What is your target price?

We do not have price targets. We buy or sell based on our expected risk adjusted relative return within the portfolio over our five-year investment horizon.

At what point would you sell it?

When the Internal Rate of Return falls below our threshold, which is the risk free rate plus an equity risk premium. Other reasons to sell may be due to a significant, unexpected, change in the management team or a change to the business model.

How much has it added to your overall portfolio over the last 12 months?

HUB24 has been a strong performer since it listed and is up approximately 50% since we acquired it.

Where do you see the value?

HUB24 is building a strong competitive moat around its business, driven by a client-centric philosophy that is best summarised as helping advisers serve clients better, automate more workflow, reduce administration and compliance burdens, and generate new revenue streams. This moat is continually built upon by rapid platform innovation and functionality development, which has led HUB24 to taking a growing share of industry net-flows; a trend we expect will continue.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.