I attended in Sydney last night, moderated by David Koch and it...

I attended in Sydney last night, moderated by David Koch and it was a great night, few of the questions / discussion points below.

They have been very active in acquiring and disposing of investments in the portfolio (turnover) in the last financial year - a key call out was a big reduction in the large cap portfolio which was acquired through the Milton merger, where they have reduced a lot of legacy holdings (such as the banks) and moved money elsewhere in the business, a key call out was moving funds into the private equity segment where they see more value at the moment.

They are beginning to look off shore for opportunities - this is the first I've heard of this approach but it is exciting. Todd talked about some discussions regarding potentially acquiring smaller fund managers and the like as opposed to trying to open up a Soul Patts office off shore and starting from scratch, the name and brand isn't globally recognized so they wouldn't be able to approach businesses in the same way they can in Australia, recruitment would be harder, so the optimal way would be via acquisitions and to build the Soul Patts style in from there.

There was a question regarding the swim schools business and how they have been tracking - doesn't surprise me as they are pretty tight lipped on the private equity side of the business in most reporting. They mentioned that the swim school business is cash flow positive, and after construction of a new school it takes about 1-2 years to become cash flow positive. They are still looking at the best ways to approach this business from a growth perspective, whether through organic growth or acquisition at this point. They also talked very highly of Ampcontrol's future prospects especially in it's role in helping heavy industry such as miners in their decarbonization journey, but also assist in the current electrification trend.

I was also blown away by the returns currently on offer through the credit arm of the business, they mentioned average returns in the ball park of 10-15% on most lending - they did note that it really is just a result of the current cycle with interest rates, and that larger banks are refusing to lend to riskier players which has opened up this market for smaller players. They stressed that they aren't just writing loans to anyone either and it's more partnerships they are looking for, potentially to go on the journey with the business depending on their needs, and that they need to fit the Soul Patts filters before anything gets signed and goes ahead. Another feature is that majority of the debt is senior secured debt which gives me a little more peace of mind. They seem to act as a consultant to businesses based on their needs, with optionality between funding via equity, debt or a combination depending on the scenario.

They are bullish on nuclear, but also on energy demand in general. Todd discussed energy shortages globally and how he sees demand for all sources in the energy mix especially boosted in Australia by population growth, and globally due to the AI trend at the moment - it really depends on the region and what is the most cost effective, what can be imported easily etc. they seemed very comfortable with their exposures to coal and uranium moving forward - I got the idea that they hold uranium companies both from an equity and credit lens.