CBA sell out of CUP, page-9

Always interesting when more than one HC account comments just on one stock!

Had a shot at your questions:

Existing principals have an opportunity to buy back equity in their firms, and at reasonable valuations. There is funding available to do so. There is also an opportunity for younger principals with no equity currently, to participate as owners. This is better than one or two principals owning all of the equity, with no succession plan when they need to exit.

New firms joining CUP would have to decide between a 100% owned model (eg Findex), a 50% owned model but with loss of branding and control (eg KPG) or a partnered model where CUP take a stake/inject capital and the firm retains branding & the principals, for the most part, retain control of how they run their firm, while also retaining enough equity to incentivise them to keep growing.

I think its clear what type of principal the new CUP model attracts compared to KPG, Findex, etc.

The old CUP model was broken, and the incentives became more and more misaligned the larger the firm became. This new model is highly scalable. It gets stronger the larger the network grows and the larger the individual firms are.

Turnaround has indeed been spoken about for a long time. But this is a completely new board and management team. At least they have put their money on the line. You very well could be right, but it will take time to find out.

@now, I would be very interested in your thoughts on how the new CUP model compares to KPG? Findex? A bunch of others? What are the faults? And what do other players do better? Genuinely keen to hear your insights.