31 October 2011
Yellow Brick Road Holdings Limited (ASX Code : YBR) ("Yellow Brick Road") is pleased to announce that it has signed a shareholders’ agreement with Coolabah Capital Investments Pty Limited (“Coolabah Capital”) to enable Yellow Brick Road to commence internal manufacturing of funds management solutions.
Under the agreement, Yellow Brick Road and Coolabah Capital have established a new entity, YBR Funds Management Pty Ltd (“YBRFM”), which will seek to develop simple and safe cash-like, fixed-income and other related investment products for Yellow Brick Road’s current and future customers.
The vertical integration to be achieved via YBRFM will help Yellow Brick Road diversify its cash-flows and permit Yellow Brick Road to move up the product value-chain. YBRFM will develop a range of low-risk, high return, high liquidity, enhanced cash, variable and fixed income solutions. These solutions have been created to satisfy investor appetite for less volatile asset-classes, and will support young Australians looking to maximise their savings, give investors an alternative when looking to diversify their investments away from the volatility of the sharemarket, and provide retirees with safer, more effective ways of investing their retirement nest egg.
Yellow Brick Road's Executive Chairman Mark Bouris said, "Yellow Brick Road Funds Management has been developed to democratise access to funds management and make top end of town investment advice available to all Australians, not just the chosen few. In the 90’s, I took on the banks and disrupted the market by making good value home loans available to the masses. Today with the launch of YBR Funds Management, our team is delivering a real alternative to the market across the entire wealth management spectrum. The establishment of YBR Funds Management allows Yellow Brick Road to bring smart ideas, advice and products to Australians and to move into higher-margin activities that are in increasing demand amongst our customers."
The Directors of YBRFM are Matt Lawler, CEO of Yellow Brick Road, Scott Walters, Yellow Brick Road’s Head of Product Development, Darren Harvey, Chairman of Coolabah Capital, and Christopher Joye, a leading financial economist.
Mr. Harvey has spent more than two decades working in the fixed-income markets, including 10 years at Deutsche Bank in Sydney, where he was a Director of Fixed-Income and Head of Option Trading, specialising in interest rate solutions, and in London, where he was a Director in Deutsche Bank’s proprietary investment team focusing on fixed-income strategies. Mr Joye is regarded as one of Australia’s leading financial economists, commentators and innovators, and is a director and founder of the award-winning funds management business, Rismark International, which is 53% owned by Macquarie Bank.
Mr. Joye has also agreed to serve as a Strategic Adviser to the broader Yellow Brick Road group of companies on product development across home loans, deposit-taking, securitisation, funds management and general retirement & superannuation. In this role, Mr. Joye will supply portfolio construction and financial economics advice to enable YBRFM, and the Yellow Brick Road group of companies, to best capitalise on changing investment conditions.
Mr. Harvey added, "I am delighted to be able to help lead YBR Funds Management's investment team. In recent times, Australians have shown that they have a tremendous appetite for defensive strategies that protect against extreme market volatility, and the fixed-income asset-category fits as a complementary solution within Yellow Brick Road’s broader product suite. Mark Bouris and Matt Lawler have tremendous track-records in the non-bank and bank sectors, respectively, and I am delighted to be able to partner with them."
Mr. Joye said, “Having worked with Yellow Brick Road's founders in different capacities over the years, I am thrilled to be able to help contribute to the fulfillment of their differentiated strategic vision. Mark Bouris and the team at Yellow Brick Road have recognised that Australians today have vastly more exacting and sophisticated financial advice, savings, credit and wealth management needs than they did 10 or 20 years ago. For years I have argued that Australian investment portfolios are too heavily skewed towards volatile risk asset-classes, such as Australian shares, global shares, and commercial real estate. Domestic savers are in desperate need of genuine diversification, and YBR Funds Management has the opportunity to supply them with this via its suite of products.”
Mr. Bouris added, “With the investment talent assembled within YBR Funds Management, together with our growing brand and strong distribution network, we look forward to the imminent release of Yellow Brick Road’s first funds management products for Australian savers and investors through Yellow Brick Road’s national branch network.”
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