We believe that all investors should have the opportunity to invest in high-quality private assets alongside institutional investors. Drummond’s semi-liquid managed accounts provide advisors with a simple, scalable solution to diversify client portfolios.
An allocation to private markets provides diversification benefits, access to opportunities not available in public markets, and the potential to improve long-term risk-adjusted returns.
Harnessing an investor's long-term investment horizon and tolerance for some illiquidity opens opportunities for potential higher growth from private equity and income from private debt, when compared to a core public markets portfolio.
Source: Drummond Capital Partners. Risk and return assumptions based on Drummond’s 2025 strategic asset allocation review. Blending a portfolio of 85% strategic series 70/30 portfolio with a 15% allocation to the Drummond Private Markets Portfolio.
Private markets are investment opportunities in debt or equity that are not traded on public exchanges, typically involving direct, long-term financing of private companies or real assets.
A broad term that often reflects tangible investments whose value derives from their physical properties and the essential services they provide. Can include unlisted infrastructure, unlisted property, agriculture, commodities etc.
Real assets are attractive for their income and capital growth potential and the risk/reward trade off will vary but typically returns range from 7-12% p.a.
With a strong regulatory tailwind, private debt offers regular income and reduced volatility.
These are typically floating rate loans looking to deliver cash +3-7% p.a., the breadth of private debt strategies offers investors a diverse range of risk/return profiles.
Private equity can produce superior risk-adjusted returns through a focus on long-term value creation rather than listed market short-termism.
There is diverse opportunity set across single or multiple managers pursuing growth equity or buy-out deals. Investors typically expect returns of 12-15% p.a., in line with the higher equity risk.
The Drummond Private Markets Portfolio aims to provide investors with access to a core, high quality and diversified portfolio across both growth oriented and defensive assets. The portfolio is semi-liquid where underlying investment managers offer at least quarterly liquidity. The investment objective is to exceed the RBA cash rate +4% p.a. over a 5-years suitable for investors with a long-term time horizon.
The portfolio will predominantly be invested across Real Assets, Private Debt and Private Equity, with the allocations to each potentially shifting over time as the opportunity sets change. Below we provide an example asset allocation mix of the portfolio and its corresponding liquidity profile:
Source: BT Panorama, LSEG Workspace and Drummond Capital Partners. Inception 1 July 2024. Past performance is not indicative of future performance. The returns shown are net of investment manager fees which covers the costs of operating the managed portfolio option including responsible entity, investment advisory, custodian and administration services. The performance is also net of indirect costs which are costs incurred through its investment in underlying investments. Performance is calculated from the model portfolio within BT Panorama and as such may vary over time and vary by individual client. The RBA cash is derived from LSEG Workspace and adjusted by Drummond Capital Partners to include the +4% target performance.
Source: BT Panorama. Inception 1 July 2024. Past performance is not indicative of future performance. The returns shown are net of investment manager fees which covers the costs of operating the managed portfolio option including responsible entity, investment advisory, custodian and administration services. The performance is also net of indirect costs which are costs incurred through its investment in underlying investments. Performance is calculated from the model portfolio within BT Panorama and as such may vary over time and vary by individual client.
The Drummond Private Income Portfolio seeks to deliver consistent monthly or quarterly income through a diversified portfolio of Australian private credit, global private credit and listed credit. The portfolio is semi-liquid where underlying investment managers offer at least monthly liquidity. That said, investors should consider this to be a long-term investment with a time horizon of at least 5 years.
Whilst direct lending to corporates is the largest segment of the market, there has been significant growth in lending across the whole economy with investors able to gain access to many lowly-correlated and attractive sources of predominantly income generating assets. The investment objective is to deliver RBA Cash + 3% p.a. (net of fees) primarily through income while seeking to preserve capital, over a rolling 5-year period. Asset class allocations will change over time, however, below we provide example asset class allocations and liquidity profile of the portfolio:
Source: BT Panorama, LSEG Workspace and Drummond Capital Partners. Inception 1 July 2024. Past performance is not indicative of future performance. The returns shown are net of investment manager fees which covers the costs of operating the managed portfolio option including responsible entity, investment advisory, custodian and administration services. The performance is also net of indirect costs which are costs incurred through its investment in underlying investments. Performance is calculated from the model portfolio within BT Panorama and as such may vary over time and vary by individual client. The RBA cash is derived from LSEG Workspace and adjusted by Drummond Capital Partners to include the +4% target performance.
Source: BT Panorama. Inception 1 July 2024. Past performance is not indicative of future performance. The returns shown are net of investment manager fees which covers the costs of operating the managed portfolio option including responsible entity, investment advisory, custodian and administration services. The performance is also net of indirect costs which are costs incurred through its investment in underlying investments. Performance is calculated from the model portfolio within BT Panorama and as such may vary over time and vary by individual client.
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