Professional Partnerships: A Rare, Defensive Asset Class Now Open to Investors

Next is Luke Moore, CEO at Oriana Investments.

Luke has over two decades of experience building and managing institutional quality investment portfolios.

And today he will be presenting a unique opportunity, the Oriana Professional Partners Fund.

The fund provides access to established profitable professional services businesses, a market which has had high barriers to entry and strong defensive characteristics.

The fund is now selectively open to outside investors for the first time.

Welcome and over to you, Luke.

Thanks, Aaron, and thanks, everyone, for tapping in today.

As Darren mentioned, I'm going to go through the Orellana Professional Partners Fund, which we believe provides a compelling opportunity for sophisticated and wholesale investors to access a theme where we believe that there's some great opportunities to deliver great outcomes for investors going forward.

I'll go through the detail.

of the fund shortly but before I do I thought I would just run through a little bit about Oriana and our background because some of you may not have heard of us previously.

So for the past 20 or 25 years we as a firm have been investing in various opportunities in which we have internal expertise.

They largely

are focused on the property or real estate sector, as well as financial services and spanning both financial investments that we make, but also investments in operating companies.

We've been doing this for a long time.

We very much focus on investing in areas where we have internal expertise and in sectors and opportunities where we believe that there's an opportunity to provide superior risk adjusted returns for both our firm, our partners, and also our investors.

The themes that I mentioned that we invest in are largely, again, around real estate and financial services both from an equity and a debt perspective.

We currently have four funds in the market that are available today.

three of those being in the real estate sector.

Of those three, one of them is a specific strategy that's focused on early education, and it's an early education rate, so an equity property fund.

The other two property funds that we have there are credit or debt income funds.

And the last but not least, the professional partners fund, which I'll be going through today.

So in terms of the professional partners fund and professional services, we see real opportunity for investors to access a theme which has very strong sectoral tailwinds.

And where those tailwinds are coming from is really off the back of the Royal Commission into Banking and Financial Services back in 2018.

We as a firm have been invested in this space prior to that time.

we saw an opportunity leading into and through the Royal Commission to increase our exposure to this theme on the basis that increased regulatory focus and an increased focus on delivering better outcomes to end investors and recipients of financial advice

was a real opportunity for us to tap into a sector as it went through that process of professionalising.

So that theme for us has been a great place to be, and we're continuing to see that evolve.

And what we have now in our view and what we're seeing in this opportunity is some really interesting supply and demand imbalances that provide great opportunities for investors, but also a time when increased use of technology and other

services that are utilised in delivering wealth management and financial planning services to clients really help advise businesses to provide or deliver better margins from within their business.

So what we're seeing today, and I'll skip through to the next slide, which goes into this in a little bit more detail.

What we've seen through the other side of the Royal Commission is advisors exiting the industry and advice principals exiting the industry over the past six or seven years.

off the back of increased compliance obligations and education obligations and a real transition away from what the sector was previously, again, into that professionalization of the sector.

So what that's translated to is significantly fewer advisors and advice firms in the market today than what they were seven or eight years ago at a time when you're seeing more Australians seeking financial advice.

So we're obviously seeing increased wealth across the country and increased complexity in investors and recipients of advice's personal situations.

So that supply and demand imbalances just really means that

good quality and professionally ran advice businesses are growing significantly from an organic perspective.

We're also seeing now an ageing advisor base and the existing principles of a big number of advice firms across the country starting to think about succession and how they can realise the asset of their business, the asset that they've built.

how they can realise the value of their business while still looking after their clients and transitioning their business and their clients across to a new advisor.

So what that means for us and for the industry is that there's significantly M&A opportunities and there's opportunities for advice firms who are at an earlier stage of their life cycle to invest in those firms that are looking to exit in the next zero to three years and beyond.

And those M&A activities

also present a great opportunity to build the earnings and the valuations of advice businesses across Australia.

What that translates to as the bottom box on the left hand side shows there is very attractive risk adjusted returns.

Well run advice businesses are highly profitable.

They're growing organically and with the right services that are provided to those businesses to ensure that we're providing the right governance and the right infrastructure around these businesses to operate well at a time when we can also help them grow their margins through the better use of technology means that we can deliver great outcomes to the shareholders of those businesses and do it in a really risk adjusted, a strong risk adjusted way.

And that is because

highly profitable, providing great income and very stable cash flows in terms of the recurring revenue that these businesses generate.

There's a high barrier to entry in this space, so one of the intended consequences of the Royal Commission was an increase in the expectations of the types of services that advisors deliver and to deliver professional services that are in the best interest of investors

So it's a very personalised and professionalised service that's being provided.

And it's not a space that many investors are able to access in terms of owning and operating advice businesses.

What our fund is doing and what we're bringing to market is the opportunity for investors to access this theme, which does have high barriers to entry by tapping into the capability, the expertise and the experience that we have in running these businesses.

So in terms of Oriana and our financial advice or wealth management platform, we currently have now 39 practices across our licensee model in Australia.

We're managing now over $18 billion of assets and the revenue that's being generated across the advice licensee model that we're running is now in excess of $70 million.

This gives us a great opportunity to work with those practices on our platform.

who are looking at growing via acquisition and those that are thinking about succession and exiting the industry and realising the value of their asset, we're now coming in and providing capital to those that are wanting to grow.

to acquire those that are looking to exit the industry and via our capability in managing that M&A activity, managing the operations and the governance and the processes that these businesses run, gives us a great opportunity to match these buyers and sellers of businesses and participate in the earnings growth and profile of these businesses as they continue to grow and mature and professionalise over the coming years.

What's critical as part of this model and anybody that is looking to invest in this theme is that you have a capable quality team sitting behind you.

The Oriana Partnerships team is led by Jonathan Christie, as you can see in the org chart here.

Jonathan Christie has significant experience in running large institutionally owned and operated advice practices, as well as boutique and other independent advice practices over his sort of 25 or 30 year career.

What John and we at Oriana have done is built a team sitting behind him to really engage with advice businesses to again provide great outcomes to clients, but also really focus on delivering

better outcomes from a business perspective for those partners that we're working with.

And as you can see here on the right side of this chart, we're investing heavily in technology, which is a real theme of this space.

And what we're seeing and have seen in the past few years and something that we expect to sort of

continue to evolve and bring benefit to advice practices is the use of technology, both to run more efficient practices and to better engage with clients, but also to prepare for the changing landscape in the advice industry or profession as consumers start to demand a different type of advice proposition and start to consume advice in a different way than what people have previously.

We've got a great capable team who engage heavily with the advice practices that we provide services to today and own, and it's an area that we're really heavily focused on investing in to continue to deliver better outcomes, both for friend clients and the businesses that we're investing in.

A little bit on our team and the others that are sitting in the business here, and I think these slides will be shared with you after this presentation, so I won't spend

too much time speaking about those here on this slide.

What I thought I would do, just as we've come to the end of the webinar, is just to go through a real-life example of an investment that we've made in an advice practice here in Melbourne, and one that will feature in the portfolio that we're bringing to market as part of this fund.

As you can see here, we made an investment in a firm in 2022,

And between then and now, leading into this year, what we've been able to do is grow this business's revenue, earnings and valuation significantly over that three-year period.

And you can see some of the numbers that we've been able to deliver on the left-hand side of this chart, which really shows how those sectoral tailwinds that I mentioned before are translating into better outcomes for the businesses in which we're investing in and the sector as a whole.

We've recently completed an acquisition in this business, which you can see there in 2025.

The benefit of that acquisition now will start to play through over the course of the next 12 months.

And you can see on the right-hand side of this chart, the benefit that that acquisition will bring to this business as it continues to grow and to sort of absorb that acquisition that we've made into the business.

We've now identified a third acquisition that will roll into the business early in 2026.

and that will again provide further upside from revenue earnings and evaluation perspective of this business.

Put really simply in this fund,

have a pipeline of businesses that we will look to replicate this strategy with.

We'll do that selectively and with the right businesses where we have alignment from the way that we go about running a business from a philosophical and a cultural perspective.

Also that with the underlying acquisition businesses that we're investing in and also making sure that right through the value chain these businesses are providing the right services to clients that are valued

and that we can see a really clear path to continued revenue and earnings and valuation growth.

Here's a little bit of detail around our fund.

As you can see here, we're using top tier service providers in managing the fund.

Governance is critical.

We want to make sure that we're using those top tier providers that we can access in the market.

And of course, on the top left hand side is the target return profile, which is a

material return and one that is a translation of the opportunity that we're seeing in the space.

Really importantly from a private equity fund, which is what this fund is.

the fund will generate a high degree of income from day one.

You can see there that the fund will be providing semi-annual distributions.

Given the fact that we're investing in mature, profitable and growing wealth management and financial services businesses, we're able to provide a high degree of income from inception of this investment opportunity and more than half of that return will be delivered

from that income return.

The rest will be delivered from the growth and the valuation of these businesses as we invest in them and implement our capability to grow them over time.

So I'll stop there.

I think this last slide really just provides a couple of points here around what our capability is.

We've spent the last 10 years really refining our proposition here and our model in the Australian market to provide a platform for an enduring and credible financial services or professional services platform that we're now providing the opportunity for investors to co-invest alongside us

and access this opportunity at a time when we think it's a very compelling point in time to be investing in this theme.

So Darren, I'll pause there and throw back over to yourself.

Thank you very much, Luke.

It's certainly an unusual or unbeneficial return profile for investors for a private equity fund.

Not one I've seen quite like that in my travels.

What do you think has made investing in professional partnerships so difficult for most investors?

Why maybe hasn't this been done before, do you think?

Yeah, look, I mean, this is an evolving space.

There have been big listed players who have exposure to this theme.

Historically, the advice professional or industry in Australia has been dominated by the banks and the Royal Commission back in 2018 really drove the deinstitutionalisation of advice.

So that's a way to say that shifting advice ownership away from the large banks.

Historically, the way that you could get access to this space is by owning the banks with larger exposure into this space.

There are some other listed players in this space who do provide access to this theme.

But for the most part, these are privately ran businesses who are SMEs and maybe slightly larger in some cases, but they're typically privately owned and helped by the principles that operate these businesses.

So as the industry has evolved and transitioned into a profession,

There are more institutional investors that are coming back to look at investing in this space, but it's a space that requires a high degree of professionalism.

And given the private nature of this sector, it's just been one that has not been open broadly for investors to date.

And Luke, how does Oriana's expertise in building profitable growth focused partnerships, how does that translate into tangible outcomes for investors in this fund?

A real key pillar of Oriana and our investment capability is that we invest in sectors and things where we have internal expertise.

So we're not just financial investors.

We are advice professionals.

John Christie and his team, who I showed before, this is what they do on a day in, day out basis.

It's all they focus on doing.

And it's the platform that we've built over the course of the last 10 years, really is a way to increase our exposure as a theme into this space.

So why is it us and our capability?

It's a theme that we're investing in for ourselves and for the benefit of our firm.

and to generate returns for Oriana.

But it's also now, given the size and the scale of the opportunity here and the evolution of our business model, we're providing the opportunity for investors to invest alongside us and access those deep market connections, that IP and that capability that we have across the group.

Thank you for your time, Luke.

That's been extremely insightful and a very, very interesting opportunity.

Thanks, Aaron.