Asset Management for Not for Profits

There are many issues confronting Australian charities with regard to asset management. But one organisation believes it has come up with the right formula – one that understands the challenges of the Not for Profit sector whilst successfully managing organisations’ financial assets.

Merlyn Asset Management, combined with the Myer Family Office, believes it has the inside knowledge on how charitable organisations work as well as a proven financial track record.

Tom Cameron, Head of Research at Merlyn Asset Management, says no other fund managers are offering such a tailored service to cater for the Not for Profit sector.

Cameron says that most charitable organisations are too small to justify any dedicated in-house financial asset management staff or the use of asset consultants. Trustees don’t always have the time or experience to manage financial assets and executive staff are busy with administration.

He says Merlyn is proud of the performance it has been able to deliver for its clients and the extra capacity for public benefit it has created.

He says over the past 5 years Merlyn has had an average total return of 16.5% per annum and the specific fund it created for charities in April 2000 has had a total return of 34.7% to July 2001.

Cameron says the power of these returns is illustrated by one of their philanthropic clients who seven years ago gave $1 million to invest, has taken out $1 million since and still has over $1 million invested!

He says while its investment performance track record speaks for itself, Merlyn Asset Management is committed to improving returns for the benefit of the philanthropic sector as part of its business philosophy.

Each member of the Merlyn team has a direct personal involvement in charitable activities and an interest in the advancement of the philanthropic sector in society as a beneficial agent.

Put simply Cameron says Merlyn is not simply a ‘value manager’ or a ‘growth manager’ but it seeks to purchase stocks that create shareholder wealth over the medium to long term at reasonable prices and at low risk.

The Myer Family Office is the headquarters for the Myer family’s investment and philanthropic activities comprised principally of the Myer Family Company, Merlyn Asset Management, the Sidney Myer Fund and the Myer Foundation.

Merlyn currently manages portfolios for 25 clients ranging from investment companies, philanthropic foundations, private superannuation funds, individuals, estate and registered pool funds with $105 million under management.

Cameron says Merlyn has identified an alternative asset allocation strategy for charitable organisations utilising a recent change in the tax law. This change involves organisations receiving a cash refund of franking credits.

He says this strategy produces a better risk/return outcome in today’s investment environment.

Tom Cameron is also a member of the Corporate Fundraising Committee of the Salvation Army and a member of the Advisory Board of the Good Shepherd Foundation.

Martyn Myer, the founder of Merlyn Asset Management is also the Vice president of the Howard Florey Institute and a member of the Myer Foundation.

Tom Cameron at Merlyn Asset Management can be contacted in Melbourne on 03 9207 3079.