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Mayfair Platinum Insights: The investment strategy of the Mayfair 101 Group

This is the second in a five-part series explaining Mayfair Platinum and its innovative investment strategy.

Berkshire Hathaway - Mayfair Platinum Insights: The investment strategy of the Mayfair 101 Group
Mayfair 101 is focused on “activating opportunities that matter” for investors

In our last article, we covered how Mayfair Platinum creates an alignment of interests with its investors by providing fixed income solutions that demonstrate its commitment to having ‘skin in the game’ with its investment strategy.

In this article, we examine the investment strategy of the Mayfair 101 Group more closely, including the sectors it invests in and investment principles. Investors should be mindful that by choosing to invest with Mayfair Platinum their funds are loaned to other entities within the Mayfair 101 Group which deploys them in line with its capital management strategy.

Mayfair 101’s underlying investment philosophy

Mayfair 101 emphasises its focus on “activating opportunities that matter”. It is something the average investment company sometimes overlooks in their hunt for yield or capital growth, or to drive share price.

Instead, the family-owned group identifies, activates and nurtures opportunities that generate value by bringing the Mayfair brand and its considerable resources including finance and manpower, to opportunities that can have a positive social impact and improve the lives of those their investment touches.

Diversification as a security measure

Like other investment conglomerates such as Berkshire Hathaway and Virgin Group, Mayfair 101 Group has a heavily diversified portfolio of assets across a range of sectors and geographies including companies it holds majority and minority interests in.

Similar to its well-known counterparts, Mayfair 101 evidently considers that diversification is a crucial component required for weathering economic or political uncertainty.

This diversification isn’t just important for investors in Mayfair Platinum but is of paramount importance to the group itself which has considerable skin in the game with its investment strategy and therefore wants to ensure all funds are collectively deployed in a responsible, considered and well-managed way.

Where Mayfair 101 invests

Mayfair 101’s assets can be grouped into the following five key areas:

  • Property – local and international real estate including development and property management;
  • Financial Services – including corporate bonds, SME credit and wealth management;
  • Emerging Markets – high growth countries with high rates of mobile phone and internet uptake;
  • Media – which provides the Group with considerable buying power to market its portfolio companies; and
  • Ventures – earlier stage and pre-IPO investment opportunities which the Group has limited exposure to yet considers an important part of a balanced overall portfolio.

When you consider the Group holds asset in 10 countries across the variety of sectors mentioned above it would be fair to say that one might be hard-pressed to find a similar level of diversification in other investment products, which is a key component of Mayfair 101’s risk management strategy.

Why these sectors make sense

There is no denying the love Australian investors have with property, which is a growing sector within Mayfair 101’s portfolio.

In addition to the Group’s recent purchase of Dunk Island in Queensland, it has secured more than 250 properties on mainland Mission Beach, making it the largest landholder in the region.

These properties were bought by Mayfair 101 at close to the bottom of the market and the Group has cleverly leveraged its brand profile to bring significant awareness to the region to drive up values.

When you consider Dunk Island used to by the jewel in the crown of Far North Queensland it only makes sense that it is capable of returning to that position again, which is something Mayfair 101 clearly has its sights set on achieving.

Financial Services is a sector that is undergoing radical change with the seismic shift in trust away from the banks.

Mayfair 101 has identified this trend ahead of time and invested heavily in non-bank lending and investment companies including Mayfair Platinum, IPO Wealth, M12 Global, Australian Business Credit and more recently, Okto Wealth, to name just a few.

Shift away from banks

The group appears to be banking on the shift away from the banks, which is becoming more evident as bank lending and investment capabilities deteriorate due to increased regulation and shrinking balance sheets. In particular, its interests in lending money to SMEs that the banks can’t or won’t lend to provides an important income stream for the group in supporting its distributions to investors.

It would seem the diversification Mayfair 101 has within this sector makes strong sense by both accessing and deploying capital through its various subsidiaries.

Emerging markets such as India are experiencing unprecedented rates of growth, both in terms of GDP and internet and mobile phone uptake. This is leading to significant opportunities for technology companies to ride the wave of significant user growth.

Mayfair 101 portfolio companies like Paymate (India’s largest B2B payments company which recently secured Visa as an investor) and Accloud (a company similar to Xero which is solely focused on Emerging Markets and has pre-contracted revenues of over US$6 billion) are already capitalising on this rapid growth providing significant uplift in value to support Mayfair 101’s growing balance sheet.

The Group also has interests in a financial services company in India, graphite mine in Sri Lanka and various other companies that service emerging markets due to the logical opportunity to achieve considerable growth whilst also assisting with achieving socially responsible outcomes.

Media is a sector the Group understands well with its managing director James Mawhinney previously heading up an ASX-listed digital media group which executed a strategy to acquire significant holdings in various Australian and overseas media-related companies.

It is a sector that can deliver considerable value, particularly when plugged into a group of companies that all require various forms of advertising and media buying services.

Marketing is undoubtedly one of the most effective ways to scale a business and a cost-effective media strategy deployed across Mayfair 101’s various group assets makes absolute sense in further strengthening its balance sheet.

Whilst investing in early-stage and pre-IPO companies may sound speculative, and it can be for those that simply write cheques and have no involvement in the business, Mayfair 101 takes a different view. By deploying its resources across management, finance, HR, marketing, public relations, sales process & system development and IT, the Group can quickly scale early-stage companies into serious industry participants.

Investments in these ‘venture’ style businesses are typically smaller for Mayfair 101 yet form an important part of a balanced portfolio where they are backing proven entrepreneurs and surrounding them with a support system to ensure their success. 

Modelled on some of the best in the business

Berkshire Hathaway’s head office has less than 25 staff yet manages over US$400 billion of assets. Google’s parent company, Alphabet, was set up to enable Google’s founders to invest in other non-search related companies as part of their diversification strategy. Virgin Group has enjoyed enormous success in building out its brand in a diverse range of industries which now sees the Virgin brand sported on more than 400 companies.

The common thread among all these companies is a nimble parent company with a heavily diversified portfolio to enable them to stand the test of time and back great businesses.

Mayfair 101’s James Mawhinney.

When we asked Mayfair 101 Group’s founder and managing director James Mawhinney about the resemblance of the Group with these industry giants, he said: “Our management team are firm believers in following the business models of the best rather than reinventing the wheel. 

“Virgin Group, Berkshire and Alphabet are among the most successful conglomerates in the world. They operate lean teams that enable them to deploy capital efficiently and have built brand profiles that enable them to obtain a competitive advantage in attracting and capitalising on the best investment opportunities.

“The Mayfair 101 brand is already gaining considerable recognition across a variety of industries and we will continue to diligently build out the group alongside our investors who have helped us activate some remarkable opportunities.”

Whilst Mayfair Platinum doesn’t currently provide investors the opportunity to invest in the upside of the group apart from its fixed income products, this niche focus on keeping its cost of funding down to help build out its balance sheet is proving effective.

If the Group continues on its current growth trajectory it would not be surprising to see Mayfair 101 quoted as a modern-day conglomerate that has intelligently deployed an investment strategy to create significant value and importantly have a positive impact on society.

In Part 3, we will take a closer look at the social impact side of Mayfair 101’s business model and how investors in Mayfair Platinum are helping back some significant “opportunities that matter”.

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on 12/11/19

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