Future Fund Watch

[Hawk the Demon 556]

I am looking for help from financially astute Demonlanders.

Pretty much our entire asset base is now represented by our new Future Fund.

At the AGM, the CEO reported that our Future Fund would start off with $23.7 million.

Extracts from our Financial Report are oultlined below:

As outlined previously, the sale of Bentleigh Club settled just after the financial year end.

The Board have established a Future Fund with the proceeds of the sale, with the purpose of the Future Fund to underpin the long-term financial sustainability of the Club.

The Future Fund will achieve this by:

• Preserving and growing the capital base of the Club. A significant capital base is an important protection mechanism for the Club if there are any unexpected shocks to the football industry or Club environment in the future;

• Providing an annual income stream that supports the football activities of the Club. This will replace, and is planned to exceed, the previous gaming income of the Club.

It is important to note that it is not intended that the Future Fund be utilised for the following activities:

• Investment into Club Capital Expenditure projects, including but not limited to Training & Administration Facilities;

• Funding the day-to-day operating activities of the Club, including but not limited to Football Operations costs;

• Repaying debt incurred as a result of operating losses of the Club, or the activities outlined above.

The Future Fund will be overseen by the Club’s Investment Committee. The Investment Committee is comprised of representatives of the Board, Executive and independent members with significant experience in financial markets and investment activities.

The Board has appointed Morgan Stanley as Fund Manager for the Future Fund.

It is expected that the implementation of the Future Fund investment strategy will be completed by mid-2023, with the first full year earnings from the Fund expected in 2024.

Questions:

1. Why did we choose Morgan Stanley and what is their mandate?

2. What about the other $10 million in cash we had at 31 Oct 2022 - why is it, or a part of it, not also in the Future Fund? (We sold Leighoak for $10.7 million)

3. Given we have known for 12 months that the Bentleigh proceeds were coming in early November 2022, why will we only have our investment strategy completed by mid -2023?

4. Given the list of things the Future Fund is not for, I was interested to hear the CEO say that we may also use the Future Fund 'to take advantage of any strategic opportunities that arise'. He then said don't ask me what they might be....

 

[whatwhat say what 19,541]

these questions are pertinent to the board only and would be commercial in confidence and not for public consumption

[spirit of norm smith 13,312]

Yes what to spend it on. The strategy for a new home, new training base and administrative offices in one central location is a long term vision.  It has been over 40 years in the planning. Such decisions cannot be rushed.  Feasibility studies are an important process and the 8 prior commissioned studies by prior boards have given us important insights.  The discovery process is a critical pathway on the journeys to eliminate any headwinds and manage our journey to our North Star.  The thoughts around basing our future at the Albert Park precinct, Yarra Park, Goschs paddock,  Kew East, Bentleigh, Caulfield Park or the Junction oval are important cash outlays to many consultants over many years to help them acquire their holiday homes across the Mornington peninsula.  I’m sure this time Gary Pert will not err in appointing many consultants across many years for many millions but actually find a workable achievable outcome to a home for the Melbourne Demons within 6 kms of the MCG.  

[Fritta and Turner 3,819]

I'll have a crack and by the way I am going off the info supplied above.

1.  Why Morgan Stanley; dunno and probably a question for the board.

2.  10 mill in cash; why isnt in in the FF?  well it appears that the capital of the FF can only be invested, not spent, so if you put the 10 mill in the FF you cant get it back out, except indirectly when the fund pays a dividend.  Perhaps the board wants a $10 mill war chest for like training facilities?

3.  Dunno  but you dont want to create your investment strategy too early as it could be out of sync with the latest financial crisis.  TBH I think it is more important that any strategy is reviewed regularily.

4.  Wotz the question?

[Neil Crompton 4,817]

If it were me, I’d change my game plan and start talking footy so that people would start listening to me. 

[Hawk the Demon 556]

2 hours ago, Jontee said:

I'll have a crack and by the way I am going off the info supplied above.

1.  Why Morgan Stanley; dunno and probably a question for the board.

2.  10 mill in cash; why isnt in in the FF?  well it appears that the capital of the FF can only be invested, not spent, so if you put the 10 mill in the FF you cant get it back out, except indirectly when the fund pays a dividend.  Perhaps the board wants a $10 mill war chest for like training facilities?

3.  Dunno  but you dont want to create your investment strategy too early as it could be out of sync with the latest financial crisis.  TBH I think it is more important that any strategy is reviewed regularily.

4.  Wotz the question?

Re the 4th - it seems the primary purpose of the Future Fund, clearly stated, was to preserve and grow the capital base, but then at the AGM a new element was introduced, i.e. that it was possible that the Fund could be used for an unspecified strategic opportunity that might arise - and that did not seem to include a training facility. Found that curious.

[Sir Why You Little 34,776]

The Purpose of The Future Fund

Win 10 Premierships in the next 10-12 years

Thankyou, that is all

QED

[drysdale demon 4,194]

3 hours ago, Hawk the Demon said:

I am looking for help from financially astute Demonlanders.

Pretty much our entire asset base is now represented by our new Future Fund.

At the AGM, the CEO reported that our Future Fund would start off with $23.7 million.

Extracts from our Financial Report are oultlined below:

As outlined previously, the sale of Bentleigh Club settled just after the financial year end.

The Board have established a Future Fund with the proceeds of the sale, with the purpose of the Future Fund to underpin the long-term financial sustainability of the Club.

The Future Fund will achieve this by:

• Preserving and growing the capital base of the Club. A significant capital base is an important protection mechanism for the Club if there are any unexpected shocks to the football industry or Club environment in the future;

• Providing an annual income stream that supports the football activities of the Club. This will replace, and is planned to exceed, the previous gaming income of the Club.

It is important to note that it is not intended that the Future Fund be utilised for the following activities:

• Investment into Club Capital Expenditure projects, including but not limited to Training & Administration Facilities;

• Funding the day-to-day operating activities of the Club, including but not limited to Football Operations costs;

• Repaying debt incurred as a result of operating losses of the Club, or the activities outlined above.

The Future Fund will be overseen by the Club’s Investment Committee. The Investment Committee is comprised of representatives of the Board, Executive and independent members with significant experience in financial markets and investment activities.

The Board has appointed Morgan Stanley as Fund Manager for the Future Fund.

It is expected that the implementation of the Future Fund investment strategy will be completed by mid-2023, with the first full year earnings from the Fund expected in 2024.

Questions:

1. Why did we choose Morgan Stanley and what is their mandate?

2. What about the other $10 million in cash we had at 31 Oct 2022 - why is it, or a part of it, not also in the Future Fund? (We sold Leighoak for $10.7 million)

3. Given we have known for 12 months that the Bentleigh proceeds were coming in early November 2022, why will we only have our investment strategy completed by mid -2023?

4. Given the list of things the Future Fund is not for, I was interested to hear the CEO say that we may also use the Future Fund 'to take advantage of any strategic opportunities that arise'. He then said don't ask me what they might be....

 

Pretty clear that your objective is only to stir up [censored] against the board and the admin. I would give it a rest if I were you.

[dworship 3,342]

2 hours ago, Neil Crompton said:

If it were me, I’d change my game plan and start talking footy so that people would start listening to me. 

On current evidence, the likelihood of anyone listening to Hawk regarding any matter, diminishes every time he posts.

[La Dee-vina Comedia 16,525]

Hawk the Demon's motives for raising this issue might be questioned, but the specific questions he has asked are not unreasonable. Nor are they particularly important. Morgan Stanley might have been selected because they provided the best proposal to the club's request for expressions of interest from potential fund managers. The $10 million from Leighoak may have been earmarked for a different purpose. I don't see what the problem is with the investment strategy not being ready by November 2022. It's not like the money would be sitting idle. I'd rather take the time to get it right.

All the above might be wrong answers, but unless someone's embezzled the Leighoak proceeds and the club isn't aware of it, I doubt whether any other answer would change people's perceptions about the Board's actions. 

 

[rpfc 27,623]

20 minutes ago, La Dee-vina Comedia said:

Hawk the Demon's motives for raising this issue might be questioned, but the specific questions he has asked are not unreasonable. Nor are they particularly important. Morgan Stanley might have been selected because they provided the best proposal to the club's request for expressions of interest from potential fund managers. The $10 million from Leighoak may have been earmarked for a different purpose. I don't see what the problem is with the investment strategy not being ready by November 2022. It's not like the money would be sitting idle. I'd rather take the time to get it right.

All the above might be wrong answers, but unless someone's embezzled the Leighoak proceeds and the club isn't aware of it, I doubt whether any other answer would change people's perceptions about the Board's actions. 

 

Probably earning 5% somewhere… 

Edited February 28, 2023 by rpfc

[bluey 893]

Incidentally, it’s not a lot of money, and we elected the board to manage our affairs.

[Sir Why You Little 34,776]

2 minutes ago, bluey said:

Incidentally, it’s not a lot of money, and we elected the board to manage our affairs.

It’s a lot of money if it is invested wisely 

[mo64 5,240]

Point 4. The board intends to utilise the Future Fund to subsidise the costs of the 3 month election campaigns that Deemocracy are proposing for every board vacancy.

[bluey 893]

7 minutes ago, mo64 said:

Point 4. The board intends to utilise the Future Fund to subsidise the costs of the 3 month election campaigns that Deemocracy are proposing for every board vacancy.

Board members are not allowed a stipend, in general they are usually good fellows with particular skills, with the club at heart.

[Fritta and Turner 3,819]

1 hour ago, rpfc said:

Probably earning 5% somewhere… 

NAB is paying me 4% for a couple of $ K so probs like yeah

[Diamond_Jim 11,979]

Excuse the tautology but Future Funds are the future if the fund raising of US Colleges is any guide.

It's either this or private ownership similar to US professional leagues or European soccer.

The murmurings about private equity taking a stake in Cricket Australia are interesting/concerning. Could that ever happen with the AFL

[Hawk the Demon 556]

3 hours ago, La Dee-vina Comedia said:

Hawk the Demon's motives for raising this issue might be questioned, but the specific questions he has asked are not unreasonable. Nor are they particularly important. Morgan Stanley might have been selected because they provided the best proposal to the club's request for expressions of interest from potential fund managers. The $10 million from Leighoak may have been earmarked for a different purpose. I don't see what the problem is with the investment strategy not being ready by November 2022. It's not like the money would be sitting idle. I'd rather take the time to get it right.

All the above might be wrong answers, but unless someone's embezzled the Leighoak proceeds and the club isn't aware of it, I doubt whether any other answer would change people's perceptions about the Board's actions. 

 

If you have known for twelve months that you will have $24 million in the bank by early November and that you are going to establish a Future Fund with it, why is it that your investment strategy will be completed by mid-2023, and you first full year earnings will come only in 2024?

 

Shouldn't that all have been sorted and the funds so deployed in November?

[Queanbeyan Demon 6,083]

I thought this thread was going to be about our little league side.

[drysdale demon 4,194]

11 minutes ago, Hawk the Demon said:

If you have known for twelve months that you will have $24 million in the bank by early November and that you are going to establish a Future Fund with it, why is it that your investment strategy will be completed by mid-2023, and you first full year earnings will come only in 2024?

 

Shouldn't that all have been sorted and the funds so deployed in November?

No.

[Diamond_Jim 11,979]

A proper question for the Board is whether the Morgan Stanley mandate is limited to ethical investments

[Queanbeyan Demon 6,083]

On 2/27/2023 at 4:45 PM, Hawk the Demon said:

1. Why did we choose Morgan Stanley and what is their mandate?

2. What about the other $10 million in cash we had at 31 Oct 2022 - why is it, or a part of it, not also in the Future Fund? (We sold Leighoak for $10.7 million)

3. Given we have known for 12 months that the Bentleigh proceeds were coming in early November 2022, why will we only have our investment strategy completed by mid -2023?

4. Given the list of things the Future Fund is not for, I was interested to hear the CEO say that we may also use the Future Fund 'to take advantage of any strategic opportunities that arise'. He then said don't ask me what they might be....

1. Apparently Morgan Stanly showed excellent promise in the U19s, then did a groin and missed the entire next season. Comes off half back quite nicely. Mandate is to restrict oppo's half forwards
2. The 10M in cash is for 1) the umpies when we play Jeelong/South/Footscray during the finals and 2) ward off Bartlett
3. I hear from an insider that the Club is considering investing in tennis balls - very high rates of return
4. Strategic opportunity = buying all the The Filth's reserved seating at Headquarters for the next 10 years so we don't have to get fumigated upon leaving the ground. 

 

Edited February 28, 2023 by Queanbeyan Demon

[BDA 20,553]

10 minutes ago, Queanbeyan Demon said:

• I hear from an insider that the Club is considering investing in tennis balls - very high rates of return
• Strategic opportunity = buying all the The Filth's reserved seating at Headquarters for the next 10 years so we don't have to get fumigated upon leaving the ground. 

I belly laughed. Cheers QD

[Demonsterative 2,097]

Is Morgan Stanley Kozzy’s manger? Family member? Or at least seen Kossy play? 
 

I’ll take anything connected at this stage 🤣😂🤣

[rpfc 27,623]

$23m will literally earn a $1m a year sitting in the bank in interest.

So sitting on your hands has its advantages.