The striving of Federation Asset Management
The investment firm's ropey disclosures were surely a warning sign.
Federation Asset Management – the investment house of ex-Macquarie fast talker Cameron Brownjohn – has been the subject of much unwanted press attention in recent weeks after a catastrophic risk management failure led to swingeing losses for the clients of both its retail funds.
For those who missed this, Federation's Alternative Investments II fund sank a positively idiotic 65 per cent of its total assets into Aussie logistics business Sendle, which is now being liquidated after a failed merger. Federation's first alternatives fund was also invested in Sendle, though not to the same kamikaze extent. Redemptions from the second fund have been gated since November.
I'd never heard of Federation until nearly 12 months ago, when someone sent me the incredibly ropey claims of investment performance featured on its website. I didn't bother writing anything about it because I doubted my readers would particularly care about such a two-bit shop. Now I wish I had.
Federation trumpets that its "team members have achieved an annualised return of 22.7 per cent on over $4 billion of realised investments since 2011, akin to trebling investors' capital every five years".
There is a great deal defective about this claim, not the least of which is that Federation was only established in 2018. For those mystified – as I was – by the impossibility of this feat, the Wayback Machine helpfully contains the answers.
