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Hostplus plans $400m venture capital investments
Hostplus plans to invest $400 million into venture capital in the next five years, accelerating a surge of superannuation money into the sector.
Telstra CEO Andy Penn wants more super investment in start-ups
Telstra chief executive Andy Penn said there needed to be "structural changes" to superannuation to allow for more of Australia's $2 trillion in savings to be invested in start-up companies.
Trend of investing in members’ industries continues with Media Super
Media Super has invested $60 million into local film and television production, doubling its previous allocation of $30 million.
This move continues a growing trend among super funds to seek to invest in industries aligned with their membership: NGS Super has been exploring funding preschools; Cbus has been looking into affordable housing; and HESTA has been assessing the viability of health and aged care.
ASIAN FAMILIES TURN CONSERVATIVE WITH FIXED INCOME
Asia’s wealthiest families are turning conservative in their investing approach, in contrast to their peers around the world who have been allocating more aggressively and accepting more risk in return for growth.
That didn’t hurt returns comparatively last year, with Asia’s family offices posting an average 6.3 percent investment return in dollar terms, second only to Europe’s 6.4 percent return. Singapore’s offices outperformed the regional averages, with returns of 6.9 percent, the survey found. In 2013, Asia’s family offices saw returns of 7.6 percent, compared with Europe’s 9.8 percent.
However, Asia’s family offices tend to manage smaller pools of cash, with an average of $431 million in assets, compared with an average of $806 million globally, the survey found.
Going forward, Asia’s shift toward safety, particularly a higher allocation toward fixed income, might bite. Globally, family offices put an average of 14 percent of their portfolios into bonds in 2014, compared with 16 percent for Asian offices and just 11 percent for North American offices. For 2015, around 19 percent of Asia’s family offices said they plan to pursue a “preservation” strategy and 54 percent plan a “balanced” strategy, up from 2014’s 17 percent and 50 percent respectively.1
1. Leslie Shaffer. CNBC.Here’s Where Asia’s Rich are Putting Their Money. October 15, 2015. http://www.cnbc.com/2015/10/15/asia-family-offices-pick-fixed-income-as-economies-slow-fed-rate-rise-looms.html
Fintech investment in Asia-Pacific quadruples in 2015
Finextra, 4th November 2015
Investments in non-bank fintech companies across Asia-Pacific has quadrupled over the past year – from about $880 million in all of 2014 to nearly $3.5 billion in just the first nine months of 2015, according to a new report by Accenture.
Franchisor revenue to reach $192.6bn by 2021
Franchise Business, 4th November 2015
In the five years through to 2020-21 growth in the franchising sector will be a steady 2.3 percent, reflecting franchisor revenue of $192.6 bn. That's according to the latest IbisWorld industry report.
The pace and structure of lending stifles Australia
Cuffelinks, by Ashley Owen on November 12, 2015
Lending patterns can often provide valuable insights into likely future trends. Two key indicators are the pace and type of lending. The first chart shows lending to businesses (blue) and to households (red) in Australia since 1980, in real terms after CPI inflation.
Forget Retirement. Baby Boomers Are Looking to Franchising to Stay Active
According to a 2014 Merril Lynch Retirement Study many U.S. baby boomers wont be heading into traditional retirements but instead will remain working as franchisees.
This is also likely to be trend in Australia.
But many of them will not be retired in the traditional sense. They’ll be working, according to a 2014 Merrill Lynch Retirement Study that spotlights the “new retirement workscape.” The report concludes that “in the near future, it will become increasingly unusual for retirees not to work.” Driving forces cited in the study include increasing life expectancy, elimination of pensions, economic uncertainy and re-visioning of later life towards purpose and social engagement.
Related: This 100-Year-Old Woman Works 11-Hour Days and Says She Wouldn't Have It Any Other Way
Couple this with the stark reality that 22 percent of boomers have less than $100,000 of retirement savings -- and half of those have less than $50,000. It’s no wonder that 62 percent of younger boomers (ages 51 to 65) expect employment to be a source of income in their retirement years.
Boomers are responding to the challenge by starting their own businesses in record numbers. According to the Kauffman Index of Entrepreneurial Activity, 23.4 percent of new entrepreneurs in 2013 were aged 55 to 64. Why the interest in entrepreneurship? When older workers are downsized, it can take nearly twice as long for them to find new jobs, so it makes sense to many boomers to start their own companies. Other boomers choose entrepreneurship as an encore career in order to pursue a passion, work on their own terms and continue to create wealth for themselves and their families.
Bohnne Jones of Nashville, Tennessee, fits both categories. After 31 years in health care, she was downsized five times between 2002 and 2007 -- until she turned to something completely different. “I was looking to own my own business and work pursuing my passion for design, fabrics and color.” Jones found her answer in the Decorating Den Interiors franchise that she has owned in Nashville for the last eight years.
She’s not alone. Many baby boomers have embraced franchising as the chance to start a business without having to build it from scratch. The U.S. Small Business Administration notes, “Franchising can be a great alternative if you want to have some guidance in the startup phase of the business.” Jones agrees. “For me, it was an ideal situation. I chose to move into an industry that was not at all where my experience lay. I interviewed existing franchise owners, as well as people who had left Decorating Den. They all said the same thing: Follow the system and you will do well.”
Related: 20 Franchises You Can Launch for Less Than $50,000
The advantages of buying a franchise include built-in name recognition, proven business models and operational procedures and a wealth of support from the franchisor in locating, supplying and marketing the business. Jones used her own retirement assets to buy her franchise just before the onset of the Great Recession, and the educational materials and low-cost marketing ideas provided by Decorating Den helped her weather the storm. She also values the community that franchising creates. “You can get support from other owners who have experienced the same things you have, and you can get some great advice," she says.
Although all franchises require an initial investment, those worried about lack of sufficient savings can still find franchises that don’t necessarily require large upfront payments or high net worth. Low-cost franchise options include commercial and residential cleaning services, printing and promotional products, tax preparation and a variety of services for children or seniors.
Small Business Administration loans may also offer a source of financing. And buying an existing franchise from a current owner, as opposed to building a new franchise location from the ground up, can give an entrepreneur more certainty when making a business investment. As with any undertaking, do your research and consult a trusted financial advisor to see if franchising makes sense for you.
Franchising can help baby boomers match their interests, their entrepreneurial spirit and their specific financial situation to a business they can build on -- with help and guidance from the franchisor, franchise associations and their fellow franchisees. Says Bohnne Jones, “I’ve had eight years of employment without the worry of yet another round of downsizing. My business is strong, and I feel that I could, in a few years, step back and allow the business to take care of me. Then I can downsize myself!”.
Small Business Lending in the US & UK
Karen Mills, former Administrator of the Small Business Administration and current Senior Fellow at Harvard University, co-authored a study on credit markets and SMEs back in 2014. She recently presented at LendIt Europe on the state of Marketplace / Peer to peer lending.
Karen Mills London 2015In the US, small firms create 2/3 of the net jobs. In the UK, 65% of net job creation comes from small business. These small companies were the hardest hit during the financial crisis. Ironically they were also part of the collateral fallout when banks had to tighten their balance sheets pulling credit from SMEs thus exacerbating the financial duress further.
In the US policy makers were quick to react but new rules made small banks struggle even more. A period of consolidation began – one that continues today- as costly compliance make it difficult to operate. Of course these same small banks used to provide about 40% of SME loans. In the UK things are a bit different as the country is dominated by 5 large banks and policy makers have embraced peer to peer lending.
The market supply / demand imbalance increased opportunity for Fintech entrepreneurs to step in and fill the capital void. P2P / Marketplace lending platforms have quickly become a much needed alternative to old banks.
Mills’ presentation ends with questions regarding regulation and the appropriate amount to safeguard borrowers and lenders while allowing the new industry to grow.
'Reject the accounts': Harvey Norman under fire on $943m franchisee loans
Financial Review, 1 Nov 2016
Retail giant Harvey Norman is facing a shareholder revolt over $943 million in loans to franchisees, with a proxy adviser recommending fund managers vote against accepting the group's financial accounts at its November 14 annual meeting.
Kohler uncovers: Dominos
$400,000 franchise investment now worth $1 billion
The Sydney Morning Herald, 12 Nov 2015
A $400,000 investment nearly 30 years ago by food franchise entrepreneur Jack Cowin in a Brisbane pizza business is now worth more than $1 billion according to a media report.
Technology drives Domino’s better-than-expected results
Franchise Business, 5 Nov 2015
Domino’s has posted strong first quarter results for its financial year 2016 and predicts 25 percent growth on 2015 by the end of the financial year.
The GPS Driver Tracker for instance allows customers to track their order from the store to the door. Customer ordering through smart watches (both Apple and Android) has already been unveiled, and next month simplified SMS ordering will allow customers to place an order by texting the word ‘pizza’ or a pizza emoji to Domino’s.
“We have been extremely busy working on and delivering key digital projects to market,” said Meij. “Some are significant pieces of technology set to revolutionise the QSR space, others are focused on creating operational efficiencies in the business, but all of them have the end goal to improve the customer’s ordering experience.
“Just some of these innovations include rolling out high-tech, energy efficient, smart ovens to reduce waiting times, 15 and 20 minute service guarantees, faster save payment preferences, iPad multi-tasking technology, further enhancements to GPS Driver Tracker and Pizza Mogul, as well as continual advancements and improvements to our customer ordering apps.”
Australia, New Zealand and Europe had standout results, with same store sales boosted 13.9 percent in ANZ; Europe brought in an extra 7.7 percent on same store sales.
The brand’s Japanese presence has been boosted with reinvigoration of the stores’ image and design.
Domino’s Pizza Enterprises has a network of 1544 stores across Australia, New Zealand, the Netherlands, Belgium, France and Japan.
Read more at http://franchisebusiness.com.au/news/technology-drives-domino-s-better-expected-results#4YvWoguyEg4mrK4s.99
Domino's Pizza gobbles French pizza chain
The Australian Financial Review, 14 Oct 2015, Sue Mitchell
Domino's Pizza Enterprises is scouting for further acquisitions overseas after cementing its leading share of the French pizza market with the surprise acquisition of rival chain Pizza Sprint for €35 million ($55 million).
"We haven't [flagged] what they'll be but we are active and we'd like to succeed," Mr Meij told Fairfax Media. "There are bigger opportunities out there but they're not real yet."
Mr Meij has been under pressure from overseas investors to deploy the group's strong balance sheet after successfully restructuring the European operations in the past few years and turning around the Japanese business acquired from US private equity firm Bain Capital in 2013.
Domino's paid $235 million for 75 per cent of Domino's Pizza Japan and is expected to eventually buy out Bain Capital's remaining 25 per cent stake.
"Japan is a no-brainer but it's a put and call – it can be put to us next August and we can call it in five years from the transaction (i.e. 2018)," Mr Meij said.
Mr Meij has also been looking at other Domino's franchises overseas and there has been speculation he could make an acquisition outside the pizza space to increase Domino's 8 per cent share of the total $14 billion fast-food market in Australia.
However, Mr Meij dismissed market rumours the company was interested in buying Domino's South Korea, saying there had been no talks with the South Korean franchisee.
Mr Meij described the acquisition of Pizza Sprint from founder Franck Guegan and Food Court Finance SRL as a "'win, win, win", saying France was one of the top three pizza markets in the world after the United States and Italy, and Domino's was already the market leader with 254 stores.
"It brings forward our growth plans by three to four years," he said.
Pizza Sprint stores will be rebranded to Domino's during the next 18 months, boosting the number of Domino's stores by a net 80 to 330 (nine stores will be closed).
The acquisition will boost Domino's earnings per share about 4 per cent on a pro-forma basis, but the impact on earnings in 2016 will be negligible because the deal is not expected to be completed until January. Pizza Sprint had network sales of about €30.4 million in 2015 and earnings before interest, tax, depreciation and amortisation of about €3.5 million.
Domino's shares jumped 5.4 per cent or $2.18 to $41.95 – taking gains this year to 66 per cent – and are now just short of their August all-time high of $42.30.
"It's different to what they've done before but it seems to make a lot of sense – it's a very attractive acquisition," said Platypus Asset Management retail analyst Jelena Stevanovic.
"It speeds up their store growth programs and opens up regions and smaller towns they hadn't previously looked at ... but it doesn't prevent them making further acquisitions," she said.
Baillieu Holst analyst Josh Kannourakis said the acquisition would not have a material impact on earnings but was a "solid strategic move" to gain market share in the key French market.
The Pizza Sprint deal means Domino's will open 260 to 280 stores this year, up from its previous guidance of 180 to 200 stores.
By 2025, Domino's expects to more than double its global store footprint – from 1506 to 3250–- not including future acquisitions.
The acquisition, which will be funded through existing and new debt facilities, will increase Domino's exposure in western France, boost its advertising budget and enable the company to increase the productivity of its existing commissary in Vertou and a new commissary near Paris.
Domino's sees scope to lift sales at Pizza Sprint stores about 30 per cent within 12 to 24 months by improving the product range and giving franchisees access to Domino's digital platform, including the Pulse global point-of-sale system, online ordering and apps.
"They'll be getting one of the most sophisticated QSR [quick-service restaurant] digital platforms in the world," Mr Meij said.