The House View
Our family established Victor Smorgon Group in 1995 following the divestment of Smorgon Consolidated Industries. Formation of Victor Smorgon Group was based on our aspiration to grow and develop diversified activity needed to build generational wealth and look after the family for years to come. Whilst this mandate has remained unchanged, we have needed to adapt, expand and professionalise as both markets and our family have evolved.
These factors have had a significant impact on both the shape of Victor Smorgon Group and our family.
We’ve achieved steady growth over the last 29 years and the change we’ve seen in markets and in cycles has added depth to our understanding. Our appreciation of the opportunity presented by different market cycles means we are investment agnostic, we pursue investments which reflect the best risk and return prospects for the time.
Our approach is based on an operator’s mindset - we invest in companies and opportunities that:
Have attractive operating margins and demonstrate pricing power
Produce free cash flow and return capital to shareholders
Occupy sectors of the economy that are due to benefit from structural trends
Are well led by experienced and aligned management teams
Can be acquired at a reasonable price.
The Group currently operates across a number of sectors, including commodities, consumer discretionary, property and global equities.
As a business, I’m proud of the significant advances we’ve made in recent times with our systems and processes across governance, management, reporting, communications & technology.
Over the last three years, our family office has entered into in a number of partnerships that we consider critical from a strategic point of view. We believe we now have a unique offering, covering funds management, corporate advisory, corporate debt, family office/business advisory, accounting, taxation and digital assets.
Victor Smorgon Group is now an ecosystem of partnerships – all of which we believe can thrive in a family office environment, creating value and opportunity for both our family and investors into the future.
I welcome you to our half-yearly “House View”. Our intent is to share key elements in our thinking that inform our decisions, whether it be for our investments, family or business operations - things we are thinking about, planning for or exploring when we develop our approach to various markets over the next 6 months.
Peter Edwards
Executive Chair
August 2024
Managing risks and seizing opportunities in FY25
Amidst high interest rates and ongoing economic uncertainty, family businesses must focus on maintaining margins, managing costs, and optimising investments. An emphasis on ESG, technology, and robust governance is crucial for resilience.
Institutional adoption of bitcoin and ethereum ETFs brings a new era for digital assets
The approval of Bitcoin spot ETFs by the US SEC has validated digital assets, attracting significant institutional investment. This shift sets the stage for broader market participation and new cryptocurrency investment opportunities.
Non-bank lenders and the generational business transfer in Australia
Non-bank lenders are helping drive the Australian economy and the transfer of wealth between generations over the next decade, as an estimated 1.4 million Australian business owners look to retire.
Strategic asset allocation in a high-inflation world
Family offices wield a unique advantage. With cash reserves and patient capital readily available, they possess the agility to respond swiftly to market shifts and seize opportunistic deals, setting them apart from traditional institutions.
New regulations to impact future M&A activities
Family offices are exploring M&A opportunities, focusing on asset sales due to economic volatility. Buyers prefer direct negotiations and underwritten agreements, while new regulations may complicate future deals.