Advisory Start-Up Looks to Capitalize on Insourcing

(November 12, 2013) – Two boutique Australian investment firms have joined forces as an advisory service specializing in long-term direct investing. 

Round Tower Solutions and Scarce Capital, both small Brisbane-based shops, have together embraced the insourcing and direct investment trends that threaten to shake up Australia’s entrenched external investmentmodel.

“Asset owners are insourcing investment management and in doing so are creating a new and differentiated source of capital,” said Aongus O’Gorman, founder and managing director of Round Tower.

The partnership aims to work with superannuation funds to direct such assets into capital-starved pockets of the economy via long-term investment structures, according to O’Gorman.

It does not aim to advise on the portfolio-level—the purview of Australia’s ubiquitous investment consultants—but rather guide funds in finding and executing on one or two major tactical opportunities per year.

"Our focus is on capital scarcity, a concept that we had both being considering independently," said Scarce Capital CEO Tony Day.

The firms’ founders share a background as asset owners—both are alumni of the Queensland Investment Company (QIC). 

O’Gorman spent seven years at the fund, culminating as director of implemented solutions and in charge of QIC’s $14 billion alpha program.

Day worked with O’Gorman while serving as chief strategist of QIC. More recently, he held the top strategy position at the Future Fund, Australia’s sovereign wealth vehicle. 

“Tony and I have spent most of our careers researching and investing in opportunities where scale and a long investment horizon bring an edge,” O’Gorman said.

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