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Humans are linear by nature and our ability to grasp exponential change is extremely poor, this creates a blind-spot when it comes to assessing the potential of technology. While the cloud opportunity is already thought of in the trillions of dollars, it may actually become three to six times this size over the coming decade.

One of the most difficult things to do as an investor is delineating promotional rhetoric from a genuine glimpse of an explosive new secular trend. Separating the so-called "signal and noise" is less clear-cut than the phrase implies. For instance, the parabolic moves (up and down) in AMC and GameStop (both were recently considered bankruptcy candidates), clearly highlight how one investor's signal can be another investor's noise, with the market as polarized on the future of the businesses as oil and water.

Interestingly, often the loudest debates about a company's future are highly bifurcated like AMC and GameStop, with the opportunity worth many multiples of what the market implies today or nothing at all (similar debates were had over Amazon and Tesla too). Hence it is quite an unusual situation when the debate is not between success and failure, but rather success and unfathomable success! Paradoxically such a situation may be available at one of the largest companies in the world, with a market cap approaching US$2 trillion, Microsoft's opportunity may actually be underestimated by the market.

Before we dig into this frightening proposition, that such a "large company" has a potentially larger opportunity than we can comprehend, let's revisit some of the perspectives from Google's world-renowned futurist and Director of Engineering, Raymond Kurzweil. Famous for advancing numerous cutting edge fields, Kurzweil posits that humans are linear by nature, whereas technology is exponential. In fact human ability to grasp exponential change is so poor that even when it is presented in the plain language of mathematics, our minds often short-circuit and struggle to resolve situations that are indisputably true. For example, Kurzweil's "law of exponential doubling" notes that it takes seven doublings to go from 0.01% to 1% and then seven more doublings to go from 1% to 100%. So within 14 moves we have gone from something that is completely invisible in the linear world (0.01%), to entirely encompassing it (100%). Perhaps the global pandemic and the exponential spread of the virus has given us a real-world look at what exponential growth "feels", like given the speed with which our lives were disrupted, however, most humans are simply not built to intuitively reconcile this phenomenon.

Shifting back to Microsoft, it is generally accepted that the biggest opportunity ahead of the company continues to be cloud computing and its powerful claim on the growth of technology more broadly, driven by its privileged position with enterprises and consumers. It has also become somewhat of a consensus view that the cloud market will be over US$1 trillion within a decade, this alone puts Microsoft in exceptional shape to deliver multiples of its stock price for shareholders over that time. So case closed right, what more is there to say? So what would it mean if the consensus view was wrong and massively underestimated the opportunity. Many will raise their eyebrows and ask "how can that be, the opportunity is already over US$1 trillion", which is actually the natural default for our linearly predisposed human minds.

Perhaps thinking exponentially, a signal of how large the cloud opportunity may be, came on a recent Microsoft earnings call, during which CEO Satya Nadella made the following comment regarding the future of global technology spending:

"At the highest of levels, today as a percentage of GDP tech spend is 5%. We think it will double in the next 10 years, and if anything, this pandemic perhaps has accelerated that doubling…[and] what is the largest, most secular need? It is the need for distributed cloud infrastructure" - Satya Nadella (CEO of Microsoft)

At first blush, this comment looks trivial, but putting some numbers around it reveals quite an interesting result. Current global IT spend is ~$3.6 trillion (of which cloud is only ~10%), were it to double as a percentage of global GDP (which is also growing) over the coming decade, it would imply global IT spending would hit $9.6 trillion from current levels (~10% CAGR ). Given Nadella noted the pandemic had "accelerated that doubling" it would imply faster growth for cloud relative to pre-pandemic levels, which was already growing more than ten times (10x) faster than the industry. Hence if Nadella is right, the market may be ~US$6 trillion by 2030 or six times (6x) the size consensus perceives it to be now. Even if Nadella is wrong and there has NOT been an acceleration, the cloud opportunity would still be ~US$3 trillion or triple (3x) the market consensus. A truly staggering thought for the potential of this explosive, exponential secular trend!

At Montaka Global we have a single clear goal: to maximize the probability of achieving multi-decade compounding of our clients' wealth alongside our own by owning the long-term winners in attractive markets, while they remain undervalued.

Montaka owns shares in Microsoft.

Amit Nath is a Senior Research Analyst with Montaka Global Investments. 

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America is running out of houses

        
Source: Zonda

What it means

House prices around the world are rising rapidly - including in the United States.

Recent gains have re-opened old GFC wounds, with escalating concern of another housing bubble.

However, the data suggests the gains are driven not so much by excessive demand, but lack of supply. The number of ready to build lots is down ~50% over the past 5 years. And while some of this can be blamed on the disruption from COVID, the trend was well established prior to 2020. The issue, it seems, is the gutting of the housing industry in 2009-2010 and the subsequent lack of skilled labour available to supply new lots and houses for the new cycle.

In short, it appears recent house price gains in the US are more structural than cyclical.

 

The Aussie consumer is coming back - big time

                  

Source: ABS, Quay Global Investors

What it means

Sometimes when looking at the detail we miss the bigger picture. How often do we hear 'retail sales beat / missed expectations', and then simply move onto the next economic data point? But looking at the total data, there is no doubt - retail sales are booming in Australia.

The chart on the left tells a few stories. It shows retail sales growth on a 'moving annual turnover' (MAT) basis - in the same way a shopping centre owner would view it. On a national scale the numbers are clearly very good (+9.6% growth), and even after stripping out e-commerce sales, physical store MAT growth is strong (+6.6%) - during a pandemic!

But what about the so-called base effect? Well, the chart on the right shows that when comparing monthly retail sales to 2019, there can be no doubt - the Aussie consumer is back.

But it's all happening online … right?

 

The pandemic did not permanently change our shopping behaviour

                  

Source: ABS, Quay Global Advisors

What it means

In the heat of the moment, it is always tempting to extrapolate the current environment into perpetuity. However, mean-reversion is a hell of a thing.

Last year the narrative "the pandemic has accelerated existing trends" was popular. In reality, we are simply returning to the pre-pandemic environment. This has two really important implications for real estate.

The physical retail property story has not changed for the worse as a result of the pandemic. In fact, coupled with recent retail sales data (see previous chart), the fundamentals for physical retail have improved.

Many businesses aggressively expanded warehouse demand to cater for booming online sales during the pandemic. We believe there is some risk that industrial owners / developers are building excess supply at a time when consumer behaviour is normalising. The nightmare scenario for industrial owners is if lockdown-weary consumers return to physical retail in greater numbers and online sales fall below the pre-pandemic trend - just in time for record new supply.
 

Retail is booming in the US too

Source: BEA, Quay Global Investors

What it means

Like Australia, US retail sales are booming compared to 2019 data. And like Australia, the spoils are being shared across e-commerce and physical retail.

What's driving this?

The common story is the consumer has a lack of spending options under COVID (limited travel, dining, etc).  As such, this boom won't last.

However, we think there is more to this story - and it points to a solid (structural) change in household balance sheets.

 

Retail is booming, yet households are saving - how is this possible?                            

              
Source: BEA, St Louis Fed, Quay Global Investors

What it means

It seems like an oxymoron. How are retail sales booming at a time of a huge surge in household savings?

To understand this is to understand that the current consumer boom is far more sustainable than it may seem.

First, households are a major beneficiary from large government deficits - which is in fact the way governments proverbially 'print money' (i.e. it's not quantitative easing). So, households can simultaneously spend and accrue savings via government transfers.

Yet even when the stimulus ends, this money does not go away. Federal deficits effectively spend money into existence. One person's spending (government) is another's income (non-government). Across the non-government sector, spent savings are simply transferred between private sector bank accounts.

So this pool of money is staying in private sector hands until it is taxed out of existence by the federal government. That won't happen in aggregate until the US runs a budget surplus. And it doesn't feel like that's coming any time soon.

Said another way, we believe the recapitalisation of household balance sheets across the world is structural, and permanent.

 

The so called 're-opening trade' is very uneven

                       

Source: Bloomberg, Quay Global Investors

What it means

Since the announcement of the successful vaccine trials late last year, many stocks and sectors have performed well, benefiting from the so called 're-opening trade'.

Of course, this makes sense. However, there appear to have been a few inconsistencies. How can hotel REITs now be back above pre-pandemic prices, yet office towers (where some of the same underlying assets are located on the same street) are still trading 10-15% below?

Even within the same sector, the largest retailer landlords (Simon Property, Scentre Group) are delivering very different performances despite similar macroeconomic stories (see earlier retail charts). Moreover, by most metrics, the local landlord (Scentre) appears to be delivering better sales, footfall and overall occupancies - but remains 20% below its pre-pandemic price.

Meanwhile, Simon is trading comfortably above. 

The lesson? The re-open trade makes sense, but pay attention to the underlying stock fundamentals - perhaps significant relative value is emerging?

 

At similar points in the cycle, rising interest rates are good for real estate and not great for equities

                   

Bloomberg, Quay Global Investors

What it means

Rising interest rates are bad for listed real estate?

This is one of our favourite myths.

When the US (and the world) was recovering from the 2001-2002 recession, rising interest rates from 2004 corresponded with listed real estate significantly outperforming equities, both in the US and globally.

Why?

During the early stages of recovery, built real estate generally has excess capacity (which we call vacancy). Rising interest rates signal a strong economy, which means the vacancy is easily filled - resulting in strong earnings growth.

We acknowledge this cycle is very different. The key is to target sectors with elevated vacancy from the pandemic (office, retail, senior housing) and be wary of sectors already running at full capacity (industrial).

 

Here comes the taper … but who cares?

      
Source: Jack Bogle, Ben Carlson, Quay Global Investors

What it means

Okay, we admit we've published this a few times before. However, given the rapid economic recovery around the world, talk of a Federal reserve 'taper' (reducing of asset purchases) is causing some concern among the usual talking heads.

All too often we hear day-to-day share market returns are influenced by central bank action: 'flooding the market with liquidity' to drive up share prices. Of course, central bank liquidity does no such thing, because central bank liquidity is non-fungible with liquidity used by consumers, businesses or investors. Central bank liquidity simply facilitates the settlement of interbank transfers for and on behalf of bank customers. How 'the market' ever convinced itself otherwise remains a mystery.

Don't believe us? Well, in the decade that the US Federal Reserve was most active with asset purchases (2010s), nearly 100% of the total return could be explained by dividend yield and earnings growth. There was no P/E rerate benefit, despite the secular fall in interest rates over the decade.

This is an important observation in the current environment. Too often the Fed and low interest rates are blamed (or credited) for market performance, when the reality is that returns come from earnings growth and dividends. No matter what the Fed does, investors would be wise to spend more time thinking about company prospects rather than central bank actions.

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When speaking to clients, our investment team is frequently asked whether the market's extraordinary run is due to come to an end. It's a question many in the market are currently grappling with, and it pays to look back into history to provide a guide.

History repeating itself

In 2009, we saw only 5 drawdowns greater than 5% over the 18 months following the market's low on 6 March 2009. Surprisingly the average drawdown was just above 4%, with each drawdown lasting on average just 7 trading days.[1]

Despite seeming counter-intuitive given apparent risks, it isn't unusual for markets to recover in this fashion after a large shock. History repeated following the recent COVID-induced drawdown, with only 2 drawdowns greater than 5% since the market bottomed on 23 March 2020, and each drawdown averaging only 3 trading days.[2]

Today we find ourselves 15 months past the pandemic bottom in markets, with the ASX300 Accumulation Index having risen in 14 months out of the 15, and up a total of 67.8%.[3] The market is 7.1% above its all-time high, and continues to climb higher.

Watching the signs

We remain positive on the market over the next 6 weeks as we head into a strong reporting season. However, a number of potential issues are accumulating as we enter the seasonally weaker period into September, with bond markets, options markets and the Chinese economy all attracting our attention.

Bond markets

The US Federal Reserve is committed to keeping its foot firmly on the accelerator until either employment numbers fall dramatically, or inflation accelerates to uncomfortable levels.

US headline inflation numbers released this week unexpectedly accelerated to 5.4% year on year in June, the biggest rise since 2008. One data point certainly does not make a trend; but three data points in a row is hard to dismiss, particularly when price pressures were so broad-based. Yet inflation is still transitory according to central bankers, and any acknowledgement otherwise is still months away.

Increasing inflation fears continue to spook investors that central banks may move sooner rather than later to lift interest rates, which saw the US 10-year bond yield rise from 0.50% in August 2020 to 1.74% in March 2021. But the yield has since retraced to 1.47% as the bond market warns of a potential economic slowdown. After experiencing a sell-off, since the middle of May investors have rotated once again into the tech sector, fuelled by the bond yield fall. Market breadth is narrowing (rarely a sign of market health), with mega-cap tech shares in the US increasingly taking leadership.

Options markets

The options market offers interesting insights, with positioning suggesting nearly everyone in the market is bullish. Implied volatility remains subdued, with the current put:call ratio extremely low - reflecting a heavy skew towards upside participation with little downside protection. 'Who cares about protection' seems to be the belief of the times. When the deck is stacked heavily towards upside participation, investors can aggressively move en masse to downside protection when markets do fall - leading to an even sharper reversal.

China

Meanwhile, the Chinese economy is at an interesting juncture. Having led the world out of the COVID-induced economic downturn, several indicators suggest risks are rising. Total social financing, which is a broad measure of credit and liquidity in the economy, has been falling after the Chinese government embarked on a process of deleveraging, allowing the economy to move forward with less stimulus support.

                           

The Chinese approach is in contrast to that of the US, which continues to provide significant monetary and fiscal stimulus. Other Chinese data has also been weak recently, including the Caixin composite PMI which fell from 53.8 in May to 50.6 in June (the lowest reading since April 2020). New orders are at a 14-month low. The People's Bank of China has recently cut the Required Reserve Ratio (RRR) by 50bp, releasing an estimated RMB 1 trillion in base money liquidity and reducing bank funding costs by RMB 13b per annum. This should assist bank liquidity; however, we do not believe it represents a change in monetary policy by the Chinese authorities, with tighter prudential regulations and a continued slowdown in credit growth likely.

Alan Greenspan famously said in 1973: "It's very rare that you can be as unqualifiedly bullish as you can now." These words were spoken just before two of the worst years for the US economy and the stock market. Could the Australian market be heading for a similar comeuppance?

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Funds operated by this manager: 

Premium Asia Fund, Premium Asia Income Fund, Premium China Fund

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Founders have changed the world and will continue as long as capitalism exists. Our system motivates bright individuals to pursue dreams and build companies that improve human lives, just as trees in a canopy compete vertically for sunlight. For us investors, we need not miss out on these game changers. We can participate in the rise of these companies alongside their founders, and if analytical judgement is cast correctly, stand to benefit immensely from their journey.

Are all founder-led companies start ups?

Investing in founder-led companies does not mean venture capital investing - there are over 2,000 listed founder-led companies globally, varying in age, size and industry. Not all founders work on new and shiny products, only a small proportion are start ups. In fact there are many blue chip founder-led companies that are not in the technology sector, and these global household giants should resonate with many of my readers: Marriott, Morningstar, Hermes, Walmart and Nike.

What are the risks of founder-led companies?

The pros of investing in founder-led companies are well documented by academics and practitioners alike - Credit Suisse and Bain have quantified a +7% outperformance since 2006. Other studies show multi-decade alpha. In business, skin in the game matters and that is why founders make great business owners and operators.

But not all founders are great. Not all founder-led companies turn out to be the next Amazon. Hence everything in moderation, and why diversification is needed to dampen the volatility of owning just one company. This is where a clear portfolio construction recipe comes in.

I have previously likened portfolios to making a cake in this publication. We select our best ingredients and apply them in the right proportions before baking in an oven at the right temperature. What generates returns is not what has happened, but what will happen. And proportions are crucial.

Instead of baking one cake with all our cake mix and hoping it turns out well, we should divide the cake mix to make many cakes. With each cake we make, risk is reduced. That is the key to a well-balanced portfolio of founder-led companies. The sum of the parts is always greater than the whole, especially when it comes to risk management.

There is an optimal way to diversify and the framework for this process is tied with the concept of vintages.

How to diversify a portfolio of founder-led companies

The least volatile founder-led companies are also usually the oldest. Think Walmart, Hermes and Nike, who have each existed for decades. The advantage of these generational companies is stability of growth and predictability of dividends. They move like ocean liners, their brands carry an inertia that spins off free cash flow consistently. You can rely on these founder-led companies to deliver slow and steady growth to your portfolio. The advantages are not without risk though. Older generational companies can become complacent. Their founders may have already reaped the rewards of their lifetime of efforts and become content with sitting back and relaxing. Their succession planning may not be smooth. The companies themselves may not be built the right way to adapt to changing environments. Ocean liners have a huge turning circle; it becomes impossible to navigate fast-changing conditions when they have only been built to travel in straight lines.

This is why portfolios should be built to capture the full spectrum of founders from different vintages. You want both ocean liners and speedboats. Younger founders are hungry and motivated. They are free of the shackles imposed by legacy constraints. In this day and age, issues caused by use of outdated technology can prove significant for incumbents - you can observe how difficult it is for banks to transform their systems. It is easier and faster to build from scratch than it is to modify, much like how building a new house is faster than renovating an old building. When the pace of change increases, newcomers have the advantage.

Take for example a company my fund is invested in. It's a Dutch company called Adyen in the global payments market. They've been built with technology from the ground up that allows them to outcompete incumbents. As a result, they have been able to win significant market share in a very short period of time and capture the accelerating change in consumer payment behaviour.

When it comes to founder-led companies, there are pros and cons to both old and young. Having all your eggs in either one or the other would be unwise. Spread your portfolio across founders from all vintages. You want to build a fleet that encompasses the ocean liners, giving stability and reliability, and mix them with speedboats who can navigate changing environments and adapt with the times. This is what can truly mitigate risk.

Skin in the game - when theory meets practice

A final question and thought for my readers: which of these investment opportunities is inherently riskier over the long-term:

1)    Multinational blue chip where the board has employed a salaried CEO on a 5-year contract; or

2)    A mid cap company where the founder retains majority ownership, is the CEO and Chair.

The multinational blue chip has existed for much longer, so its share price is more predictable, less volatile. The mid cap founder-led company has a much more volatile share price - analysts have a wide variety of opinions regarding its prospects.

But which one is riskier over the long-term? Which company would you rather invest in?

The answer depends on your understanding of the difference between risk and volatility. One investment is more volatile, but is actually less risky over the long-term.

Happy compounding. 

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About the author

Lawrence Lam is the Managing Director & Founder of Lumenary Investment Management, a firm that invests in the best founder-led companies in the world. We scour the world looking for unique, overlooked companies in markets and industries on the edge of greatness. We are a different type of global fund.

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Disclaimer: The material in this article is general information only and does not consider any individual's investment objectives. All stocks mentioned have been used for illustrative purposes only and do not represent any buy or sell recommendations. Ownership of this publication belongs to Lumenary Investment Management. Use of this material is permitted on the condition Lumenary is acknowledged as the author.

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Click here for Part I of this series

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In this second part we will consider the current standing of the larger EM countries and then review long term performance of the various indices and, and in the process demonstrate that active management is very effective in less efficient markets.

Let's turn now to the state of the larger EM countries. It is surprising to many just how big the largest emerging markets are already.  China and India together are already bigger than the US or Europe.  

The main emerging market powerhouses are China and India.

• Together, these two countries are home to over 35% of the world's labour force and population.
• In 2018, their combined gross domestic product (about US$28.1 trillion) was greater than that of either [1]:
  • the European Union ($18.8 trillion) or the
  • United States ($20.5 trillion).

In any discussion of emerging markets, the powerful influence of these two super-giants must be kept in mind.

Whilst countries like India and China are still in the EM index, it is worth looking at the next table which compares them to the framework introduced earlier and considers just how emerging they still are.  Putting aside the geopolitical and trade factors which can cloud the conversation it is, we believe, reasonable to view a few of the EM countries as no longer emerging, or at least getting close to that stage of their journey as a nation.

If we take a historical and visual look at Emerging markets and Asia ex-Japan we can see  in the image below how Asia ex-Japan used to be a niche subset of Emerging markets, compared to Developing markets (DM)

That, in our view, is no longer the case.  Almost unnoticed, Asia ex-Japan has become the dominant (80%) part of EM.

Where we are starting from today - and are heading very quickly - is shown in the following images where we recategorise Developed markets as The Western economies (including Japan) and separate Asia ex-Japan and the Frontier markets/commodity countries.

This contention carries compelling investment implications.    The underpinning of these changes in large part is a theme that will have at least a full decade of strong growth as the poor of Asia climb into middle class.   

Strategic allocations and portfolio construction need to catch up and to rethink the use of emerging market funds.  As a minimum we suggest that advisers take 80% of EM into an Asia ex-Japan specialist and add to that a Global resource/commodity specialist. 

The obvious question following our contention is; "what do the numbers say?"  The chart below, whilst busy, tells a compelling story.  Note: Saudi Arabia is not included as it does not have a long enough history but over five years its story is consistent with our contention.

Some key observation to assist in understanding the implications of this chart:

• At the bottom is MSCI Brazil.
• The second from bottom is MSCI Emerging Market index excluding Asia.  This index provides long term support for a contention from Part One that the non-Asia components of EM indices are performance detractors.
• Moving up you can see a quite well-correlated South Africa and Russia.
• Next there is the MSCI full EM index.
• Above that - as would be expected given the underperforming countries - is the Asia ex-Japan Index.
• The top line shows the value of a specialist active manager in a less efficient market.

In summary, investing in an Emerging Markets Fund is primarily an investment in Asia ex-Japan, and the remaining approximately 20% has detracted from long term performance by comparison.  We therefore contend that it is a better outcome for clients to use a specialist Asia ex-Japan that has a strong China capability and if the commodity exposure from EM funds is desired we argue a specialist in either Global Resources and/or Commodities is more effective.

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[1] Source: Emerging Market Countries and their 5 Defining Characteristics; Kimberley Adao www.thebalance.com; Aug 2020

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Often cited as the densest year of technological innovation of all time, 1995 stands out for several reasons; The launch of the world's first internet enabled marketplaces (Craigslist and eBay), the start of online dating (Match.com), the first fully digital, animated feature film (Pixar's Toy Story) and of course, a humble "bookseller" was born (Amazon.com). While lesser known, 1995 was also the year the greatest internet startup in antipodean history was founded, REA Group.

Just like the great tech tales of Silicon Valley, our Aussie protagonist (REA Group) was started in a garage (1995), IPO'd just before the dotcom bust (1999) and lost ~90% of its value shortly thereafter (2001).

However just before complete failure, it was dealt a dose of good fortune, with Rupert Murdoch and his global media empire, News Corporation stepping in and providing a much-needed capital injection. News Corp. took 44% of REA Group (realestate.com.au at the time) in exchange for A$2 million in cash plus A$8 million worth TV and print advertising, giving REA Group a total equity valuation of A$23 million.

Fast forward twenty years to today and News Corp. owns 61% of REA Group which has a market capitalization of A$21 billion, or 910 times the valuation Murdoch paid in 2001. For comparison, a purchase of Amazon stock at its low point after the dotcom bust would have returned 510 times the initial investment today, or less than two-thirds what REA Group delivered (excluding dividends), which earns it a place among the greatest internet start-ups of all time.

Aside from being a multi-decade compounder for shareholders REA Group holds one of the most privileged positions in real-estate of any company in the world. Real-estate markets tend to be highly localized, with the comparable property radius only extending to surrounding neighborhoods, creating fragmented, non-uniform supply dynamics, which are highly supportive for an online marketplace like REA Group which can aggregate that supply more uniformly.

In addition to this, the Australian market is unique, in that it is impossible to function as a real-estate agent (or broker) without a subscription to REA Group's professional tools and access to its property listing portal, which as we will discuss, is entrenched with buyers and renters in the Australian market.

Through its flagship portal (realestate.com.au) REA Group has become "the destination" for real estate in the Australian market with ~65% of Australia's adult population (12 million people) checking property listings, real estate news, and home prices on the site every month.

Additionally, REA Group continues to increase its lead over the number two player (Domain Holdings), reaching 6 million more Australians and attracting over three times the monthly visitators of its peer, a gap which continues to widen.

REA Group is Australia's #1 Property Portal

            

Source: REA Group

Adjacent to its privileged position with Australian real-estate customers, REA Group also has an indispensable relationship with real-estate agents. To effectively operate in the Australia market a real-estate agent has very few choices outside of subscribing to REA Group's agent administration tools to find clients, build an online profile and market their listings, this has translated into extremely strong and durable pricing power for REA Group.

While the official strategy is to support agents and remain in their servitude forevermore, one cannot help but observe the increasingly potent value-added services it offers property buyers, sellers and renters, slowly disintermediating agents in the value chain, which is the natural progression of a genuine two-sided marketplace like the one REA Group oversees.

As REA Group continues to reduce friction costs of buying, selling, and renting properties for customers, it is likely to capture a larger share of transaction economics over time.

In Part-II of this series will discuss some of the powerful levers REA Group has at its disposal to increase its share of Australian real-estate industry economics and the numerous other valuable real options it holds within its portfolio. We are very grateful for the trust you have placed in Montaka Global to protect and grow your wealth, alongside our own wealth, and believe REA Group will continue to be a wonderful investment over the long-term.