OXANDA EDUCATION to leading a highly respected and innovative childcare group - MD Adrian Fonseca on his transition from investment banking
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
E2 2021 TheABE.com.au
OXANDA
EDUCATION
MD Adrian Fonseca on his transition from investment banking
to leading a highly respected and innovative childcare group
Plus: Randstad RiseSmart • Bill Identity (ASX:BID) • Willis Temby Insurance • ErgoLogic
The Australian Business Executive (The ABE) is a
business media platform providing an in-depth view of
the economic issues taking place across the country.
Featuring company exclusives and contributing
columns from recognisable industry leaders, we
promote business and examine the news beyond
the headlines.
Distributed to 30,000+ subscribers per edition,
The ABE is the place to promote your organisation
in front of an engaged national audience.
Our trusted masthead allows us to reach busy, time
poor individuals by distributing our content through
multiple channels including our:
• print publication
• digital publication
• email newsletter
• website E1 2
019
Th eA Prese
nted
BE .c om by:
.a u
NOV
HEA ITA www.
Romu
lusBu
• executive podcast series (ASX LT HC
siness
Servi
ces.c
How TA
:NH A
L) RE
om
assess LI Health
childho ment and is leading
od at tr the
tentio eatment of
n diffi
SPEC culties
IAL R
BUS EPOR
T:
T U R I N ES S
Find out more about our audience AND NAROU
SOL RECOVND
When U T I O ERY
and reach by visiting recove the differe NS
gettinry
g
and nc e betw
the rig insolvency een
ht ad is
vice
theabe.com.au/media_kit D ES
We vi
si
TINA
T I ON
Chicag t Dallas,
o, an New
d San Orle USA
Franci ans,
sco
G.J. G
ARD
HOM NER
Rated
as
ES
MD D Australia’s
arren N
Wallis o. 1 most
tr
has ta explains h usted nati
ken th ow on
e bus their uniq al home b
iness u u
intern e franchis ilding bra
ation ing m n
al odel d,
Q2 2017 www.TheABE.tv
BISALLOY STEEL
Re-engaging Australia and
Asian expansion
RMS SOFTWARE
Taking SaaS to the cloud
and to the world
SNC-LAVALIN
Cooperation and collaboration
to achieve growth
NORCO
CO-OPERATIVE
How increased revenues are
benefitting farmers and consumers
CITY OF ALBANY
Delivering economic
development through
tourism and infrastructure
TRILITY
MD Francois Gouws on the responsibility of supplying
clean and reliable water for the nation
Presented by:
www.RomulusBusinessServices.com
E1 2019 TheABE.com.au
NOVITA
HEALTHCARE
(ASX:NHL)
How TALI Health is leading the
assessment and treatment of
childhood attention difficulties
SPECIAL REPORT:
BUSINESS
TURNAROUND
AND RECOVERY
SOLUTIONS
When the difference between
recovery and insolvency is
getting the right advice
DESTINATION USA
We visit Dallas, New Orleans,
Chicago, and San Francisco
G.J. GARDNER
HOMES
Rated as Australia’s No. 1 most trusted national home building brand,
MD Darren Wallis explains how their unique franchising model
has taken the business international
Big plans for big opportunities!
Iconic new gateway between
Subiaco and Perth CBD, WA.
Artist impressions of Subi East for illustrative purposes only.
Subi East Draft Master Plan
RAILWAY PARADE
The draft Master Plan
has now been released SUBIACO ROAD
for Subi East – the most
HAMILTON STREET
COGHLAN ROAD
HA
YD
N
BU
MUELLER
significant urban infill
TO
N
N PARK
Perth
DR
IV
E
development of its kind
AD
RO
ROBERTS ROAD
AS
OM
TH
in Western Australia.
Once the home of WA football and HAY STREET
Perth’s first children’s hospital, the
Subi East redevelopment is set to Subi East at a glance The shape of things to come
transform these historic grounds > Revitalising the area between This transformational
into an iconic inner-city village that Subiaco Oval and the former $227 million priority State
recognises, celebrates and respects Princess Margaret Hospital site project will take shape over
the rich heritage of the area. > A mixed-use development with the coming 20 years, with civil
over 35ha of project area works to begin in early 2021.
> On the doorstep of Perth CBD and
Subi East will lead the way
Find a more detailed look minutes from Kings Park
for multi-generational,
in the draft Master Plan at > Train and bus services, pedestrian
inner-city living to suit
developmentwa.com.au/subieast and cycle paths direct to the city
Perth’s growing population.
or contact Manager Metro North > Almost 9ha of playing fields and
Anna Ladyman on (08) 9482 7499 public open space
to discuss future opportunities. > 2,000+ new dwellings for 4,000+
new residents
career mobility
solutions
Are you a senior executive who would value
strategic, contemporary support and
guidance as you transition to the next stage
of your career?
Our accredited, highly experienced team of
experts will help you to:
understand the future of work – connect with executive peers
to discuss thought leadership; access executive networks and
professional associations;
future-proof your career – augment your personal brand,
access executive advisory services; receive onboarding
support for your new beginning;
future proof you – strengthen mental health; develop financial
and physical wellbeing; foster positive and productive
relationships.
borderless | future focused | holistic
I can not say enough how important and impactful you all have been over the past
7 months. The circumstances that led to me finding Randstad RiseSmart was an
unforeseeable life event - nevertheless even more impactful was meeting and
working with you all. Because of my time spent with you all I can say that at this
point with over 15 years into my career I feel like I now know my authentic self and
can say that I feel more fulfilled than I ever have in my career. Thank you - I am
honored to have had the opportunity to work with you all and look forward to
joining the alumni group; and will forever be appreciative of the support.
executive participant
executive solutions | career development | pre-change | redeployment | outplacement | late-career solutions
contact executivesolutions@randstadrisesmart.com
to access our executive transition microsite
1300 72 43 43 | randstadrisesmart.com.au
DiSCOVER DiGiTAL SOLUTiONS TO POWER CUSTOMER ENGAGEMENT Scala partners with the world’s leading brands to transform the consumer experience through digital marketing technology. By offering deep insights into consumer behaviours, patterns and preferences, every digital sign can be a sensor, driving marketing and retail strategy. Scala is a proud member of the #STRATACACHEfamily. Learn more today: www.scala.com/au
Contents
9 Publisher’s Note 36 [Company] ErgoLogic
Director Robert De Nardis on the future of
10 [Economics] Prepare for a the workplace
post-pandemic spending boom
& bust 40 [Company] Randstad RiseSmart
David Rosenberg, Founder and Chief Managing Director of APAC Alison
Economist, Rosenberg Research & Hernandez on the new war for talent
Associates
43 [Company] Protector
13 [Finance] Technology IPOs Building Systems
adding high-growth companies Managing Director Robert Glasgow on
building acoustic sheds for the country’s
to the ASX
largest organisations
Max Cunningham, Executive General
Manager, Listings, Issuer Services and 47 [Company] Envirosuite (ASX:EVS)
Investment Products, CEO Jason Cooper on the value of
Australian Securities Exchange (ASX) environmental intelligence
15 [COVER] Oxanda Education 50 [Geopolitics] How Covid is creating
Managing Director Adrian Fonseca on the perfect distraction for new Cold
igniting the spirit of learning
War adventurism
25 [Legal] Love’s labour’s lost: Noel Hadjimichael, Public Policy Consultant
The part ASIC plays in 52 [Economy] Crippling debt, not
investor despair Covid, will be the legacy of 2020
Stewart Levitt, Senior Partner, Cian Hussey, Research Fellow,
Levitt Robinson Solicitors Institute of Public Affairs (IPA)
29 [Company] Bill Identity (ASX:BID)
Managing Director Guy Maine on playing a
role in the global automation of utility bills
32 [Company] Willis Temby
Insurance Brokers
Executive Director Brett Piggott on
protecting the consumer
8 The Australian Business Executive - www.TheABE.com.au
Publisher’s
The Australian Business Executive
A division of Romulus Rising Pty Ltd
ABN: 77 601 723 111
w: www.TheABE.com.au Note
t: (02) 8091 1410
e: jlandry@theabe.com.au Published quarterly, The Australian Business Executive
(The ABE) provides an in-depth view of business and economic
Publisher development issues taking place across the country. Featuring
Jesse Landry interviews with top executives, government policy makers and
prominent industry bodies The ABE examines the news beyond the
Writers
headlines to uncover the drivers of local, state, and national affairs.
Nicholas Paul Griffin
All copy appearing in The Australian Business Executive is
Editorial Contributors copyrighted. Reproduction in whole or part is not permitted without
Gladie Hernandez written permission. Any financial advice published in The Australian
Renante Auman Business Executive or on www.TheABE.com.au has been prepared
without taking in to account the objectives, financial situation or
Design & layout
Rebecca Hamerton needs of any reader.
Bien Swinton Jr. Neither The Australian Business Executive nor the publisher
nor any of its employees hold any responsibility for any losses and
Web & Digital
or injury incurred (if any) by acting on information provided in this
Mark Holanda
magazine. All opinions expressed are held solely by the contributors
and are not endorsed by The Australian Business Executive or
www.TheABE.com.au.
E2 2021 TheABE.com.au
All reasonable care is taken to ensure truth and accuracy,
but neither the editor nor the publisher can be held responsible
for errors or omissions in articles, advertising, photographs or
illustrations. Unsolicited manuscripts are welcome but cannot be
returned without a stamped, self-addressed envelope. The publisher
is not responsible for material submitted for consideration.
The ABE is published by Romulus Rising Pty Ltd, ABN: 77 601 723 111.
OXANDA
EDUCATION .
MD Adrian Fonseca on his transition from investment banking
to leading a highly respected and innovative childcare group
Plus: Randstad RiseSmart • Bill Identity (ASX:BID) • Willis Temby Insurance • ErgoLogic
The Australian Business Executive - www.TheABE.com.au 9
Prepare for a
post-pandemic spending
boom & bust David Rosenberg
I
f you ask anyone in the market why they are bullish of pent-up demand get released. You speak to most
for 2021, they will tell you right away that they see people, and the first thing they want to hear upon
a light at the end of the Covid tunnel. And indeed, getting the jab are the words “please fasten your
with the multiple vaccine news we have received since seatbelts”. Travelling, mall browsing, bar hopping,
the beginning of November, there is a light. There
eating out, dare I say, socialising, will be all the rage. It
may be many potholes, with the coronavirus cases,
is called “pent-up demand” for a reason. And this will
hospitalisations and fatalities on a disturbing upward
trajectory, and a very tough winter staring us in the be the single dominating force driving the economy
face, but there is a light that we can now all see. To in 2021, barring any unforeseen setbacks (as in, not
have vaccines developed and now distributed in such enough of a vaccine take-up to achieve the Holy Grail
volumes and with such tremendous efficacy levels, of herd immunity. No central bank will dare tighten
and done so quickly, does indeed make one tempted monetary policy even if inflation rears its (pretty?)
to believe in miracles we thought were only saved for head, the fiscal spigots will remain turned on in a
the bible stories. major way. Interest rates, by hook or by crook, will
So what lies ahead for the coming year. A very not be allowed to rise as they have typically done
rough first quarter for the economy. And then a better in past aggressive economic recoveries. If you are a
second quarter. And quite likely boom-like conditions policymaker today, the last thing you will be doing is
in the second half of the year as substantial amounts upsetting any apple carts.
10 The Australian Business Executive - www.TheABE.com.auPrepare for a post-pandemic spending boom & bust
So the economic outlook for 2021 is perhaps and distancing, and fear of a return of the pandemic
the easiest one to make that I can recall in my 35 are going to fundamentally alter lifestyles, and will
years in the forecasting business. There will be a post- have a profound influence not just on the way we
pandemic spending boom. It’s only a matter of how live but how we conduct ourselves in our personal
big and what quarter it begins. That light, indeed, and commercial lives. For example, working from
does shine bright. Much of this good news, as an home is certainly going to be a more dominant force
aside, is priced into every global financial asset you even once we move beyond the light at the end of
can probably name. Even the previously beaten-up the tunnel, with obvious negative implications for
airline, casino, retail and hotel stock you can think of commercial real estate but positive implications for
has priced in the light at the end of the tunnel. internet infrastructure, computer hardware and video
conferencing. There is going to be a sharp reduction in
But, you see, from a financial markets standpoint,
travel to work, travel in general, and this means fewer
just as the economy booms next spring and summer,
cars on the road, there is nothing here that is very
even into the fall, investors will at some point in 2021
good for the auto sector, and the future therefore is
have to confront what life is going to be like once we
really clouded for office REITS and commercial real
get past the light. At some point next year, I guarantee
estate in the large densely populated urban areas. But
everyone that just as the markets were soaring during
there are some bullish themes that emerge too. As
the darkest of hours during the pandemic in 2020
we go into an era of elevated personal savings rates
because of the light they saw at the end of the tunnel,
where people are going to focus on what they need,
these same markets will be beyond that light even
not what they want. This means to screen all of your
as we all go out and have fun again. That’s the thing
equity exposure for “utility-like” characteristics – and
about markets – they move earlier and more quickly
that includes anything related to ecommerce, cloud
than people do.
services, delivery services and wiring up your home to
All that said, I do think from an economic become your new office. What lies beyond the light at
standpoint, there will be an economic recovery of epic the tunnel is a secular shift in economic behavior that
proportions. But the recovery beyond the end of 2021 took place during this grim period of history; shifts I
will be muted and frustratingly slow, and it could take believe are secular in nature, that tell me to focus on
at least three years before all the economic damage areas of the market, consumer staples, health care and
from the virus and the lockdowns are ultimately even big tech, that have morphed into essentials.
recouped. Then think of a future with massive public
No doubt, the investment community is paying
deficits, debts, and government intervention and
more for duration today than they ever have in history
regulation. Then we have to consider, when we get to
but since we can anticipate rates to stay low for years
the other side, how these massive central bank balance
to come, this valuation driver becomes the dominant
sheets will get dealt with. Will the debts get monetised
issue that will be driving the market and prospective
or not? And a world of reduced globalisation and
returns. This is exactly why growth investing trounced
more localised supply chains, an end to-just-in-time
value for much of the past decade, even before
inventories, and what the future holds for taxation. I
the pandemic. Ultimately, the growth-versus-value
don’t know about you folks, but it is crystal clear to
decision depends on what the world will look like
me that in this period of heightened uncertainty, it will
once Covid-19 is in the rear-view mirror. But even
be capital, and not labor, that defrays the cost of the
with a vaccine, if we return to the pre-Covid world,
rescue packages, and that means higher tax rates on
when you think about it, it actually means a return
capital gains and corporate income. The current surge
to a slow-growth, low-interest-rate, and low-inflation
in the deficit is not about shovels in the ground with
world, which means growth will remain the place to
some hope of future multiplier effects on the economy
be because they are the longest duration stocks in the
– it is simply a transfer from some future taxpayer to
equity market. For cyclicals and value stocks to work,
today’s household and business who are out of work
you want faster economic growth, signs of inflation,
and for some reason had no cash, savings, or liquidity
and higher interest rates. There’s been a move recently
to get through even a few months of shutdown for
into the value trade and it does make sense since
public health purposes. these stocks are dirt cheap and deserve to be rerated
What the world looks like when the crisis positively for a post-pandemic world. But at the root,
ends is truly anyone’s guess but I will say with 100% this is really just a mean reversion trade, and it may
clarity that it is going to look a lot different than it have more legs to it. But that is why it is referred to as
did before. Not just the question over government the ‘value trade’ and not the ‘value trend’; for the same
policy, but at the individual level, months of isolation reasons value unperformed growth 80% of the time
The Australian Business Executive - www.TheABE.com.au 11Prepare for a post-pandemic spending boom & bust
and by more than 3 percentage points per year during of pent-up demand release, that we will be stuck with
the 2009-2019 bull market expansion. a permanently higher equilibrium personal savings
The major point I need to emphasise right out rate and a permanently lower labor force participation
of the gates is that it can’t possibly be lost on anyone rate. And if we do somehow revert to the old normal,
that what we had was a health crisis that morphed into remember that the prior ten-year period was one of
an economic crisis and then somehow managed to low growth, low inflation and low interest rates. I don’t
morph into a financial crisis that was ten times worse see that changing because the secular forces of aging
than anything we saw in the Great Financial Crisis. We demographics, massive debt burdens and extreme
simply refuse to stop these cycles of redressing debt income and wealth inequalities, if anything, have
crises by adding more debt, which merely compounds
become accentuated by the pandemic.
the adverse effects from the recession that is inevitable,
and yet at the peak of the cycle nobody ever seems to What the world looks like when the crisis ends
be prepared for one. is truly anyone’s guess, but I will say with 100% clarity
that it is going to look a lot different than it did before.
The vaccination process is no reason to believe
I sense that some of the structural changes in our
we are not in some form of economic depression that
has only been disguised by unprecedented policy economy could be long-lasting. Global supply chains
stimulus. Just because your kid has training wheels could shrink, and in some cases we might see the full
doesn’t mean he (she) knows how to ride the bike. repatriation of manufacturing in certain industries,
And we have an economy on our hands that could not for instance in pharmaceuticals, food and high-tech
survive without large-scale deficit finance and central like semiconductors. Areas deemed to be in the
banks suddenly acting like hedge fund managers. This realm of national security. Before the pandemic, the
is why it’s going to be a depression because what emphasis was on “just-in-time” production, with parts
comes next is a secular change in attitudes towards being delivered just when they were needed in the
credit and towards savings. I mean, seriously, over half manufacturing process.In the post-pandemic period,
of American households didn’t have enough cash on the emphasis could shift, to some extent, to “just-
hand to even get through three months of a job loss in-case” supply chains, emphasising proximity and
— quite remarkable when you consider Canada went
certainty of delivery. And then beyond the question
into this mess with a 50-year low unemployment rate
over government policy, we have to consider at the
of 3.5%. Not to mention the corporate sector where,
individual level, how months of isolation and distancing
for some reason, the word “liquidity” became a dirty
and in the future, a fear of mutation of the pandemic,
nine-letter word this past cycle. Now every business
are going to fundamentally alter lifestyles, and will
has working capital they have to cover with a fraction
of last year’s cash flow. And this got me thinking have a profound influence, not just on the way we live,
about how the future will be one of treating “savings” but on how we conduct ourselves in our personal and
as sacrosanct. Beyond the quarter or two of pent-up business lives.
demand release in 2021, frugality is going to emerge Then we have to consider, when we get to the
as the primary theme. It’s not the end of the world, other side, the massive government debts we will have
either, unless you’re an advocate for a sustainable and built up and how that, along with even more bloated
vigorous economic expansion.
central bank balance sheets, will get dealt with. Will the
In a narrow view, the markets are telling us that debts get monetised, or not? Or God forbid, will taxes
the ‘new normal’ will be a ‘reversion to the mean’ have to go up on the middle-class? Just some things
where life goes back to normal. And to that I say not so to contemplate in 2021 as we get our booster shots
fast. People will surely go back to restaurants, hotels and then race to the local brasserie. The stock market
and airplane travel in due course, but don’t think for
is not the economy so don’t believe for a second that
a second that there will not be residual impacts. The
record equity prices means the road ahead isn’t going
narrative emerging from the recent trading action in
to be a bumpy one.
the equity market tells us that we are going back to
our old lifestyles and that is what I would bet heavily David Rosenberg is the Founder, Chief Economist
against. I have seen, and continue to see, secular shifts & Strategist of Rosenberg Research & Associates,
in behavior that will transcend a couple of quarters www.rosenbergresearch.com
12 The Australian Business Executive - www.TheABE.com.auTechnology IPOs adding
high-growth companies
to the ASX Max Cunningham
O
utlook for the tech sector and tech listings on was short-lived, thanks in part to fiscal policy that
our sharemarket has never looked brighter. stabilised the economy and led to a global recovery in
It is a cliché to say that 2020 was an equity markets.
unprecedented year, generally because of the relentless
Since the market nadir, we have seen the All Tech
bad news. For the ASX listings business however, the
Index rally 146 per cent and the ATEC ETF become one
year was more of an annus mirabilis.
of the fastest growing funds in the market attracting
Our six-year effort to establish ASX as a genuine
$172 million FUM and still growing.
home for tech companies was vindicated in February
with the successful launch of the S&P/ASX All As important is the composition of the
Technology Index by the Minister for Industry, Science index, which for reasons of diversity is always
and Technology, Karen Andrews, surrounded by the the key ingredient. Across nine months and three
leaders of the local tech sector, bankers, fund managers rebalances, the index has grown to 69 companies with
and various stakeholders. The index launched with a
representatives from NZ, USA, Israel, Ireland, Malaysia,
market capitalisation of $100 billion and 46 members.
Singapore and Germany.
No sooner had we launched with positive press
During this period, the market cap of the index
and peer recognition than COVID arrived on the scene.
Within weeks, the index had fallen 42 per cent and the has grown to $170 billion, with the average daily
newly launched BetaShares ETF ATEC – which tracks turnover of the constituents making up $850 million
the index – was attracting little interest. of the local market. Today, ASX has over 30 listed
We were soon fielding calls from journalists technology companies with valuations greater than
about the timing of the index launch and its material $1 billion market cap compared to 10 companies five
underperformance. Fortunately, this time in the shade years ago.
The Australian Business Executive - www.TheABE.com.au 13Technology IPOs adding high-growth companies to the ASX
So technology is in and technology is Indeed, a recent OECD report captured by
everywhere, but why does it matter to the market? Crossroads highlighted that companies five years
Aside from the obvious point that tech is the old or younger account for ~17 per cent of total
future and that we are in the digital age, the tech sector employment and 48 per cent of all new job creation.
provides diversity away from Australia’s historical
These figures don’t surprise, but their benefits are
reliance on mining and financial stocks (which had left
ASX as one of the most concentrated markets in the often overlooked. Additionally, these companies are
developed world). leaders in the environment, social and governance
Tech is mainly about growth. The tech sector (ESG) measures used increasingly by investors for
total shareholder return (TSR) has averaged 23 per critical investment decisions.
cent over the past five years compared to TSR of nine
It is not just Australian companies that are
per cent for the S&P/ASX 200.
benefiting from our vibrant listed technology market.
Another contrast is that the TSR for the 200 is
driven by dividends while the tech sector is genuine We are seeing IPOs from the USA, Ireland, Israel,
organic growth. The beauty of tech is its scalability. Singapore and New Zealand.
You do not have to invest as much capital to sell your
Why do companies from the USA list on ASX?
services.
The primary drivers include the prohibitive cost of
Furthermore, the technology sector has been
being public in the USA, the attractive size of our
one of the largest sectors for raising follow-on capital.
Afterpay is a great example, having raised ~$2 billion capital market, and the ability to gain early index
since its IPO in 2016 including over $1 billion in 2020 inclusion. In addition, the very size of the US market
alone. Indeed, during the COVID crisis, most technology means companies often get overlooked, especially if
companies raised capital for growth purposes rather
they are not large consumer brands.
than balance sheet strengthening.
The momentum in tech listings continues to be It is five short years since I was pitching ASX as
positive. So much so that ASX has become one of the a capital market in a Palo Alto backyard to a group
largest stock exchanges in the world for tech listings that resembled the Mos Eisley Cantina in Star Wars –
outside of the United States. replete with a founder who was seeking funding for
The market has even given the sector’s most his start-up to undertake mining on Mars (hence my
popular names their own acronym – the so-called
intergalactic reference).
WAAAX stocks (WiseTech, Afterpay, Altium, Appen
and Xero). These companies have a range of features in Since then, ASX has attracted over 100 IPOs
common including high growth, disruptive technology from overseas, and the pipeline for foreign and
offerings and humble beginnings.
domestic IPOs in 2021 has never looked brighter. With
But the most attractive feature is that they that comes opportunities for further inclusions in the
are all deriving the majority of their growth outside
All Tech Index and greater diversity opportunities for
of Australia. On my first business trip to the United
States many years ago, I was proud to see the News Australian investors.
Corp offices on Avenue of the Americas and the new Finally, the importance of a vibrant venture
Westfield mall in Century City. capital community cannot be understated either.
I was equally proud on my last trip to the USA to In recent years, we have seen massive growth in
see Afterpay stickers on the windows of many retailers.
capital raised by VCs and an explosion in funding for
I’ve had similar experiences, whether it’s WiseTech’s
Australian technology. VCs are strategic partners for
presence in the international freight market, Altium’s
head office in San Diego, Appen’s recent acquisition in ASX and essential to the ecosystem. The outlook for
San Francisco, or start-ups in Tel Aviv telling me that technology as a sector and IPOs as a natural pathway
Xero is their accounting software of choice. has never looked brighter.
These businesses are as important as the iron
Max Cunningham is the Executive General Manager,
ore and LNG exports to our fast-growing neighbours.
Listings, Issuer Services and Investment Products
They provide export of services in exchange for
foreign currency and offer employment opportunities at the Australian Securities Exchange (ASX),
in Australia. www2.asx.com.au
14 The Australian Business Executive - www.TheABE.com.auOxanda Education
A premium operator of early education
centres across Australia’s Eastern Seaboard
A
leading private provider of Early Childhood into the education sector, Oxanda’s commitment to
Education in Australia, Oxanda Education aims establishing greenfield centres in growth corridors,
to ignite the spirit of learning, friendship and and the focus on excellence that sets Oxanda apart
community through a holistic early education program from its competition.
where kids come first.
Before founding Oxanda Education, Managing Greenfield centres
Director Adrian Fonseca spent seventeen years in
investment banking in Sydney, Singapore and London, “We’re in the business of Long Day Care,” Mr
with Macquarie Bank and Deutsche Bank. He is a Fonseca says, “and that is your traditional most well-
Director of ASX and NZX listed early learning centre known form of childcare. There are other forms, such
operator, Evolve Education Group, and part-owner and as Before and After School Care and Family Day Care
Chairman of childcare search providers CareforKids. – but the main industry piece is Long Day Care, the
com.au and Toddle, as well as Deputy Chairman of service that provides care and education for children
AFL Club the GWS Giants and Deputy Chairman of usually between the hours of 7am and 6pm.”
the Giants Foundation. Married with three children There are currently around 8,000 childcare
of his own, Mr Fonseca is extremely passionate centres across Australia, and the market is a fragmented
about the early education needs of children and is one, historically dominated by parent-run services,
heavily involved in community groups relating to traditionally with about 70% of owners having just one
them. Mr Fonseca speaks to us about his own route or two services.
The Australian Business Executive - www.TheABE.com.au 15CREATE
CREATE
EDUCATE
EDUCATE
DELIVERING
DELIVERINGOUTSTANDING
OUTSTANDINGVALUE
VALUE
BYBYCREATING
CREATINGEXCEPTIONAL
EXCEPTIONALEARLY
EARLY
LEARNING
LEARNINGSPACES
SPACES
Design
Design&&
Construction
Construction
| Project
| Project
Management
Management
childcareconstructionsolutions.com.au
childcareconstructionsolutions.com.au
PH:
PH:1300
1300227
227147
147
CCS
CCS
delivered
delivered
an an
incredible
incredible
centre
centre
ahead
ahead
of time
of time
and
and
budget.
budget.
Brilliant
Brilliant
partner.
partner.
– Adrian
– Adrian
Fonseca,
Fonseca,
Director,
Director,
Oxanda
Oxanda
Education
EducationOxanda Education
“It’s changing dramatically. Thirty years ago, discovery. It provided some great insights, and there
that percentage was higher, but it’s grown from a were some key elements to local business models that
cottage industry to a very sophisticated offering with we’ve adopted.”
purpose built buildings with high levels of amenity,
At the time Mr Fonseca and his family were in
and now taken forward as an industry by a range
Singapore, the world was experiencing the devastating
of sophisticated groups that provide a high level of
economic effects of the Global Financial Crisis. This
quality care.”
made it an extremely challenging period for many
At the large end of the market in terms of
businesses, including childcare.
number of centres is Goodstart Early Learning with
over 600 centres and G8 Education with more than “You may recall that ABC Learning Centres, the
450 followed by a group of operators owned by large large ASX listed operator, went into receivership in
private equity groups or not for profits, which have 2009, but from that tumultuous period Goodstart was
between 100-150 centres each. Oxanda sits below that born. The key proponents for Goodstart were Social
from a size perspective within a cohort of sophisticated Ventures Australia, who together with some other
private groups operating between 20 and 50 centres. charitable institutions formed a consortium to bid and
“The most positive aspect about the childcare acquire ABC out of receivership.”
industry is it’s treatment as an essential service. We Mr Fonseca’s previous time with Macquarie
saw that most dramatically during COVID – it was one Bank had left him with contacts and former colleagues
of the few industries outside of the health industry within Social Ventures, and he used this period to
where businesses remained open throughout the crisis. network and spend time with them and executives
Even during the second and very long lockdown in
from Goodstart, introducing himself to an entirely new
Melbourne, all childcare centres in Melbourne (except
industry in the process.
those themselves affected by COVID) remained open.”
“Leaving banking I had a vision and a mission to
Mr Fonseca started Oxanda Education in 2013,
do something entirely different. That mission started
after seventeen years in investment banking. His last
with a clean sheet of paper and ultimately (after a
role was running a strategic solutions business across
Asia, based in Singapore. There were two elements to while of being “clean”), turned into a business plan that
his time in the country that ended up being significant involved me starting a childcare group.
in terms of his subsequent career transition. “What do you know about education or the
“Our youngest child was actually born in sector” people said. “You’re a banker”. “So, I thought,
Singapore, and we got to experience childcare and let me be a banker and in banking style I used personal
early learning there. There’s a very heavy emphasis and family capital to acquire 3 portfolios of centres in
on early education in Singapore and learning through quick succession”.
The Australian Business Executive - www.TheABE.com.au 17National Child
Care Specialists
The only team in Australian specialising in the
marketing, sale and leasing of child care properties.
Australian Healthcare and Social Infastructure (AHSI) have a dedicated
and specialised team that focus on the sale or lease of child care assets.
AHSI have a significant track record of selling and leasing Australian
child care investments for premium prices.
The team has the ability to leverage off a genuinely unriallved
global network of AHSI offices providing direct access to capital both
nationally and internationally looking to buy and lease child care
properties.
Sandro Peluso Josh Twelftree Jimmy Tat 毕家辉 Marcella Caspani-Muto Tiffany Gyft
+61 418 389 757 +61 452 524 985 +61 439 399 118 +61 417 065 777 +61 401 361 798
sandro.peluso@cbre.com.au josh.twelftree@cbre.com.au jimmy.tat@cbre.com.au marcello.caspani-muto@cbre.com.au tiffanygyft@cbre.com.auMAXIM
n: a guiding principle, of reasoning and truth which drives our
commitment to gain maximum advantage for our clients
MAXIM is a
dynamic firm of
chartered
accountants and
business advisors
We value our people, are
committed to them, and believe in
investing in their future, which in
turn benefits our clients.
CONTACT
02 6295 8744 | www.maximca.com.au | reception@maximca.com.auOxanda Education
“All of a sudden I’m no longer a banker. People wanted to be a provider like no other, we had to ensure
started seeing me and us as a respected childcare our centres matched who we said we are and what
operator and our network and connections grew from we said we were doing. So in 2017 we sold virtually all
there”. of that acquired portfolio to a range of large groups,
“In all of that, I acknowledged I had no including G8 and Goodstart.
background in the sector so my most critical first step “Today, we’re 20 greenfield centres open, with
along side of the portfolios acquired was to also hire a another 15 opening in the next 24 months, and by the
leading and visionary Management team. I drew on my end of our growth phase in a few years, we’ll be around
own experience from banking in identifying the right the 50 centre mark, which puts us at the top end of
people and building an incredible tight knitted, leading that middle segment of the market.”
edge culture.”
Operating greenfield services has many benefits
“We’ve benefitted immensely from our ability for a group like Oxanda, affording the opportunity
to hire great talent in the educational and operational to build centres from the ground up, with complete
space with high level experience and expertise from control over location, design and specification.
other great organisations in the section, inclusive of
“Our business model now is to develop and
legal, finance and compliance executives, and then
operate newly built centres in growth corridors in
combined that with my own people management,
Sydney, Melbourne and Southeast Queensland. The
financing, and development skills. Three of my Senior
next two decades will bring incredible population and
Management team (Rosina O’Brien, Kara Parata and
employment growth as well as associated infrastructure
Greg Smith) are from G8 Education and the remaining
(traditional and social) and amenity opportunities to
member Oliver Meehan was from one of Australia’s
Western Sydney and equivalent growth corridors in
leading law firms in the childcare space.”
Melbourne and South East Queensland and this has
From a standing start and being a new entrant childcare and Oxanda positioned very well on a go
in 2013 Oxanda Education grew to 31 centres entirely forward basis.”
through acquisition.
“They were great centres and we learned much The development side of the business
through that journey, but we’d taken those centres to
their limit and the journey had allowed us as a team to From a development perspective, the most
focus in clearly on what centres we wanted to create important pillar is sourcing and originating the best
and how we wanted to deliver our educational learning opportunities and interacting with agents, developers,
environments.” Real Estate Investment Trusts (REITs), architects,
project managers and builders. All this means a great
“By 2017 we decided to pivot. We wanted to
deal of networking, time, research and relationship
develop our own centres – centres designed, built and
resourced with our go forward vision in mind – providing management.
education and care in a way that really matched the Oxanda Education has partnerships in place with
philosophies and rituals we had developed. If we truly several REITs and Funds, including Arena REIT, HABEN
20 The Australian Business Executive - www.TheABE.com.auOxanda Education
Property Fund, the Charter Hall Social Infrastructure world class centre, describing its partner (Oxanda) as
Fund, Argus Investment Partners, Home Co and one of Australia’s leading private providers of Early
Primewest. It also works closely with the leading child Childhood Education.
care agents CBRE, Burgess Rawson and Cushman and
Mr Fonseca was equally impressed by the quality
Wakefield. On the building and architecture side it has
of work delivered by CCS, a specialist commercial
great relationships in Sydney, Melbourne and Brisbane
building firm focusing on industry leading early learning
with Childcare Construction Solutions, Lanskey
spaces. “CCS delivered an incredible centre ahead of
Constructions, Total Force Maintenance, Tango
time and budget,” he says. “The way they delivered a
Projects, Point Architects and Kaunitz and Yeung.
stunning and simply beautiful centre in a natural bush
“Opportunities typically arise from a relationship setting in an urban location was just phenomenal. It’s a
or referral. The property aspects of a transaction can truly unique centre in a wonderfully unique setting and
involve a 2-3 year journey from the first discussion I welcome families and children to visit it.”
to a centre opening and there are usually twists and
CCS completed a full refurbishment of the
turns along the way. It’s thus important to have
existing building into an invigorating early education
committed and loyal development partners. This side
space. From inception to completion, Oxanda’s
of the business is relationship driven and we treat our
vision was to transform the existing building while
development partners inclusive of lawyers (King &
Collins and Arnold Bloch Leibler), financiers (NAB), incorporating the natural bush land setting, creating
accountants (Maxim Chartered Accountants) and an urban space for the next generation of children to
planners (GSA Planning) as clients.” learn and grow. The centre is a success.
“As we grow, we continue to develop new Purpose and profit
relationships and given our increasing size and profile
new relationships and opportunities naturally come to “We’re definitely for-purpose,” Mr Fonseca
us.” says. “But we’re also for-profit. What we find is that in
Partnering with Oxanda Education on their getting the purpose and the values correct, the profit
recently opened purpose-built centre, Bluebird Early and the results come naturally. I think our three points
Education Roseville, in Sydney’s North Share, Childcare of difference, our essence, are our people, our setup as
Construction Solutions (CCS) delivered an amazing an organisation and our focus on excellence.”
The Australian Business Executive - www.TheABE.com.au 21Oxanda Education
On the people side, as noted earlier, Oxanda getting success as a derivative. So, we think let’s deliver
has hired great people from other successful industry a beautiful centre, in a high needs area, with great
players who have adapted to and thrived within the educators that really care for the children, and then
Oxanda setup. The company has a very loose-tight through all of that and everything we do, families and
management structure, and this helps the staff develop the community will just want to come naturally.”
ideas, execute end to end and flourish. “At its most fundamental, we love WHAT we do
“They’ve got a great entrepreneurial and visionary and we love WHY we do it and this is what drives us.
spirit, and that comes through in everything that they In essence, we’re as vocational as a not for profit and
do in terms of creating beautiful spaces, managing its that vocational aspect and being on purpose that
all operational aspects and creating the philosophies, generates the wins.
rituals and programmes that really encapsulate our “Our commitment to communities is unparalleled
core values regarding education and care and all this and a key pillar of our core values. Childcare centres
combined is the underpinning aspect of our offering.” are essentially community-based enterprises and as
The group is privately owned, with Mr Fonseca such we are very active in the communities in which
the sole Director and Shareholder. This is a key we operate and dedicated to ensuring we’re making
difference and advantage and means Oxanda is not a difference as well as listening to and satisfying the
beholden to a listed market or a private equity group needs and wants of the community. That makes perfect
looking for fixed or increasing returns. sense and quite simply is good practice.”
“No disrespect to those groups,” he adds. “It’s “We’re also very mindful of the need to give back.
just to say that when I visit a centre, I’m never focussed As our communities support us with their patronage,
on the budget. I’m focused on – are things right? Can we support them. We’re very philanthropic with our
we improve things? What do we need to do to excel time, resources and of course money to a wide range
here? We’ll always do what’s right, and in getting things of community projects and needs across the Eastern
right we end up winning the hearts and minds of the seaboard. Our main childcare brand is Bluebird but
people who want to come to our centres.” we also have a Western Sydney brand called Little
Giants which is a partnership with the GWS Giants AFL
The focus on excellence encompasses all the
Club. It’s a partnership we’re very proud of. Under this
aspects that Mr Fonseca has already discussed. By
partnership, a percentage of revenue from the 3 Little
providing quality care and value for money, there’s Giants Centres (Little Giants Oran Park, Little Giants
a symbiotic and positive vibrational exchange with Auburn and Little Giants Killara) goes to the Giants
families. Everyone is happy and wins. and the Giants Foundation supporting people and
“In holding true to those pillars, we end up communities in need in Western Sydney.
22 The Australian Business Executive - www.TheABE.com.auOxanda Education
Social infrastructure 500 employees; and if we keep growing and continue
to provide high quality care in these communities, then
The future certainly looks bright for Oxanda we’re going to derive greater success as an organisation
Education. Mr Fonseca explains how the group intends and greater success for all the people involved.”
to remain privately owned but will still be looking to
With childcare in Australia proving in the past
achieve significant growth within the coming years.
to be a big political issue - one that can help win or
“We’ve got a vision to be around the 50 centre lose elections - there is still a significant issue around
mark, relatively equally split between NSW, Victoria affordability that dominates political and community
and Queensland. I know all 3 states very well and I concerns.
find operating in these 3 states from a management
“Yes, people will focus on affordability and I can
perspective easy – living in Sydney, I can be in
appreciate that’s where people will want to start a
Melbourne and Queensland in 2 hours respectively,
discussion but one has to look at all the elements in
spending time at the centres and with my Management
the chain that goes into delivering a childcare centre
team as well as networking with developers and other
inclusive of land prices, associated rents, employment
operators.”
expenses and operating costs,” Mr Fonseca explained,
With offices in the Gold Coast and Melbourne, “but the better place to start the conversation is the
and several operational staff members in Sydney in essential nature of childcare and the role it plays. That’s
addition to Mr Fonseca, Oxanda Education is already where the focus should be. Start the conversation with
well placed in the way it serves these three regions. the underpinning aspect of Australia needing a well-
“Opening new services is the key and the path funded and resourced childcare sector and build from
we’re on. We never want to be static. If we grow there.”
we can provide bigger and better opportunities for “Thankfully, we’ve now reached the point where
people within the organisation. We have more than there is strong bipartisan support for childcare, its
role as an essential service and the need to ensure its
adequately funded. Go back a number of years, the
Productivity Commission laid down the framework
for childcare to be treated as an essential service and
Invest for government to fund it and increasingly so on that
basis.”
“Greater government investment in childcare,
increasing access and affordability drives increases
in the participation rate which in turn increases
Create workplace opportunities, gender equality, increased
household income and GDP. Bottom line, the sum of
all direct and associated economic and social benefits
means that any government subsidies for childcare are
Grow self-funding and in fact net positive economically and
socially.”
“That’s certainly the evidence from other
countries. If you look at Scandinavia, their entire
Haben Property Fund is a specialist property investor childcare regime is virtually fully funded. Singapore is
with a track record of delivering consistent returns also a highly funded environment. Australia is definitely
from primarily investing in, repositioning, and
well funded but we could do more and the benefits are
growing centrally located retail, mixed use and
there for all to see.”
social infrastructure assets.
Affordability for families comes down to what
Haben offers wholesale/sophisticated investors Mr Fonseca calls “the gap”, that is, the difference
and SMSFs the opportunity to invest through between the childcare fee that the parent is charged
the purchase of units in its funds.
and the amount that the government will fund - which
is capped at a percentage of a scheduled childcare
CONTACT US
rate. Virtually all Oxanda centres fall well within the
Phone: 02 9302 5900
or visit haben.com.au scheduled childcare rate meaning the “gap” if any is
low – making the centre, the care and the offering,
AFSL 342515
affordable for most families.
The Australian Business Executive - www.TheABE.com.au 23Oxanda Education
“As I said earlier, there are many elements in a to be in an industry that is directed towards social
pricing chain. All businesses are subjected to annual infrastructure.”
increases in rents and wages. Some operators will At Oxanda we have an initiative called 2040. In
continuously seek to increase prices above those 2040 our current toddlers will be 21 and 22 years old.
benchmarks and that will happen in any sector but in
They will have completed early education at an early
those situations natural forces of demand and supply
learning centre, primary school, secondary school
should self-correct, and a new more efficient operator
and potentially some time in a tertiary institution or
should come in and fill that gap.”
completed a trade. Our initiative is us at Oxanda thinking
“Overall, I think you’ll find it’s a pretty balanced about what we need to do at our centres to assist the
market nationally in terms of demand and supply and future 21- and 22-year-olds, the adults in 2040, to be
pricing. While there may be a shortage of childcare bright, positive, forward thinking and socially engaged
in certain inner city areas due to land shortages or adults in 2040. It’s an exciting initiative with lots of
higher than normal fees in certain areas overall, I think possibilities and opportunities. We love the question,
that’s in the minority and approval agencies such as and we love being a part of inspiring a love of learning.
Councils are aware of these pockets and putting in If we can be a key asset in someone’s development and
place initiatives to correct this.” create early wins for children that create the building
Mr Fonseca is clear that the industry is, overall, blocks for success in later years and forever then we’ve
a good one, and well aligned with government and done everything our mission says we wish to do and
social purpose, and as a social infrastructure asset is that fills us with a lot of joy.
an excellent industry to be involved in. With a commitment to achieving excellence,
“The most rewarding part of what I do is being and the deep belief that learning is the ignition
at the centres,” he concludes, “and seeing the children switch for change, Oxanda Education is providing
running around, playing and learning, and becoming an irreplaceable service for children in South
social and school ready. We can’t really invest enough East Queensland, NSW and Victoria. Find out
in social infrastructure as a society, and I think we more about Oxanda Education by visiting
saw that during the peak of COVID. I’m really pleased www.oxandaeducation.com
24 The Australian Business Executive - www.TheABE.com.auLove’s labour’s lost:
The part ASIC plays in
investor despair Stewart Levitt
I
n March, there was an inquest in Perth into the are there considerations of humanity or public interest
drowning deaths, in 2018, of two (2) teenage that might override the imperative of law enforcement.
Indigenous boys in the presence of police.
Compare the approach of WA Police to ASIC’s
Police had been hotly pursuing them as suspects intervention in the Mayfair debt securities saga.
seen jumping the fences of private homes near the
On ASIC’s application, the Federal Court ordered
Swan Riverbank.
the winding-up of M101 Nominees Pty Ltd, which had
Police caught one of the boys and guarded him issued secured debentures promoted by Mayfair 101,
while watching the other four dive into the river - about known as M Core Fixed Income Notes, on 29 January
300 metres wide at that point. 2021. Grant Thornton, through its directors, Said
An issue at the Inquest was whether police, Jahani and Philip Campbell-Wilson, were appointed
detaining the straggler, gave too high a priority to joint liquidators.
keeping him in custody rather than to trying to reach M101 Nominees had raised approximately $67
two of the boys, crying for help. They appeared to be million dollars from “sophisticated” or “wholesale”
drowning and in fact, did drown, well before any police investors during 2019/2020.
reached them. ASIC and its preferred insolvency practitioners
Was saving lives more important than guard have created the questionable impression that Mayfair
duty? Should law enforcement always come first or was an investment fund. It was a debt fund. The Mayfair
The Australian Business Executive - www.TheABE.com.au 25Love’s labour’s lost:The part ASIC plays in investor despair
promoters borrowed money from the investors, The promoters of Mayfair 101 had entered into
who were actually lenders and issued M Core Notes, a loan with Naplend with a four (4) month term with
notionally secured to entitle Noteholders to a fixed interest, accruing at 2% per month and a default rate
return on their loan, in the nature of interest. Provided rising to 48% per annum. Arguably, the nature of
that return was recovered by the lender with agreed ASIC’s sudden intervention prevented the promoters
interest, as per the Notes, any profits generated by from refinancing this loan or negotiating an extension
the investment of those funds accrued to the benefit and placed the loan fairly and squarely in default.
of the promoters. ASIC’s crackdown on Mayfair 101 prevented the
There is nothing sinister if the promoters promotion of its debenture products on any terms,
were intending to make a profit, since it was never cutting-off a potential income stream.
represented that the Noteholders would acquire To invoke another English-language trope: The
an interest in assets but rather, good security and Noteholders were literally cast out of the frying pan
repayment with interest, in accordance with pre- and into the fire. At least in the frying pan, there was a
agreed terms. prospect that something nourishing or at least, edible,
Mayfair’s promoters had made riskier deals might emerge.
than they had disclosed and had portrayed the debt- ASIC’S chosen insolvency firm, Grant Thornton’s
funding as more secure than it really was. directors, Said Jahani and Philip Campbell-Wilson,
The promoters also relied upon the expectation were first appointed joint provisional liquidators
or hope of new investment and the projected ability and then liquidators. Inevitably, Naplend would then
to make asset sales to cover liabilities and to leverage appoint Receivers.
off the improved value of investments, made or yet to Nobody could contest the Naplend loan
be made. without paying the money “reasonably demanded”
The promoters of the M Core Fixed Income by Naplend into Court or otherwise securing the full
Notes were involved in some risky trades. There was a amount1 which would include interest accruing at
lack of synergy in material dates, relating to Mayfair’s the 48% default rate. Foreseeably, that would also
liability to repay the Noteholders and the repayment include astronomical charges usually associated with
dates on loans to and from related third parties. receivers and the lawyers whom they appoint.
The usual outcome once receivers are appointed
The fact that the Noteholders did not have the
is, “You can give an inch and they will take a mile!”
security that they were entitled to expect is partly
a result of the law, which exempts such placements Receivers and their lawyers generally are able
from regulation as Managed Investment Schemes to get away with charging “like wounded bulls”
requiring Project Disclosure Documents to be under the mortgage instrument which applies the
issued to prospective investors and lenders, who are default interest rate to those charges, encumbering
deemed “sophisticated” under the Regulations to the the security property until repayment is made. The
Corporations Act. A “sophisticated” or “wholesale” course of conduct upon which ASIC embarked in
investor does not have to be particularly wealthy and conjunction with the insolvency profession, would
has to invest not less than $500,000.00. not only have facilitated a feeding frenzy but would
have ensured that the debenture holders have about
The lack of protection afforded to sophisticated
as much chance of recovering their money, as would
investors is a product of the slackening of the regulation
a wounded mammal falling into the Amazon, of not
of the financial system by the Federal Government for
being devoured by a school of piranhas.
all except litigation funders which the Government
hopes to stymie to protect the “big end of town” from In 11 March 2021, Said Jahani, the National
being exposed to shareholder and consumer Class Managing Partner, Financial Advisory of Grant
Actions, which the shareholders and consumers might Thornton wrote to creditors, advising of his firm’s
not otherwise be able to afford. current outstanding costs of $420,059.00 and that
he anticipated future costs could bring that figure up
The April 2020 ASIC intervention was justified
to $859,059.00, to which should be added the legal
by the facts.
fees incurred to Hall & Wilcox as Advisors to PAG, the
In English, we have expressions which sum-up Security Trustee, which by November 2020 totaled
what next happened: ASIC “threw the baby out with $578,000.00 and he continued: This is only in relation
the bath water” and “killed the goose that laid the to M101 and does not include the fees charged by the
golden egg”. receivers appointed by Naplend and their lawyers.
26 The Australian Business Executive - www.TheABE.com.auYou can also read
