Asteri Lures Wealthy Australians with Offbeat Private Assets

Australia’s rich are turning to obscure corners of private assets such as lobster-catching licences as they seek investments where returns are less volatile than public markets.

Sydney-based Asteri Asset Management, one of the country’s largest independent wealth advisors, which has grown to managing A$15 billion ($9.4 billion) from its founding a decade ago, is expanding the variety of alternative investments it can offer to the fast-growing rich, chief investment officer Nelson Zhou said.

“For us, the holy grail of investing is true uncorrelated assets,” Zhou said in an interview. “If you can originate them, it means that you can earn a really strong absolute return.”

The rush to park money in offbeat assets underscores the challenges money managers face to offer attractive and unique investment products in Australia, one of the fastest growing markets for wealth in Asia Pacific. Typically, such assets also come with risks of lack of transparency and liquidity that are offered by public markets.

“If you look at the investment environment today, there’s a lot of volatility around the world,” Zhou said. “Equities can be considered expensive and traditional asset classes like publicly traded debt are also very expensive, whereas an asset class like unlisted infrastructure typically has inflation protection built into it and will also benefit when rates fall.”

With over 50 partners and four offices spread across Australia, Asteri has emerged as a strong domestic competitor to major asset managers including Morgan Stanley, which boasts a book above A$41 billion, and UBS Group AG, which has more than A$30 billion under management.

The local wealth firm has been stepping up clients’ exposure to funds that own stakes in airports, develop mobile phone towers and invest in venture capital. An upside to Asteri’s
growth over recent years has been having sufficient size of funds that allow it to become a limited partner in successful alternative funds which can be choosy about their investors, Zhou said.

Asteri has amassed what it says makes it Australia’s largest institutional investor in fishing licenses, with more than A$200 million in client funds totaling 4% of its core private client portfolios. Much of that generates a cash yield for clients of between 5% and 7%, Zhou said.

To be sure, such industries are still subject to macroeconomic shocks. Australia’s biggest export partner for lobsters, China, effectively banned the trade in late 2020 as part of a diplomatic row under former prime minister Scott Morrison’s government. Zhou said the lifting of the restrictions since 2024has led to a spike in charges for leases as the market value of lobsters increased.

Asteri is working with asset manager Longreach Maris fund, which owns more than half a billion dollars of so-called Individual Transferable Quotas for Australia wild catches through its Sustainable Seafood Fund. The licenses include sustainably caught lobsters, coral trout, spanner crabs and mud crabs.

“These are controlled fisheries and the agencies dictate how much tonnage effectively you can take out to maintain biodiversity,” Zhou said.

For fishing ITQs, that means the fund can ensure that those involved in fishing meet environmental standards including protecting marine habitats as well as supporting local employment in coastal and indigenous communities, Zhou said.

The Longreach Maris fund makes money from acquiring the ITQs, which it expects to grow in value over time, while also then leasing those rights in parcels to Australian fishers,  seafood processors and exporters to generate regular recurring income.

Read the article here: Bloomberg – Asteri Lures Wealthy Australians with Offbeat Private Assets