Sydney, 1st August 2023 – Foresight Analytics Assigns Tanggram Investment Funds’ Investment Rating as ‘STRONG’.
Foresight Analytics has recently completed a rating assessment of the Tanggram Investment Fund (‘the Fund’ or ‘TIF’).
The fund has been reassigned a STRONG rating reflecting Foresight Analytics’ strong level of confidence that the fund can deliver a risk-adjusted return in line with its investment objectives. Since its inception in 2019, the fund of fund private debt offering is offered by Melbourne-based Tanggram Capital Pty Limited (Tanggram). The Fund contains two investment options: Tanggram Spark (‘Spark’) and Tanggram Seed (‘Seed’).
Tanggram has developed an automated saving/investment app as its primary channel for investment in the Fund and growth of FUM. As such, Tanggram can be considered a participant in the emerging ‘fintech’ market segment in Australia.
The Foresight Product Complexity Indicator for both options is COMPLEX, which indicates the underlying assets require specialist investment skills to acquire and manage. This type of investment is suitable for investors who understand the illiquid characteristics of these types of investments.
Currently, the fund of funds Tanggram Investment Fund is managed by four subadvisors – La Trobe, Trilogy, Banner and Aura. The exposure to underlying funds (in order of decreasing portfolio exposure and permissible limits) includes the La Trobe Australian Credit Fund, the Trilogy Monthly Income Fund, the Aura High Yield SME Fund and the Banner Low LVR Income Fund. Additionally, up to 10% of the portfolio can be allocated to cash. Moving forward, the Manager may introduce additional underlying investment strategies with greater liquidity profile.
The Fund was established on 12 March 2019 and issued its first units on the commencement date of 1 November 2019. The investment objective of the Spark and Seed unit classes is to generate income returns for investors by investing in managed investment funds which predominantly invest in secured loans, mortgage-backed securities and bonds.
As of 31 March 2023, the Fund had $11.9M in FUM, down from a peak of $16.4M in August 2022. FUM growth is ultimately critical to the financial sustainability of the Manager over the longer term.
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About Foresight Analytics’ Investment Due Diligence Rating (IDD Rating)
The objective of Foresight Analytics’ Investment Due Diligence Rating (IDD Rating) is to identify the best funds and opportunities for future investment. We assess the fund’s historical risk-adjusted performance – compared to its peers – to form a holistic view of the manager’s ability to deliver future returns. The IDD rating indicates the quality of the investment option within the context of a diversified portfolio and full investment cycle.
Foresight’s analysts use a 5-point scale to determine how the fund will perform against a range of risk factors.
- SUPERIOR indicates the highest level of confidence that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is highly suitable for inclusion on APLs.
- VERY STRONG indicates a very strong conviction that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- STRONG indicates a strong likelihood that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- COMPETENT indicates the fund may deliver a risk-adjusted return in line with its relevant benchmark and that it may be suitable for APLs.
- WEAK indicates the fund is unlikely to deliver a risk-adjusted return in line with its investment objective and that it is not suitable for most APLs.
A ‘Hold’ designation is applied to a fund’s rating if a material change impacts the fund manager, and we need to review the rating. A ‘Sell’ designation indicates the Foresight Investment Ratings Committee considers risk factors to be elevated enough that maintaining an investment in the fund as part of their diversified portfolio is questionable.
Foresight Analytics Foresight Complexity Indicator
A Foresight Complexity Indicator (FCI) highlights the complexity of an investment product based on a range of indicators. These typically include its terms and conditions, performance-based fees, liquidity structure, financial leverage, use of derivatives, rare and niche asset class/opportunity set, currency exposure and the level of transparency offered for investors. Foresight believes these factors can disproportionately affect risk–adjusted return outcomes for investors even if a manager is very skilled. Investors can use FCI as a guide to portfolio position sizing within a diversified portfolio context.
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About Foresight Analytics
Foresight Analytics, an independent Sydney based firm, provides investment diligence, data analytics, and advisory solutions to leading investment management companies, superannuation funds and wealth groups across the Asia Pacific. Foresight’s innovative, evidence-based approach blends both human and forensic insights to provide a range of analytical, predictive and market intelligence solutions to investors. Foresight Analytics was founded in 2015 by Jay Kumar, a former executive of Morningstar, Optimix Investment Management, ANZ Wealth & Private Bank and the Reserve Bank of Fiji.
Foresight’s fiduciary solutions includes Diligence Services (Investment, Operational, ESG & Risk Diligence), Data Analytics and Asset Consulting. Foresight’s fund strategy solutions include Data Analytics for asset managers, Fund Strategy Benchmarking Solutions and Strategic Research.