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  1. Australian Unity Annual Review 2019
  2. Platforms
  3. Wealth & Capital Markets

Wealth & Capital Markets

The Wealth & Capital Markets (W&CM) platform comprises the following business units: Advice; Investments; Life & Superannuation; Property; and Trustee Services.

The strategic purpose of the W&CM platform is to link Australian Unity's valuable efforts in helping Australians secure their financial wellbeing with the capital and social infrastructure needs of communities.

Financial performance

Wealth & Capital Markets financial result Full year to 2019 $million Full year to 2018 $million Variance
Total segment revenue $180.9 $170.4 6.2%
Operating expenses $130.4 $133.5 2.3%
Adjusted EBITDA $50.5 $36.9 36.7%

The W&CM platform recorded a 6.2 percent increase in total segment revenue to $180.9 million (2018: $170.4 million). This result reflects positive underlying revenue growth across all business units in the platform.

Adjusted EBITDA increased to $50.5 million representing a 36.7 percent increase for the year ended 30 June 2019 (2018: $36.9 million). This strong result in adjusted EBITDA was achieved though underlying business growth in the property, investments and trustees units, and favourable outcomes in specific initiatives in social infrastructure related developments. It also included a legal settlement received in the Life & Superannuation business. In addition, the result benefited from ongoing work within the platform, designed to streamline operations and optimise capital usage.

The W&CM platform manages investments, property assets and developments (and associated debt facilities), and provides advice and trustee services, totalling $20.71 billion (2018: $20.31 billion).


The Property business continued to extend its capabilities during the year, with assets under management increasing (including from completed investments) to $2.99 billion (2018: $2.76 billion). As of 30 June 2019, its multi-year development pipeline stands at $1.26 billion (2018: $1.25 billion), and lending and debt facilities on behalf of investors (through property funds and its commercial property lending activities) of $1.59 billion (2018: $1.71 billion). The decrease in lending facilities is due to the close out of facilities no longer required to support current funding needs.

Key examples of the Group's involvement in social infrastructure are the Herston Quarter development and the Healthcare Property Trust. Construction of the $390.0 million Surgical, Treatment and Rehabilitation Service (STARS) by the Healthcare Property Trust commenced in May 2018, with practical completion planned for the second quarter of the 2021 financial year. On 9 August 2019, development approval for the restoration and re-use of the heritage buildings within the Herston precinct including the redevelopment of the public realm, was received from Economic Development Queensland. Further stages including the restoration of the heritage buildings, are expected to commence in coming months.

Australian Unity's Healthcare Property Trust, the largest fund of its kind in Australia, increased assets under management to $1.63 billion (2018: $1.51 billion) and achieved a return of 9.3 percent for the year. In addition to the development of STARS noted above, the Trust also made a number of property acquisitions and developed other sites including Tuggerah Lake Private Hospital in New South Wales, which opened in May 2019, and the expansion of the Peninsula Private Hospital in Victoria, which is expected to be completed in December 2019.

The ASX-listed Australian Unity Office Fund (ASX: AOF) achieved a return of 24.5 percent, outperforming the S&P/ASX 300 A-REIT Accumulation Index by 5.2 percentage points. During the year to 30 June 2019, AOF has successfully progressed council and other planning milestones for the development of a property at 2 Valentine Avenue, Parramatta in NSW. On 4 June 2019 AOF announced that a cash offer to acquire all units in AOF not already owned had been received from a consortium formed by the Charter Hall and Abacus Groups. The offer price has subsequently been increased to $3.04 per unit.

The other funds in the property business recorded a successful year of investment performance, outperforming against their benchmarks, with Australian Unity's Diversified Property Fund achieving a return of 11.2 percent and its Retail Property Fund achieving a 10.2 percent return. During the year the Retail Property Fund agreed contracts to dispose of its fifty percent interest in the Waurn Ponds shopping centre. The Retail Property Fund was also awarded direct and hybrid property fund of the year at the 2019 Money Management Lonsec Fund Manager awards. The Property Income Fund also experienced strong inflows and provided a one-year return to 30 June 2019 of 13.5 percent.

Support for the Australian Unity Select Mortgage Income Fund continued to grow with annual inflows of $74.3 million, with the value of the lending portfolio reaching $212.7 million at 30 June 2019 (2018: $132.9 million).

Through the SIDG, the property business worked closely during the year with the Independent and Assisted Living (IAL) platform on the review of the Retirement Living and Aged Care portfolio. Refer to the Developments section under IAL for information on properties in that portfolio.

Life & Super

Australian Unity's Life & Super business continued as Australia's market leader in investment and funeral bonds, and a leading provider of education investment funds, with $2.34 billion in assets under management and administration (2018: $2.23 billion). During the year, sales across Life & Superannuation’s products reached $221.5 million (2018: $216.2 million).

Support for Life & Super’s products increased particularly from the independent financial adviser network and the business continued to work with industry superannuation funds to make its products available through this large and growing network.

Based on information from Strategic Insight Data as at 31 March 2019, the Life & Superannuation business remained number one in the investment bond sector in terms of assets under management with 27.3 percent of funds under management and was second in terms of sector inflows for the year to 31 March 2019 with 27.2 percent of inflows.

Funds under management for education solutions increased by 13.9 percent to $229.2 million (2018: $201.3 million). Australian Unity also occupied a leading position in the pre-paid funeral market via its specialised business Funeral Plan Management, with funeral funds under management growing to $699.5 million (2018: $639.0 million) with more than 90,000 clients. During the year, the categories able to be claimed as funeral service expenses were expanded to allow a more diverse range of cultural and ceremonial activities to be claimed under its funeral bonds.

In October 2018, following a seven-year legal dispute, the High Court of Australia handed down its decision in Ancient Order of Foresters in Victoria Friendly Society Limited (Foresters) v Lifeplan Australia Friendly Society Limited (Lifeplan), a wholly-owned subsidiary of Australian Unity Limited, with the court finding in favour of Lifeplan. The judgement amount determined by the court was on an “Account of Profits” basis and resulted in a favourable outcome to the Australian Unity Group.


The Investments business unit, including its joint venture partners, managed funds under management (FUM) as at 30 June 2019 of $6.00 billion (2018: $5.58 billion). During the year, the business experienced positive net flows from retail, middle and institutional markets. In particular, its joint venture partner, Platypus, was awarded a significant institutional mandate. Client interest grew more generally in sustainable investment capabilities attracting positive flows into the Altius Sustainable Bond Fund. In addition the A-REIT investment management capability was fully established internally and investments in this area are now managed directly. 

The Investments business continued to refine its focus on its core areas of cash, fixed interest, Australian equities and property securities together with further developing its socially responsible investment platform. During the year under review, Investments' joint venture partner Acorn Capital Limited launched the Acorn Capital Expansion platform, which will invest in emerging Australian companies, with $52.0 million provided by investors in its initial capital raising. To date three investments have been made with further opportunities being negotiated.

The W&CM Investments team also managed the investment portfolios of the Group amounting to approximately $680.0 million, including its capital stable and highly liquid insurance reserves, achieving a weighted aggregate return of 3.4 percent for the year (2018: 2.8 percent). This result was well above its strategic benchmark of 2.2 percent and compares favourably to the return available on risk-free cash (measured by the Bloomberg AusBond Bank Bill Index) of 1.97 percent.

Returns across many funds and asset classes were above benchmark with over 75 percent of funds managed recording returns above benchmark over the year and more than 85 percent of funds achieving returns above their benchmark over the three years to 30 June 2019.


The Advice business is focused on helping clients to improve their financial wellbeing and ultimately achieve their long-term lifestyle goals.

The continued change in the regulatory regime for advice services, and resulting increased complexity, continued to reinforce the growing need in the community for valued providers of quality advice services. The Advice business seeks growth in this context as a differentiated provider, within a mutual organisation.

During the year, a new leadership team was established, with a focus on positioning the business for sustainable growth and operational scale supported by enhanced supervision, investment and technical functions.

Throughout the year, the number of advisers (including limited authorised representatives) decreased to 184 (2018: 194), with FUM decreasing slightly over the year to $6.20 billion (2018: $6.42 billion). The net decrease in advisers and FUM was largely due to the departure of some non-aligned self-employed practices; with new self-employed practices also being recruited.

Despite the decrease in FUM, Advice revenue increased 6.3 percent to $58.3 million (2018: $54.8 million). In addition, self-managed investment accounts constructed by the Advice business grew in FUM by $36.8 million to $201.0 million.


During the year, the Trustees business completed significant work to update its arrangements with existing clients and to provide a strong foundation from which to continue to grow the business. This included the implementation of a new computer operating system to support and strengthen its service and operations capabilities, and the establishment of three common investment funds for the benefit of its clients. These common funds now have $124.1 million of clients’ funds invested in them.

The completion of a program to reduce the legacy book, resulted in a reduction in active FUM and trusteeship to $325.2 million (2018: $360.7 million) due to the closure of legacy estates and the appointment of more suitable administrators for some protected clients. This work has better positioned the Trustees’ business for future growth.

Significant work continued to further extend the range of trustee services and solutions nationally with new tribunal and court appointments across various states.

Estate planning, legal and taxation services revenues continued to grow during the year as the demand for these services, through the network of advisers, accountants and other centres of influence, continued to increase. As a result, the size of the national will bank, and the number of executor and trustee appointments also continued to grow.

The Trustees business expanded its business-to-business capabilities with a focus on the development of national legal partnerships and philanthropic opportunities.


With economic growth continuing, albeit somewhat low by historical standards, a broad yet focused range of businesses, and a material and growing presence in the funding, development and management of Australia's social infrastructure, the period ahead should continue to provide opportunities for the platform to offer customers valuable investment and financial opportunities, and to deliver important benefits to many areas of the community.

The Herston Quarter project will continue to be a key focus of the platform as it unfolds this unique example of a response to Australia's social infrastructure challenge. Other areas of social infrastructure need are also being explored. The platform’s ability to identify assets and partnerships, and access debt and equity from a more diverse range of sources, will be important as it looks to launch further initiatives in social infrastructure and impact investing.

The W&CM platform is well positioned to benefit from the collective impact of rising and better-planned wealth accumulation, the challenges and opportunities presented by Australia's ageing population, and the changing regulatory landscape and community expectations.


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