Family office manager EWM Group expands into Adelaide to meet client demand

Private credit remains a key part of the family office toolkit, despite some red flags in the sector, as long as you do it right, EWM Group managing director Brad Scott says.

EWM managing director Brad Scott Picture: Supplied

Plenty of red flags have emerged in the private credit space over the past couple of years, EWM Group managing director Brad Scott says, but it remains a key part of any family office manager’s portfolio - as long as you do it right.

Mr Scott was in Adelaide this week, opening a new office in collaboration with South Australian firm Capital Family Office, in response to demand from local clients and growing opportunities in the state.

EWM, which counts golfer Adam Scott as a client, markets itself as Australia’s first multi-family office, launched back in 2005, and now has offices in Brisbane, Sydney and Adelaide.

Mr Scott - no relation to the golf champion - said setting up an office in Adelaide was a natural evolution.

“We’ve been operating for the best part of 20 years now and Adelaide has always been an area we’ve had an interest in,’’ he said.

“We’ve had clients here that we’ve been looking after over the last several years and what we’ve seen is there’s a real appetite and growth opportunity in the family office space here in Adelaide.

“There’s been more and more wealth that’s been created in addition to the traditional multi-generational wealth that exists.’’

Mr Scott said there were few sectors the fund manager avoided - with the exception of exotics such as cryptocurrency and the like.

While the wilder end of the private credit market has come in for criticism recently, with those particularly in the banking sector saying its lack of regulation poses higher than acceptable risk, Mr Scott said high-end family offices had been navigating the sector for many years and knew how to do their due diligence.

“The private credit space is really interesting as it’s been a real appetite in the family office space, and family offices have been investors in private credit for a very long period of time before it became really popular,’’ he said.

“What we’re seeing now is that every Tom, Dick and Harry seems to be setting up a private credit operation over the past couple of years and for us that creates a bit of a red flag.

“Private credit is still an area that we like, but we tend to focus on providers who have been there for a long period of time, have been through market cycles, have a good level of security and can manage different economic environments.

“We’re very, very selective as to who we use and we find that in that space a lot of family offices tend to co-invest with like-minded groups that they know and trust and have invested with for a long time.

“While that private credit space is very large, in the family office space it’s a very small universe in terms of who they tend to back and support, because they’ve done it for a long period of time.’’

Mr Scott said in the past few years family offices had considered public markets overvalued, and with time frames in illiquid areas such as private equity, venture capital and property pushing out, private credit and other liquid assets had become more attractive.

“I’m sure that will change as and when we see a correction and when we start to get some exits in private equity and venture capital and IPO markets open up,’’ he said.

Mr Scott said EWM’s client book was “industry agnostic”, but were relatively uniform in the sense that they had been very successful, and were looking to ensure that the family wealth was grown and maintained over the longer term.

“Part of our role is being that independent manager of managers, we help them navigate, sitting on their side of the table, rather than being someone trying to sell them a product or service.

“We’ve had everything from sporting backgrounds, entertainment, technology, mining, energy, property, retail. We’ve dealt with traditional owner groups which have received significant funds through land rights, right through to business owners who are still in their business or have had a liquidity event.’’

Succession planning and helping subsequent generations manage their wealth was also something clients were looking for, he said.

Originally published as Family office manager EWM Group expands into Adelaide to meet client demand