The Real Estate and Banking Cycle refers to a long- term property and banking cycle initially identified by Homer Hoyt in the 1930s and later built upon substantially by Roy Wenzlick in the 1950’s, economist Fred Harrison in the 1980’s and Phillip J Anderson in recent times.

The long-term Real Estate Cycle develops over four distinct stages:

• First Expansion (5 – 7 years): characterised by improving economic activity and recovery from deep recessionary conditions

• Mid-cycle Slowdown (1 - 2 years): characterised by a general slump in business activity, importantly not involving real estate nor by extension the banking sector in a material fashion

• Second Expansion (5 – 7 years): characterised by improving and then strong economic conditions, asset speculation and excessive leverage

• Cyclical Peak, Bust & Recovery (4 years): characterised by deep asset price slumps, including land, causing acute banking pressures that causes heavy economic contraction, business failures and severe economic hardship

The Portfolio will allocate capital counter cyclically at times to preserve capital of heightened risk and in growth assets in cyclically favourable times:

• Tactical Asset Allocation around the Real Estate and Banking Cycle which generally spans 18 -20 years

• Flexible Multi-Sector asset allocation

• The focus of this investment approach is to leverage the long-term Real Estate and Banking Cycle and its significant influence on asset markets at different stages of the cycle.

• Active management of a diversified portfolio which seeks to minimise losses during market downturns at times will be high exposure to equities and at other times to cash/bonds

CAPITAL PRESERVATION

Where and which phase of the long-term Real Estate and Banking Cycle dictates how much risk we are willing to accept with the ultimate aim of preserving investment capital.

QUALITY

We focus on buying good quality investments at attractive prices looking at characteristics such as low debt levels, sustainable free cashflow, competitive advantage and earnings.

SUB-SECTOR PREFERENCES

Depending on the phase of the cycle, we will look for asset classes and industry sectors to focus on to achieve the most favourable risk/review returns from our investments during the respective time period.

DIVERSIFICATION

You are less exposed to the risks of investing when your money is spread across a mix of different investments (e.g. shares, property, bonds and cash) that complement each other. In other words, simply holding more of the same/ similar thing is not the same as true diversification.

Oakleigh Investment Management Pty Limited is the Portfolio Manager of several investment portfolios, including the Oakleigh 18.6 Strategic Investment Portfolio.

Oakleigh Investment Management is part of the Oakleigh Financial Services group, an Adelaide based, boutique financial services business with advisers who have been providing financial solutions to small business owners, families and high-net-worth clients for over fifteen years. The group specialise in portfolio construction, asset allocation and investment management with a focus on equities.

Oakleigh Investment Management is advised by the experienced investment professionals that comprise its Investment Committee.

The Investment Committee of the Oakleigh 18.6 Strategic Investment Portfolio comprises four members with over 80 years of combined experience in the real estate and securities markets:

• Tim Moffatt of Oakleigh

• Phil Anderson of Property Share Market Economics

• Akhil Patel of Property Share Market Economics.

• David Prescott of Lanyon Asset Management

A number of presentation video’s are found on www.YouTube.com and search @OakleighIM.