Ironstone Funds › » Investment Thesis

Professional Approach to Amateur Market Segment

The Fund was founded on the basic principle that a professionally managed approach to the Australian Residential Property Market should generate superior returns vs. the sector average.

There are several underpinning reasons why this should be true.

• Unlike the share market, whose buyers and sellers are largely institutions, residential assets are transacted mainly by amateur investors (or homeowners)
• It is these “amateur” investors which represent the average performance
• In the absence of significant institutional participation, there is a marked lack of sophistication in the sector
• Due to asset incomparability and infrequency of transactions, residential property is an “imperfect” market, with market values difficult to ascertain as accurately as, say, shares

These factors all contribute to making Residential Property an inefficient market.

Such high levels of inefficiency create opportunities for those with an information, skills or resources advantage – and for a sophisticated and professional model to thrive.