Matthew Smith Reporter

Matthew Smith has been a business and financial journalist for more than a decade. He previously worked with the Financial Times Group, reporting from New York on company buyouts and refinancing in the wake of the Global Financial Crisis. He started his career reporting on the funds management industry in Sydney.

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Rivkin 2.0: Sons dial down the bravado

Published 30 January 2013 17:21, Updated 01 February 2013 16:01

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Rivkin 2.0: Sons dial down the bravado

“We’re obviously a lot more introverted and media shy than dad was. I’ve got a boat and I was tempted to use it but that’s not really us as much,” says Jordan Rivkin (left), pictured with his brother Shannon. Photo: Nic Walker

When the late Rene Rivkin – the money man with a penchant for open shirts and big cigars – started the Rivkin Report in 1997, former friend and Labor minister Graham Richardson marked the occasion to the delight of media and onlookers by cracking a bottle of French champagne aboard Rivkin’s 31-metre yacht.

The Rivkin Report became a tip sheet for investing in the sharemarket that seemed to bring retail investors on to the same page as financiers, who could get wind of big moves in listed companies before they happened.

With his art collection, property deals and well publicised sharemarket wins, Rivkin became a human billboard for the lifestyle his followers aspired to, helping him build a subscriber base that peaked at 55,000 towards the end of 2000.

Then came an rap on the knuckles from the securities regulator, the Australian Securities and Investments Commission, for selling shares in companies he was simultaneously recommendng to subscribers.

But it was insider trading charges for buying Qantas shares after receiving a tip the airline was about to buy a smaller competitor, Compass, that sunk Rivkin in 2003, precipitating the downward spiral that lead to his death in 2005 at the age of 61.

Sitting in the current modern and minimalist Rivkin offices in Darlinghurst in Sydney’s east, it’s difficult to find any aesthetic reminders of the colourful Rivkin legacy, apart from a fleeting resemblance in his two sons, Shannon and Jordan, who are both directors of Rivkin Securities and in charge of driving the company into its next phase, along with Scott Schuberg, Rene Rivkin’s former understudy and now Rivkin Securities CEO. The Rivkin Report has maintained a following of a little more than 2000 devotees that continue to pay for the same type of event-driven market insights that made the Rivkin name famous and then infamous a decade ago.

Brand Rivkin set for relaunch

The Rivkins have spent the past 12 months planning a relaunch of the Rivkin brand. Aimed at the self-directed retiree market, it’s fairly clear, considering the soft focus yellowy-orange flower petals of the new logo and buttoned-up business shirts worn by the Rivkin sons, that the company’s second coming is unlikely to be marked with a bottle of Bollinger on a luxury yacht.

“We’re obviously a lot more introverted and media shy than dad was. I’ve got a boat and I was tempted to use it but that’s not really us as much,” says Jordan Rivkin, the younger of the Rivkin sons, in response to a request to shoot photos for this article aboard a boat, or in front of a car, or next to any object that might channel the Rivkin marketing machine at the peak of the go-go days.

Schuberg says he doesn’t want to get ahead of himself in pushing the Rivkin brand into the market again. He intends to expand the subscriber base organically through word of mouth, starting with the clients that have maintained a “one of the family” affinity with the Rivkin name.

SMSF market in their sights

The new Rivkin offering includes two subscriber-based reports – Rivkin Local and Rivkin Global – as well as a self-managed superannuation fund (SMSF) product. The idea is to package a service for self-directed retirees to take care of the administration of their funds and give them stock tips along the way to trade any spare cash they have in those funds.

The company and its 16 staff handle the administration of the various assets that come with an SMSF – including real estate, trusts and the like – but it’s clear that direct share investing is still the main sizzle in this latest Rivkin offering.

Shannon Rivkin points out that his own wealth is 95 per cent allocated to the equities market.

Rivkin Securities holds only a financial services licence for general advice, so it won’t be advising clients where to put their money based on an individual’s personal circumstances.

Event driven newsletter

Rather, Rivkin Local is an event driven newsletter like the old Rivkin Report, which recommends stocks to build a model portfolio that holds about 15 names at any given time.

Stocks typically are recommended to be held for around six months, based on their upside potential thanks to an impending event, such as a merger, a spin-off or a capital markets deal.

According to the company’s dissection of its own performance, its model portfolio has completed 602 trades since July 1998 and returned 9.3 per cent on average per trade, with an average holding time per stock of 29 weeks.

Schuberg says the investment process has been inherited from the stockpickers who worked with their father on the original Report.

“It’s exactly how dad did it, the whole report was driven by event-driven scenarios and that’s what we are doing with Rivkin Local,” Jordan Rivkin says.

Shannon Rivkin is in charge of the performance of the domestic tips and, besides completing his Diploma in Financial Markets in 2004, lists inheriting his father’s strengths in event driven trading as the basis for his professional qualification.

Market-moving power diminished

While Rivkin Local doesn’t have the same market-moving power as the Rivkin Report did, when subscribers would pile into a stock at the tip of the founder’s hat, Schuberg says the company holds itself to high disclosure standards, including listing stocks the founders are personally about to sell or buy.

Schuberg recognises the market for direct share investing has changed dramatically with the advent of the internet and the proliferation of discount brokers since Rivkin started spruiking his report in the 1990s.

However, Schuberg and the Rivkin sons see an enormous opportunity in the cash that’s sitting in term deposits and trusts in the 478,000 or so SMSFs in Australia. The SMSF asset base has been growing at 8 per cent a year and now holds about $440 billion.

Battle against ‘deeper pockets’

Schuberg acknowledges the challenges in competing for the SMSF dollar against players with “much deeper pockets than us”, but he believes any baggage that may have been carried by the Rivkin brand in the past has been largely shed.

“We’ve never really felt the negativity among our subscribers, that seemed to come and go really quickly,” he says.

The feeling that members are part of the Rivkin family is what Jordan says the brand was always about and what he expects will appeal to self- directed investor today.

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