Inside the Rope with David Clark

Izzy Jensen is the founder and portfolio manager at Kakariki Capital, a specialist environmental and carbon commodities asset manager. After completing a Bachelor of Commerce at the Victoria University of Wellington, Izzy returned to Sydney to begin at the leading infrastructure manager, Morrison & Co, where she worked for seven years and was responsible for research and origination in carbon and environmental markets.

Throughout the episode, Izzy and David discuss the founding of Kakariki Capital and more specifically, the Kakariki Carbon Fund 1.0. Izzy explains the unique value proposition of the fund, aiming to help decarbonise the planet while also delivering exceptional returns by investing in carbon credits. She highlights the recent switch that has occurred in the last 18 months, which has seen corporates get on the front foot regarding emissions reductions. Izzy and David also analyse and outline their outlook for the carbon space, comparing the markets for compliance and voluntary offsets. Izzy then responds to potential risks associated with the strategy and how the fund plans to combat these if they arise.

Adrian again joins the podcast to discuss the current economic environment and in particular, how it is impacting private debt and Merricks’ Partners Fund. Adrian is the CEO and CIO of Merricks Capital, responsible for the overall running of the business, acting as a group director and Chairman of the Investment Committee. Merricks has an impressive track record and has solidified itself as a leader in the private debt space in Australia.

During the episode, Adrian discusses the current impact on and outlook for the private debt market in an environment of inflation, higher interest rates and a potential recession. He highlights the current valuation issue that exists in Australia, whilst explaining why there is not a simultaneous supply issue. Adrian and David also compare the private debt market in Australia to markets overseas and discuss the advantages that private debt lenders possess in relation to banks. Adrian then gives his outlook for the current development and building industry and how it is likely to play out given rising costs, fixed contracts and a consequent difficulty to deliver profits.

Grant McCarthy spent the early years of his career at Yahoo observing and working across several of Yahoo's investments in some of Australia's early SAAS (Software As A Service) success stories such as Seek and CarSales. Today Grant runs Tidal Ventures, a seed-first venture capital investor primarily focused on SAAS businesses that he founded back in 2016. Performance for the initial funds has been impressive, with Fund 1 producing a money-on-money return of 3.6x since inception.

Grant joins David to discuss the learnings through his career as well as the history behind Tidal Ventures. Grant also highlights the benefits of investing in what he considers high growth trajectory SAAS businesses when compared to traditional industrial-focused companies. He also touches on why he believes seed first is the most compelling area of venture capital to focus on.

Grant leverages a background in digital media and 20+ years of experience investing in seed companies in Asia & Australia and advising early-stage founders on their most critical challenges.

In what has been a challenging quarter for growth companies, fellow Koda Partner Frank Macindoe joins David in another episode of Inside the Rope to provide an update on the recent performance of the Koda Enduring Equities Portfolio (KEEP), along with his outlook on markets, broad market concerns such as inflation, the risk-free rate, and company valuations.

Frank highlights the rise of 10-year government bond rates and the implications this move has had on equity markets. He also touches on several companies that he currently likes, and why in his view their share prices don't accurately reflect the future prospects of their businesses. Finally, Frank and David also cover the areas of the market that Frank is currently finding attractive and those that Frank is pro-actively trying to avoid.

Over the twelve months to 31 May 2022, the Koda Enduring Equities Portfolio is down -0.76% compared to the ASX200's return of 4.84%. Over 10 years though, the reference portfolio has returned 17.42% p.a. compared to the ASX200's return of 10.36% p.a.

Damon Petrie a consultant investment director at ADM Capital and joins David to discuss the Cibus fund that is focused on investing in food businesses whose profitability can be enhanced through the development and implementation of disruptive strategies that create and capture value in the food supply chain.

Damon is a Consultant Investment Director at ADM Capital responsible for implementing the Australian and New Zealand agricultural strategy. Damon is a Member of the Institute of Chartered Accountants of Australia and New Zealand and holds a Bachelor of Business from The University of New England. He has spent the last 12 years working in Audit, Financial Reporting and Taxation in both public practice and commercial enterprises, predominately in the agricultural sector. In his previous role, Damon was responsible for the formation, integration and sale of a beef supply chain, comprising of Sanger Australia and Bindaree Beef.

In this episode of Inside The Rope, David is joined by Ian Beatty the Managing Partner of SecondQuarter a fund that primarily invests in growing but commercially viable Australian and New Zealand technology businesses. Ian and David discuss the difficulty of investing in venture capital businesses in the current environment, alongside the opportunities that it presents for investors.

Growing up in Melbourne and spending his weekends on the family's sheep farm, Ian has always had a keen interest in financial markets thanks to his father's involvement in the industry. Ian began his career before the dot com crash at internet.com, an analysis and insight business for websites, where unbeknownst at the time, Ian was afforded the opportunity to work alongside now Australian tech royalty Mike Cannon-Brooks and Niki Scevak during the early stages of their careers. Ian has since accumulated further experience spanning funds management, multi-asset-class investing, particularly venture investing, as well as operational experience in technology startups.

Mark joins David to discuss his career and as well as the origins of L1 Capital that he founded in 2007 alongside Raphael (Rafi) Lamm. Since starting L1's flagship long short fund, Mark and the L1 team have generated strong outperformance over the index, with the fund returning 26.7% over the past 12 months to May 2022 alone, against the ASX/S&P 200's 4.8%. Over a longer 7 year period to May 2022, L1's Long Short Fund has returned 23.5% p.a. against the ASX/S&P 200's 7.6% p.a.

Mark is a Joint Managing Director & Chief Investment Officer of L1 Capital. Since co-founding L1 Capital in 2007, Mark has jointly managed L1 Capital’s Australian equities strategies including the flagship L1 Capital Long Short Strategy.

Launched in 2014, the Long Short Strategy has delivered net returns of greater than 25% in 6 out of the 7 calendar years it has been running and is the best performing long short fund in Australia since inception (FE Fund Info database).

In a rising rate environment, Chris Joye joins David to discuss where investors should look for returns going forward. Throughout the episode, Chris covers a range of different asset classes, such as Private Debt, Bonds, Property, Equities and Cryptocurrencies.

Chris also touches on how far he expects the RBA to raise rates, and the broader consequences on asset prices such as his expectations of a 15-25% reduction in residential real estate prices as rates continue to rise.

Finally, David and Chris also discuss recent geopolitical events such as Russia's invasion of Ukraine, as well as the additional ongoing risks that geopolitical events pose to financial markets and asset prices.

Chris founded Coolabah Capital back in 2011 and is also contributing editor to the AFR. Prior to starting Coolabah, Chris worked at both Goldman Sachs and the RBA.

John joins David again to discuss the current market uncertainty and how Bronte Capital is choosing to invest.

John touches on several key topics that are currently being discussed by investors. such as Russia's invasion of Ukraine, the impact China's Covid-Zero policy is having on supply chains, as well as green technology and the capital expenditure necessary to allow countries to go entirely carbon zero.

Finally, John touches on where Bronte is currently looking for opportunities today, including countries in central and eastern Europe such as Poland.

John has been a financial markets professional since 1999 and is Chief Investment Officer, Founder and co-owner at Bronte. John was Head of Financials at Platinum Asset Management and its youngest partner. After Platinum listed in 2007,

John started Bronte Capital in 2009.

Thomas Weber (German/Swiss) is a co-founder and a Managing Partner at LGT Capital Partners Ltd. He chairs the firm’s Alternative Investment Committee and the Liquid Alternatives Manager Selection Committee.

LGT Capital Partners is a global alternative investment firm with a successful track record since 1998 in providing innovative solutions for investors across several strategies including private markets, liquid alternatives and other multi-assets.

After working in Switzerland as a management consultant, Mr Weber joined LGT Bank in Liechtenstein in 1989 as an Assistant to the Chairman and Project Manager. In 1991, Mr. Weber moved to the Portfolio Management Division as Head of Methods and Marketing. In this function, he was responsible for improving and developing the investment process, launching new investment products as well as managing a portion of the global equities portfolio. In 1996, Mr. Weber co-founded LGT’s third-party hedge fund activities.