Inside the Rope with David Clark

David speaks with Andrew Rado, Managing Director & CIO of Longreach Maris. A strategy that aims to provide an ecologically sustainable investment by delivering a robust alternative income stream, through scalable investment in the wild-caught fisheries Individual Transferrable Quota (ITQ) sector.

The total market capitalisation of Australia’s ITQs is estimated to be approximately A$22 billion, with the Australian wild-caught fishing industry a lucrative sector that operates within a highly regulated and sustainably managed framework. Individual fisheries are managed under a long-established quota system to achieve key sustainability and fishery industry management objectives.

Andrew has over 20 years experience as a Seafood and Agri executive, with extensive large-scale seafood industry, processing, export and strategic restructure and financial turnaround experience, within the Australian wild-caught seafood sector. He holds a PhD from Murdoch University and an MBA from UWA.

In this episode, David speaks with John Murray of Perennial, an Australian Funds Management Hall of Famer. They discuss John's background and career to date, his investment outlook, the challenges that fund managers face, as well as the key areas that he identifies as opportunities in the current environment.

John started his career like many successful Australian fund managers by obtaining his CA. He began within Price Waterhouse's (Now PWC) Auditing & Insolvency division and from there pursued a path as a credit analyst at Bankers Trust Australia before moving into funds management in the 1990s. Other key roles include Head of Equities at Perpetual Investments, Senior Portfolio Manager at Maple-Brown Abbott and Investment Director, Australian Shares at Westpac Investment Management.

John founded Perennial Value Management and commenced business in March 2000. In October 2014, he was inducted into the Australian Fund Managers Hall of Fame.

In this episode, David speaks with Peter Cooper of Cooper Investors. Peter founded Cooper Investors in 2001. As Chief Investment Officer, Peter created and implemented the firm’s VoF investment philosophy which is applied across the international, domestic and Asian equities strategies. He is responsible for mentoring investment team members and the standardisation and integration of the process across the investment teams.

Peter has over 30 years of investment management experience. In 1987 he joined the NSW State Superannuation Investment and Management Corporation as a specialist industry analyst and progressed to deputy portfolio manager of the $7bn portfolio. In 1993 Peter ran the Australian equities portfolios for BNP and then joined Merrill Lynch Investment Managers (formerly Mercury Asset Management) where he worked for 7 years, culminating in his position as Head of Australian Equities and Managing Director where he oversaw a team managing $7.5bn in Australian equities.

In this episode, David speaks with both Prasad Patkar (Head of Qualitative Investments) and Peter Brooke (Head of Quantitative Investments) at Platypus Asset Management.

Prior to joining Platypus in February 2008 Prasad was the Chief Investment Officer with Audant Investments Pty Ltd, joining that company in 2001. The role carried executive responsibility for the performance of all asset classes for the Whyte Family Office including listed equities, alternative investments, property, operating businesses and private equity investments. Prasad’s career commenced in India in 1995 as General Manager for PNH Alloys Pty Limited.

Peter joined Platypus in January 2008, and in addition to managing the quantitative portfolios, is responsible for all aspects of quantitative research. From May 2006, Peter worked as a Quantitative Analyst with MIR Investment Management. During this period, he worked on various research projects and in quantitative portfolio management.

Daniel Pickering is the CIO at The ListedReserve, a fund manager that runs several strategies that invest across the cryptocurrency ecosystem.

Being at an important juncture in the history of cryptocurrencies, whereby different coins & protocols are attempting to validate both their utility and therefore their value; Daniel from The ListedReserve sits down with David to discuss cryptocurrencies as well as their future. Daniel and David also discuss the potential of government intervention and therefore the likely impact on the value of these assets.

The ListedReserve is a fund manager based in Sydney, Australia that specialises in bitcoin and bitcoin derivatives. They believe that digital currency will drive significant global economic, technological and social change. Daniel is a Chartered Accountant that was trained at PwC who then spent almost 9 years as the CFO at William Hill before becoming the CIO at The ListedReserve.

David speaks with Tim King of Melior. Melior was established in 2018 by Lucy Steed and Tim King with backing from the founders of Adamantem Capital, Rob Koczkar and Anthony Kerwick. After scanning the market, they saw a gap for an Australian equities impact investment manager. They have formed a team of experienced investment professionals who share a common goal – to be part of the change they want to see in the world.

Tim co-founded Melior and is the Chief Investment Officer (CIO). He has worked in capital markets for more than 20 years and has over a decade of experience in ESG research. Tim was Head of Company & ESG Research for Colonial First State Global Asset Management’s Australian Equities Core Fund from 2016 to 2018. Prior to this he was Head of Advisory for governance research firm Regnan and Head of Company & ESG Research for Deutsche Bank from 2003 -2013. He was also a top 3 rated sell side analyst.

Beryl Capital is a strategy run by David Witkin that has typically invested in merger arbitrage opportunities. This strategy has delivered investors net returns over 20% p.a. since inception in June 2011 to March 2021.

However, David joins the podcast again to discuss the strategies transition towards also investing in SPACS - Special-Purpose Acquisition Companies. He touches on what a SPAC is, the structure of the deals, the potential risks and the potential upsides.

David is a 2001 graduate of Harvard University magna cum laude in Economics, whose senior thesis was about merger arbitrage. His merger arbitrage career started in 1998 when he left college for one year to work on the arbitrage desk at Bear Stearns & Co., Inc. Mr. Witkin worked as a merger arbitrage analyst at Bear Stearns, Mason Capital Management, Citigroup Alternative Investments and Hayground Cove Asset Management before managing his own money in 2009 and his first outside capital in 2011.

Following on from their discussion late last year (2020), 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, specific sectors and the ongoing discussion regarding value vs growth.

Frank and David touch on the trends that helped provide this return, as well as how Frank is thinking about markets at the moment. Frank and David also delve deeper into the investment thesis behind infrastructure assets such as airports, as well as the implications of COVID and their broader outlook going forward.

 

Over the twelve months to 31 March 2021, the Koda Enduring Equities Portfolio is up 59.76% compared to the ASX200's return of 37.47%. Over 3 years, the reference portfolio has returned 18.58% p.a. compared to the ASX200's return of 9.64% p.a.

Producing annualized returns of 23.33% p.a. since inception May 2013 to Feb 2021, the Arnott Opportunities Fund has outperformed the MSCI by over 15% p.a.; and in this episode, David and Kenny discuss both the evolution of Arnott Capital and the approach taken by the team to generate such 'asymmetric returns'. That is, in Kenny's words "Finding ideas with a lot of upside and not a lot of downside".

Kenny Arnott has thirty years experience in equity and commodity markets. Prior to founding Arnott Capital, Kenny was at Macquarie Bank from 1994-99 in the Commodity and Equities Group as a derivative trader. From 1990-94 he was at Dunavant Enterprises, employed as a commodity trader. Dunavant Enterprise at the time was the largest cotton trading firm globally.

Arnott Capital is a boutique absolute return fund manager founded in 1999, by Kenny Arnott, with the vision of delivering Asymmetric returns for investors. The firm is solely owned by staff and is a significant investor in the strategy alongside external investors.

In this special recast, we're trying something a little different. Returning 300% since episode 5 was published in November 2017, ARK has grown into a global phenomenon well-known for investing in some of the largest growth names of the future. Companies such as Tesla, Nvidia, Square, Shopify and more.

ARK defines ‘‘disruptive innovation’’ as the introduction of a technologically enabled new product or service that potentially changes the way the world works.

Companies within ARKK include those that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies, industrial innovation in energy, automation and manufacturing, the increased use of shared technology, infrastructure and services and technologies that make financial services more efficient (‘‘Fintech Innovation’’).