Success and More Interesting Stuff

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Success and More Interesting Stuff episodes

April 15, 2024 Alex Vynokur bet his house on ETFs now his firm is challenging the global behemoths of index investing
A revolution has taken place in share investing since the turn of the century. American firms have led the charge with the likes of Vanguard and Blackrock taking passive investing around the globe.
Disenchantment with active fund managers has seen funds flow into the passive sector, accelerated by the emergence of exchange traded funds, or simply ETF’s.
In Australia, the revolution arrived late. Active managers held sway for many years before eventually the dam wall broke. The American behemoths came hard, but they didn’t have it their own way.
Aussie startup Betashares grew out of the GFC and took up the fight. Cobbled together by Alex Vynokur, an immigrant from the former Soviet Union, it wasn’t long before Betashares captured the attention of market participants around the country.
15 years on and Betashares has more than 90 ETF’s, $37 billion assets under management and 150 employees. It is the second largest ETF provider in the Aussie market and in 2023 managed to rank number one for inflows with 37 per cent market share.
As a 16-year-old Vynokur and his family left the Ukraine as the walls of the former Soviet Union came crumbling down. Alex had no English and had to start from scratch. He caught on quickly and in a few short years was studying Law at UNSW.
A brief stint working as a lawyer was followed by a job at finance house Pengana with Malcolm Turnbull and Russell Pillemer. He deduced that not all active managers were able to beat the market. Around the same time, he latched onto the emergence of ETFs. Mortgaging his house and taking time for a fact-finding tour of the US saw him kick off Betashares.
In this episode of Success and More Interesting Stuff, Alex discusses his view on the future of both passive and active investment styles, the incredible growth of Betashares and his passion for making an impact on war-stricken Ukraine.
1 hr
March 05, 2024 Australia has 12 million empty bedrooms... So could this company crack the housing crisis code?
Affordable housing seems to be an elusive goal in Australia. However, Lifestyle Communities (ASX: LIC), which is celebrating its 21st birthday in 2024, might have just cracked the code.

The company’s land rent model is spreading across Victoria at an ever-increasing rate. To date, more than 30 villages within driving distance of Melbourne have been built or are in the planning stage. In total, more than 5,700 homeowners have been accommodated with many more to come.
Lifestyle Communities started life modestly. At the helm was property veteran James Kelly ably assisted by his partners Bruce Carter and Dael Perlov. The company debuted on the ASX four years later, quietly backdooring into a listed cash box. Over the next 17 years, only the insiders and some unsuspecting investors have enjoyed the stunning 2,500% return. Today the company has a market value of $1.7 billion.
Like most successful businesses the original idea was a simple one. Make housing affordable for empty nesters in their late 50s and early 60s. Sell your home and move into a brand-new village nearby. Buy the home and rent the land, having enough capital left over to live a comfortable life.
"In Australia, every night, we have 12 million empty bedrooms, which speaks volumes to this empty nester challenge that Australia faces," Kelly says.
"We should have a 'last home buyers' grant. We know that first-home buyers' grants typically go into the builder's pocket when the government hands those out when there's a downturn in housing. But a 'last home' buyers grant would actually encourage people to get out of their homes, downsize and free up housing stock for the next generation."
Today, Kelly, at 64 years old, is a prime candidate to be a Lifestyle Communities customer. I get the feeling though that he is still happy to keep the accelerator to the floor.
I first met James not long after the company listed on the ASX in 2006. He has always been an engaging, upbeat individual, defying the typecast property developer image. In this podcast, he takes investors through the journey, and shares what keeps him inspired after 21 years in the business.
Note: This episode was recorded on Wednesday 28 February 2024.

Timecodes:
0:00 - Intro
2:33 - From an idea in a cafe to a $1.8 billion company - coming up with the Lifestyle Communities concept
5:36 - The transformation of the retirement industry
7:17 - Early financing struggles and selling the concept
11:28 - The intrinsic desire to be part of a community
13:03 - James Kelly's upbringing, family life and first foray into property
16:03 - The lasting impact and legacy of property investment and development
17:14 - The key to successful property development
19:04 - Experiences that created the leader James Kelly is today
25:52 - The importance of pricing risk as a busy owner
29:22 - The Lifestyle Communities model and its first development
34:09 - Backdoor listing on the ASX
37:18 - Lifestyle's most recent capital raise and plans for the future
40:38 - The transformation of Lifestyle's share register
41:56 - The opportunity in Generation X
45:56 - Why leaders/managers should focus on being kind
47:46 - How to solve Australia's housing crisis
50:32 - Why James Kelly won't be retiring any time soon

53 min
February 13, 2024 Kerr Neilson: This opportunity will drive the next decade of growth
Over the last four years, Success and More Interesting Stuff has been privileged to host some of the legends of the Australian equity market. Arguably though no one has had more of an impact on the industry than Kerr Neilson.

Originally from South Africa, Neilson landed on Australian shores in 1983 where he joined the ranks of Bankers Trust. BT was on the rise and Neilson stood out among the pack. After just two years, he was placed in charge of the retail business. Under his leadership, it became the growth engine of the firm managing money around the globe.

BT’s mercurial handling of the 1987 crash saw Neilson’s retail arm of the company hit its stride, garnering billions of dollars to manage. Stellar performance and a growing reputation as a canny operator saw Neilson build a name for himself.

In 1993, Neilson decided to go it alone forming Platinum Asset Management. As one BT operative described on the day of his departure, “the trading room floor at BT felt like it was hosting a funeral.”

Counting George Soros’ Quantum Fund among its original investors, Platinum got off to a flying start. Pitching itself as a global investor, the company powered through the next decade reaching $26 billion of funds under management. In 2007, Neilson and his team decided to float Platinum. It was good timing, with the market nearing a peak before the Global Financial Crisis.

Neilson ran Platinum for another decade before handing the reins to Andrew Clifford. In 2022, he decided to depart the Platinum board, ready for the next part of his journey.

In this episode of Success and More Interesting Stuff, Neilson shares some of the major moments that shaped his career trajectory, some of his biggest wins during this time, as well as why his inventive ancestors taught him the "importance of being in the game - whatever the new game is" - and right now, he believes that is AI.

He also addresses some of the major changes that he hopes are on the horizon for Platinum investors - and shares why he still believes he has a responsibility to shareholders even after all this time.

Note: This interview was recorded on Thursday 8 February 2024.
1 hr 2 min
January 17, 2024How Olev Rahn helped Bankers Trust survive the 1987 crash (and how he sees markets in 2024)
In 1987, Olev Rahn was pounding the streets of New York's financial district, meeting with Wall Street's best strategists. Rahn, who was running BT Financial's institutional business Pendal, felt distinctly uneasy about the exuberance gripping financial markets. It felt like a giant bubble, and the deeper he dug, the more convinced he became that a reckoning was just around the corner.

Rahn's instincts proved spot on as markets cratered on what has since become known as Black Monday. Combining put options and futures selling saw BT breeze through the '87 crash while others crumbled. From that moment, BT was the main game in town. Billions flowed into the coffers, and it was the number one place to work in Australia. Rhan remained key until BT Australia was sold to the principal group for 2.1 billion in 1999.

In this episode of Success and More Interesting Stuff, Rahn discusses the growth of BT Financial in Australia, the key figures that were instrumental in building the firm, and how the firm navigated the 1987 crash. Rahn also shares his views on markets in 2024 and why he is happy to have some cash at hand.

Time stamps
0:00 - Introduction
3:10 - Early life and leaving Estonia
8:15 - Developing an interest in economics
9:49 - An opportunity with Ord Minett and the XYZ method of research
15:13 - A move to London on the back of booming markets
20:03 - A call with Chris Corrigan and bringing active management to Australia
25:05 - Good performance leads to rapid growth Keating
30:41 - Kerr Neilson and Jillian Broadbent join BT as it becomes a powerhouse
34:15 - 1987 and the era of corporate excess
38:54 - The strategies Olev Rahn used to protect BT from the crash of 1987
42:00 - The signs of exuberance prior to the 1987 crash
47:39 - A golden era for Bankers Trust
50:00 - Olev Rahn’s views on markets in 2024
1 hr 3 min
December 18, 2023How ’The Speculator’s Diary’ got Ben Griffiths got hooked on small caps (and why he thinks we’re in a ’pause rally’)
Every year, fund manager Eley Griffiths invites stockbrokers from across the country to a lavish dinner. In the cutthroat world of the share market, stockbrokers rarely get treated by their clients. Eley Griffiths, the $1.2 billion small company manager known affectionately as EGG, is a rare breed.
The fact that EGG is currently celebrating its 20th year is a testament to the value that everyone contributes to the process of grinding out returns in the volatile small company market. It is a deliberate strategy and reflects the founder's personality.
Ben Griffiths is a 30-year-plus veteran of the market. The son of a comedian, Griffiths has always loved an audience, and appreciated their participation in the show, whether it be the speech at the annual dinner, or the day-to-day process of picking stocks.

Leaving school, Griffiths found himself on the trading floor of the ASX. He's old enough to remember the 87 stock market crash. From this came many lessons, including a desire to switch to funds management. He found a home as a dealer at Mercantile Mutual and was planted in the middle of a treasure trove in the form of Greg Matthews, David Paradice, Peter Mellett, and John Morgan. He progressed from dealer to analyst, and then portfolio manager. At the turn of the century, he had a brief stint at BT where he worked with Brian Eley, and before long the two had hatched a plan to form EGG and do it their way.
Looking back over 20 years, there were some difficult times. The first 12 months were a real grind, and then years later, Eley became seriously ill before passing away in 2018. Through all this EGG has moved forward with Griffiths at the helm. In the 20th year, the group is branching out into the mid-cap fund. No doubt there are plenty more returns, and broker dinners to be had.
Time stamps
5:00 The highs and lows of 20 years in small caps
9:50 The powerful role of Ben Griffiths’ grandmother
13:15 Working on the trading floor in the 1980s
20:15 His move into institutional broking
26:40 “A richer training ground you could not have hoped for”
32:00 A “blank sheet” opportunity at BT
42:30 Reflections on Lehman Brothers’ collapse
48:00 The loss of Brian Eley
52:00 His market outlook for 2024.
59 min
December 06, 2023Graham ‘Skroo’ Turner shares the highs and lows of Flight Centre and his 50 years in travel
Graham "Skroo" Turner grew up in splendid isolation. His family owned an orchard in Southeast Queensland, and he rode a pushbike to school, which was so small it only required one teacher. Even when he went to university, he avoided humans and decided to study vet science.
Skroo, now seventy-four years old, still sits atop of Flight Centre (ASX:FLT), Australia's largest travel agency, which operates in twenty-four countries. He is the fearless leader of thousands of employees and has a unique management technique that has allowed the company to scale well beyond its humble beginnings.
While Flight Centre was officially born in the early 1980s in Australia, its predecessor, Top Deck, kicked off in 1973, dreamt up over a beer with some friends at Oktoberfest in Munich, Germany. The Top Deck story is legendary in Australian corporate history, with Skroo and his clan driving buses out of London to all parts of the globe, including Afghanistan and Morocco.
He was back in London a few weeks ago to celebrate the 50th birthday of Top Deck and enjoy a beer with some of the old crew who shared his sense of adventure.
Skroo has come a long way in the 50 years and has run into a few potholes and even roadblocks. There was 9-11, The GFC, and of course the COVID-19 virus that induced a near-death experience for Flight Centre. Somehow he has battled through and still seems to enjoy it. In fact, not much has changed. He still looks and sounds like an orchard farmer from Queensland, retaining his laid-back manner that disguises an entrepreneur with a mean competitive streak.
In this episode of Success and More Interesting Stuff, Turner talks about growing up on a farm, how he began his career in tourism, his unique approach to management as well as the highs and lows of Flight Centre’s journey.
Time stamps
0:00 - Introduction
1:50 - 50-years since the launch of Top Deck
4:56 - Growing up in isolation and breeding a sense of adventure
8:59 - Travelling through Europe sows the seeds of a travel business
16:10 - The first Flight Centre stores and rapid growth
24:20 - Flight Centre lists on the ASX
26:08 - The ‘Families, Villages and Tribes’ approach to management
30:43 - Don’t sweat the small stuff and the alchemy of growth
34:56 - The enormous cost of COVID-19 for Flight Centre
40:26 - The future for airline travel in Australia
46:08 - Making Flight Centre relevant for young people
47:42 - Succession
52 min
November 27, 2023The CEO who kicked the incumbents to the curb (and delivered investors a +4000% return in the process)
It's been just over a decade since Andrew Alcock took a risk on a small up-and-coming investment platform. The gamble has certainly paid off. Since joining the firm in July 2013, HUB24's (ASX: HUB) share price has skyrocketed around 4200% - turning an ASX-listed microcap into a market-leading 30-bagger.
In the early months of 2013, HUB24 was on its knees. The company experienced a boardroom battle, an emergency capital raising, and a lack of leadership. Born out of the stockbroking outfit InvestorFirst, the company was losing millions of dollars a year and its future was doubtful.
The boardroom bloodbath saw founder Otto Buttula depart, and Bruce Higgins installed as the new chairman. The company looked externally for a fresh start - and a CEO who could bring new ideas and a large dose of optimism.
In a bold decision, they landed on Alcock, an unknown quantity to the listed market. At the time, Alcock was running the AMP-owned planning group Genesys Wealth Advisers.
HUB24’s share price in July 2013 was hovering around $1 a share and the company had just posted a loss of $9.7 million with funds under advice of just $479 million. Alcock obviously knew the industry better than most and saw a bright future for HUB24.
Fast forward a decade and things have changed. HUB24, along with its close rival Netwealth, have ushered in a new breed of financial platforms, leading the charge against the incumbents – MLC, BT, and ironically, AMP.
Today, HUB has over $80 billion in funds under advice and in FY23 it booked a net profit of just under $60 million. The company’s share price trades at around $33 with a market capitalisation of $2.8 billion.
Alcock who, as a youngster on Sydney's North Shore dreamed of playing the keyboards in a band, has clocked up 10 years in charge of HUB24 - and he believes the next decade looks even brighter for the investment platform. Along with his right-hand man Jason Entwistle and a burgeoning team, there is a belief that the surge towards the top of the charts will continue.
In this episode of Success and More Interesting Stuff, Alcock openly shares his inspirational journey to the top, some of the challenges along the way, as well as some of the exciting initiatives for HUB24 in the future.
Note: This interview was recorded on Thursday 23 November 2023.
Timecodes
0:00 - Intro
2:01 - HUB24's recent record-breaking results
3:34 - A deep dive into Andrew's beginnings
4:40 - Andrew's two early ambitions: medicine and music
5:50 - Life growing up on Sydney's North Shore in a family of six kids
10:10 - Bible college, marriage at 21, and the beginnings of a career in tech
14:40 - How Andrew was introduced to the finance industry
17:24 - Andrew's first gig as a CEO (and why he is all fight, no flight)
21:15 - A foray into financial advice at Genesys Wealth
22:54 - On what attracted him to take the opportunity at HUB24
28:53 - The first few months in the role
32:21 - How the industry has changed since then
34:22 - On the benefits of having a rival in Netwealth
35:44 - Why it's important to have a vision (but set realistic goals along the way)
37:43 - The Royal Commission into misconduct in the banking, superannuation and financial services industry (and the beginnings of a "revolution" at HUB24)
40:23 - The attributes of a good leader
44:59 - What keeps Andrew up at night
47:18 - On Bruce Higgins's retirement from the chair of HUB24
49:04 - What investors can expect from HUB24 over the next decade
52:50 - How HUB24 is using AI to improve efficiency for advisers and investors
55:38 - How investors should measure HUB24's success
58:32 - On coming out publicly and the importance of being authentic
1 hr 6 min
October 16, 2023Stick to your knitting: Anton Tagliaferro’s secret to high conviction investing
Anton Tagliaferro grew up in Malta, playing football and studying with the dream of someday becoming a doctor. This was pushed aside, however, when political unrest in his native country led him to leave for London, where he ended up studying accounting.

Soon after graduating, Anton discovered the world of funds management and was hooked on the idea immediately. Through taking advantage of chance opportunities, Anton was able to migrate into an equities manager role, where he began building a personal brand as a reliable investor.
After receiving encouragement from clients, Anton struck out on his own and founded Investors Mutual Limited in 1998. The timing put Tagliaferro and his team at the formation of the tech bubble.
"We set up, and the first six months things were going ok. And then the tech boom comes along," he recalled.
Bolstered by a background in accounting, and some unorthodox methods of avoiding the pressures of the crowd, Tagliaferro avoided falling into the common pitfalls of Dot-com stocks.
"Every single piece of rubbish with technology in the name was running, and all the while every decent company was being sold down," he said.
This led to several years Anton described as the most brutal in the business, as indices bloated with overvalued tech stocks, leaving his value portfolio in the dust. He persevered, however, and when the tech bubble eventually burst, his fund's fortunes flipped and would end up drastically outperforming the market overall.
This demonstration of high conviction investing, in the face of much criticism, built Tagliaferro and IML a reputation in the market, and their funds under management grew accordingly.
Recently, Anton has been able to move into retirement, which he now spends contributing to the development of soccer in Australia. That being said, he still keeps an eye on the markets and hasn't ruled out a return to the industry.
"If I was starting a boutique fund manager today, and I might start one next year, I haven't decided yet, I'd focus on international equities," Anton said.
"I think the Australian market - the amount of superannuation, the amount of money chasing a handful of stocks... it's such a concentrated index - and if you look at the quality below the top 20, I've gone through it a thousand times, I'm still going through it, and you take out the REITs and resources, there are very few good quality industrials in Australia."
In this podcast, Anton shares his origin story, his serendipitous journey into funds management, and the challenges he has faced along the way. He also provides his view on the current market landscape and opens up about his plans for the future.
Timecodes:
0:00 - Introducing Anton
2:12 - Growing up in Malta, early career path through accountancy
9:10 - Getting a start in London
13:36 - Coming to Australia
16:17 - Grabbed by the stock market
18:25 - How do you get into Funds Management
21:00 - Lucking into an equities manager position at Perpetual
28:50 - Perpetual launches a fund
31:25 - Move to County and lessons from institutional investors
34:20 - Investing philosophy
37:00 - "It's time to set up your own thing"
39:25 - Hardest time in Anton's career
41:45 - Collapse of the tech boom
45:20 - What drove performance
50:15 - What's the state of markets at the moment
56:26 - What's next?
1 hr
October 10, 2023 Meet the man who turned Nick Scali into a 10-bagger
Nick Scali is a furniture powerhouse. Since listing in May 2004, the store count has grown from 10 to 107 without having to tap shareholders for additional capital. Who knew Australians had such an insatiable appetite for leather lounges?
Equally as impressive as store growth are the financial returns investors have enjoyed. Since listing, sales have increased by 1,068%, net profit has increased by 1,407%, and the dividend has increased by 1,263%. From a listing price of $1 to the current share price of $10.79, Nick Scali (ASX:NCK) has been a 10-bagger for shareholders who have stayed the course.
The driving force behind this impressive story is Anthony Scali, son of founder Nick, an ambitious Italian immigrant who came to Australia in 1955 at just 18. After a brief stint selling televisions in Melbourne, Nick moved to Sydney and opened his first store in 1962 on the Hume Highway in Ashfield.
Anthony Scali worked in the family business from a young age and progressively played a more significant role in the running of the growing retailer. He officially took over the CEO role when the company was listed on the ASX and says he has no plans on stepping aside and has eyes for further expansion into the UK.
In this episode of Success and More Interesting Stuff, Anthony talks about the mindset and approach that has created one of Australia’s most iconic retailers.

Time codes:

00:00 - Introduction
01:56 - The Nick Scali advertisements
02:47 - Slow and steady growth
04:15 - Why investors are cautious on retailers
05:25 - The start of Nick Scali
08:43 - Nick Scali’s business philosophies
12:16 - How Anthony got started in the furniture business
14:01 - Moving from niche to mainstream offerings
15:31 - Lessons in debt and property
18:32 - Nick Scali (ASX:NCK) lists on the ASX
20:41 - Passing the CEO baton from Nick to Anthony
24:07 - Growing the family business
26:21 - The initial plan for store growth
27:50 - The ingredients for success in retail
35:25 - The Nick Scali niche - quality and value
37:55 - Anthony Scali’s approach to management
40:45 - Anthony Scali sells down some of his shareholding
43:54 - The vision for Nick Scali in Australia and New Zealand
45:49 - Taking the Nick Scali concept to the UK
49:32 - The outlook for the Australian market
50:57 - Antony Scali on succession planning but no plans to retire
53:45 - Property investments still intriguing, even after the 1990s experience
56 min
July 25, 2023 “It was horrific.” How Robert Kelly overcame adversity to build a $6 billion business
By the time most people reach their mid-forties, they are thinking about an exit strategy for their working life. That was not the case for Robert Kelly AM, who, in 1975, after a series of harrowing business experiences, was dusting himself off and preparing to start all over again.
Kelly is the Founder, Managing Director and CEO of Steadfast (ASX: SDF), the ASX-listed insurance broking firm with a market capitalisation of ~$6 billion. Insurance is a harsh industry where the big players compete on price and price alone. Steadfast, under Kelly’s stewardship, has taken a different path choosing to focus on relationships and networks to win the loyalty of their clients.
“It is sold on relationships and advice. If you keep selling on price, you’re a commodity, just like a cup of coffee. We have a relationship, and the relationship will win through” - Robert Kelly AM
The strategy has proven successful, and Steadfast commands more than one third of Australia’s intermediated insurance market. It appears that the job is not done and at age 76 Kelly recently renewed his contract as Steadfast Managing Director and CEO until 2026.

In this episode of Success and More Interesting Stuff, Mathew Kidman explores the highs and lows of Kelly’s business career, including the life-changing advice he received from Rugby League legend Jack Gibson.
1 hr 7 min

About Success and More Interesting Stuff

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Take a front-row seat to hear the stories behind some of Australia’s most successful and iconic sports people and business leaders. The show is hosted by Matthew Kidman, former business editor of the…