Inside the Rope with David Clark

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’’).

John Hempton, Chief Investment Officer and founder of Bronte Capital, shares insights into the current market landscape marked by volatility and retail trading phenomena like GameStop's short squeeze. He discusses 'Mass Mania,' explaining how unprecedented retail inflows create bubble-like conditions. John draws parallels between today’s market and historical speculative manias, emphasizing the importance of understanding risks for inexperienced investors. His seasoned perspective sheds light on navigating this chaotic investment environment.

In this episode, David speaks with Chris about his current roles and background to date, in addition to how to pick fund managers along with how investors can use financial returns to support charitable causes and begin their philanthropic journey. Commencing his career as a chartered accountant, Chris Cuffe entered the funds management industry in 1985. In 1988 he joined Colonial First State where he was CEO from 1990 until 2003. In 2003 he became CEO of the listed Challenger Group. Chris is now involved in a portfolio of activities in the investment and non-profit sectors which include: - Member of the Investment Committee of UniSuper, which provides superannuation services to employees of Australia's higher education and research sector; - Chairman of Australian Philanthropic Services and Atrium Investment Management; - Director of various listed companies including Global Value Fund, Antipodes Global Investment Company, Argo Investments and Class; and - Founder, directors and manager of Third Link Growth Fund.

Steve Tucker former CEO of MLC, and current Koda Capital Chairman joins David in this episode to discuss the evolution of advice and the importance it carries for high net worth individuals. Steve and David also touch on the transition from vertically integrated financial advice business models into the independent advice firms of today. As Chief Executive Officer of MLC until 2013, Steve was responsible for all of NAB’s Wealth businesses including MLC, NAB Private Wealth, and JBWere, with combined revenues exceeding $1bn per annum and over 5,000 staff. Steve has extensive financial and investment advice experience and has been a vocal and effective champion of reform and cultural transformation within the wealth management industry. Additionally, he is a director of the Banking and Finance Oath, and the chairman of Urbis.

Rajeev Gupta of the Alium Alpha Fund joins David to discuss his career to date, the history of the Alium Alpha Fund, and the businesses that it invests in. In what Raj calls a "Crossover Fund", he explains how the Alium Alpha fund focuses on investing in both private & public companies; with a particular focus on providing later-stage funding to Technology & Innovative companies intending to list on the ASX in the future. The fund targets an annualized return of 20-25%. Rajeev has 20 years of experience analysing, investing & building technology companies. Rajeev began his investment career at Goldman Sachs, where he worked for almost a decade in the investment group in Hong Kong, Singapore & New York with a focus on listed & unlisted technology companies. Rajeev then utilised his technology investment experience as a portfolio manager at both Tribeca & Merricks Capital where he ran global technology funds. He then built his own 25-person technology startup called Geckolife, before establishing Alium Capital. Rajeev has an Honours degree in Finance & Econometrics from the University of Sydney.

Richard Quin of Bentham joins David to discuss the history of Bentham Asset Management, including its spin-off from Credit Suisse, along with the various credit strategies that it manages today. Bentham Asset Management is a specialist global fixed interest and credit investment manager. Bentham actively manages a number of high yielding funds with varying risk profiles. The portfolios are designed to generate income while diversifying risk in global credit markets. Richard Quin is the CIO & Principal for Bentham Asset Management. Prior to this, he was a Director and Head of the APAC division of the Credit Investment Group for Credit Suisse Alternative Investments. Richard spent nine years within the Credit Suisse Asset Management (CSAM) fixed income team as a Credit Portfolio Manager, where he established and managed Bentham's current high yield, global income and syndicated loan funds.