Having decided to pursue a career outside funds management, today will be my final day at Forager. It is rare you get to work with people of this calibre, personally and professionally, so cheers guys for making Forager such a great place.
Before I go I’d like to share with you all some of my experiences in the business, and a few things I’ve learned about funds management and investing generally.
When I first joined Intelligent Investor Funds Management, as it was then known, four and a half years ago, we became a three-person business, based in Rushcutters Bay. We had $14m in the 2 year old Value Fund (now the Forager Australian Shares Fund), still some way short of what’s required to have a viable business, and were still in the process of establishing a track record. Steve declared he would wind the business up if we didn’t have good results by year five – I’m pretty sure he meant it. It’s fair to say it was an exciting time, but we had lots to do.
But once I took my first look at the portfolio, an eclectic assortment of cheap shares, I knew we were cooking with gas. And so it’s proven. Today Forager is closing in on $200m funds under management, has tripled to six people, is now a standalone business. Most importantly, we have produced good performance for our investors through some difficult years for the market.
So what’s worked well for us? For me three factors come to mind.
The first is that value itself works and we’ve stuck to it. Though we don’t get every decision right, the focus on value at Forager hasn’t wavered. Many investors seem to think value is just one attribute of the investing equation. For us, all the attributes of investing form part of the value equation. Having a deep and resolute grasp of that basic principle is so important.
Astuteness is the second factor that comes to mind. This is the skill of investing, a matter of continual improvement. It involves having people who are widely read, numerate, fluent in accounting and have a practical sense of how business works. You then need to take these skills and combine them to produce good analysis, sorting out in a coherent manner what is important and why.
That itself requires a blend of independent thought, healthy scepticism, but also the balance and humility to ensure you understand the uncertainty and only invest when the odds are truly in your favour. And I think at Forager we’ve had a good blend of these characteristics through the team. We try not to be madly contrarian, just contrarian when the facts support it.
Thirdly and lastly, the ability to be opportunistic has been crucial for us. It might sound obvious, but investing is competitive, and if you have a good team you want them to be empowered to act (the opposite of course holds too!). Compared to other fund managers, we’ve had a huge free-kick in this area. There is no institutional pressure on us to worry about short-term performance, and that gives us enormous freedom to roam the market seeking value in whatever form it appears.
Over the years we’ve invested in over-leveraged property trusts, botched healthcare amalgamations and distressed mining services companies. Some had dubious management, some too much debt, some were lousy businesses, some were good businesses temporarily obscured. The only thing they had in common was they were cheap.
Inevitably, many of these cheap businesses got even cheaper after we purchased. For most fund managers that’s a big issue. For us, funded by a diverse base of like-minded value investors, it’s been no problem at all. When we’ve told you, and we try to be upfront, that we are venturing into unconventional areas, there has been no pressure to change tack, even when early losses are worn.
Many of you I’ve met or spoken to over the years, and I’d like to send a big thanks for your support. You are a big part of what makes Forager tick.
I’m sad to go but also really looking forward to a holiday and then a new challenge. It’s been an amazing experience that I’ll always remember fondly, and I’d like to send a special thanks to Steve for being such a fantastic boss and teaching me so much.
Cheers everyone and all the best,
15 thoughts on “Signing Off at Forager”
Good luck Matt your 3 points are spot on and is the reason value investing for the likes of us is best done on the tail and expertise of guys like you… have fun Ray and Jane perth
I never had the pleasure of meeting you but I can tell you I have really enjoyed the way you articulate your thoughts. It’s rare to see such meticulous work portrayed in such a human way- with authority yet tempered with humility. You will be a loss to the business and to funds management but I’m sure you will succeed in any career path you choose. Best wishes in all your future endeavours.
Enjoyed your posts and research notes. All the best with whatever you do next, but I don’t think it’ll be at Dick Smith
I hope this has nothing to do with the article you wrote about Dick Smith failure!
Anyway all the best mate!
Really sad to see you go Matt, but I get it. All the best. Any hints what’s in store for the future?
Go and apply for Greg Medcrafts job at ASIC Matt. Plenty of references from Forager readers I would suggest.
I think your article on the Heist at Dick Smith deserves some sort of folklorish honours. Well done for having the skill and nous to write it, and for Forager the courage to ‘publish’ it.
All the best
You’ll go down in history as the man who penned “The Heist” piece.
Well done, and all the best.
Also unlikely to be going to Anchorage Capital I suspect.
Maybe no spot at The Chanticleer newsdesk either
Sorry to see you go Matt but all the best for whatever the future holds. Perhaps a high paying role at private equity to stop you publishing articles on any more deals?
Thanks for all your VALUable work at Forager – I appreciated reading your blog articles, listening to you on II Podcasts, and most of all, your value investing nous. Sorry to see you go and all the best for the future.
Sorry to see you go Matt, best of luck in the future. Thanks for all your efforts in making Forager such a success.
Just happened to read your Anchorage Heist article and just happened to learn you are leaving. All the best for your bright future!
Congratulations on the new role and commiserations for Forager investors (and team). I like the three points you raised which is the reason Im invested in the fund, particularly having your values focused in a great place. Im sure you will do a fine job in your next role as you have with Forager, best of luck and best wishes.
thank you for serving our investments over 4.5 years
congratulations on your motza win fall – to be free to choose
for the moment its is time to par-ta… time to roll the dice
told Steve a wiz-bang email to Matt will follow as a parting gesture…
time to lament:
https://www.youtube.com/watch?v=w4Pu_JuPILw – ben afflick’s ‘boiler room’ speech
http://www.youtube.com/watch?v=WO4tIrjBDkk&list=RD02OaiSHcHM0PA – time to heal as a team
time to dream:
https://www.youtube.com/watch?v=V1bFr2SWP1I – somewhere over the rainbow
here are a few clips to get you in the mood…
for you next wealth creation venture – rich in time or money!
http://www.youtube.com/watch?v=AGt5f70K02Q&list=RD02OaiSHcHM0PA – show me the money, Jerry
http://www.youtube.com/watch?v=rkRIbUT6u7Q&list=RD02OaiSHcHM0PA – money makes the world go round
http://www.youtube.com/watch?v=WCkOmcIl79s&list=RD02OaiSHcHM0PA – ABBA money money money
http://www.youtube.com/watch?v=JkhX5W7JoWI&list=RD02OaiSHcHM0PA – Pink Floyd money
http://www.youtube.com/watch?v=OaiSHcHM0PA – show me the money, Jerry
http://www.youtube.com/watch?v=N9098SMcOk8 – Jerry Maguire – Show me the Money (Kenetic Typography)
now, go way and think about that next golf shot…
what do you really really want
ps don’t worry be happy – bobby mcferrin