Paul Xiradis

Ausbil Investment Management (Ausbil) is honoured to announce that Paul Xiradis, co-founder of Ausbil and our Executive Chairman, Chief Investment Officer, Head of Equities and Portfolio Manager for the flagship Ausbil Australian Active Equity Fund has been inducted into the prestigious Australian Fund Manager Foundation Hall of Fame.

“After managing money for over 45 years and 27 years at Ausbil, I am truly grateful to accept this award,” said Xiradis. “I extend my thanks to the Australian Fund Manager Foundation and dedicate this recognition to our clients, many of whom have been with us since the beginning and for whom our work is truly intended.”

The Hall of Fame inductees list includes some of Australia’s most respected investors, including Olev Rahn, Kerr Neilson, Anton Tagliaferro, Peter Morgan, Chris Cuffe, Chris Kourtis, Geoff Wilson, Catherine Allfrey, John Sevior, Phil King and more. The Hall of Fame induction ceremony is centred around the charitable philanthropy program of the Australian Fund Manager Foundation. Over the past 25 years, the awards night has raised millions for its charity partners, including Odyssey House NSW and the Sydney Children’s Hospital Foundation, amongst other charities.

“We have certainly seen a lot on this investment journey, and it is one I enjoy taking every day I come to the office. I co-founded Ausbil with a relatively simple investment philosophy, that earnings and earnings revisions are the key drivers of share prices,” said Xiradis. “Investment management is truly a team effort. Over the years I’ve had the privilege of working with incredible talent who have helped shape Ausbil’s success and continue to apply our approach across Australian and global equities.”

Ausbil’s Australian Active Equity strategy is over 27-years old and has generated a gross long-term performance since inception of +11.3% per annum (before fees), outperforming the benchmark (S&P/ ASX 300 Accumulation Index) by +2.8% pa since inception on 1 August 1997 on a gross of fees basis (as at 30 September 2024). Ausbil’s investment approach has delivered one of the longest track records in the market, as is evidenced by the following chart of net returns.

The Ausbil Australian Active Equity Fund (ARSN 089 996 127) (Fund) return is from its inception on 1 August 1997 to 30 June 2024 and is net of fees and costs, before tax and assumes reinvestment of distributions. Returns are based at 100 on 31 July 1997. The strategy Benchmark is the S&P/ASX 300 Accumulation Index. US Equities in AUD refers to the S&P 500 in AUD terms. Global Equities in AUD refers to the MSCI World Index (AUD). A-REITs refers to the S&P/ASX 200 A-REIT index.

Australian Fixed Income refers to the Bloomberg AusBond Composite 0+ Yr Index. Cash refers to Bloomberg AusBond Bank Bill Index. Gold in AUD refers to the Australian dollar equivalent gold price as quoted on Bloomberg. Australian Inflation refers to the headline quarterly CPI rate as reported by the Australian Bureau of Statistics. Investments in cash, gold and fixed income are generally considered to have lower risks when compared with investments in Australian and global equities.

“Paul is a real professional and has built a great business,” remarked Mark Knight, Ausbil’s Chief Executive Officer, who has worked with Xiradis for over two decades. “He eats, sleeps and drinks financial markets and he understands that he needs good people around him. This is a team sport.”

Since it began in August 1997, the Ausbil Australian Active Equity Fund has negotiated a ‘crazy’ set of tail events including the US Tech Bubble, the Global Financial Crisis, the European Debt Crisis, Brexit and its aftermath, the Fed Pivot, the once in a century COVID pandemic and recession, the invasion of Ukraine by Russia and the ensuing energy crisis, the rapid normalisation of interest rates across 2022 and 2023, and the high inflation crisis of 2023/2024.

“Paul tends to get the big shifts right. For example, staying out of the overvalued REIT sector leading into the GFC in 2008 or not becoming too defensive when the pandemic hit in 2020,” said Knight. “This has helped produce excellent long-term returns and has been terrific for our investors.”

“As a firm, we are proud of Paul’s success and wish to congratulate him on joining the elite ranks of the Australian Fund Manager Foundation Hall of Fame.”

Ausbil Investment Management was established in 1997 and manages over $20bn in funds under management as at 17 October 2024.

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Quan Nguyen

In the past month Zenith has been the first Australian research house to rate three new funds from Airlie Funds Management and Firetrail Investments, and as Zenith’s Head of Equities Quan Nguyen explains, backing selective funds early is all part of a value proposition that can benefit adviser clients and their investors.

That’s because like companies, investment funds often have their own life cycle and the potential for strong performance can change as a fund grows and new investors get on board. In the equities space this is particularly true: as the best opportunities are ultimately finite, and getting into a fund early when trading is most agile, can often mean a big difference in returns for investors. In theory at least, the larger a fund grows, the harder it is to sustain the performance of its early days. Wait several years and you have a real prospect of missing the investment boat.

In February this year, Zenith published a research report that determined the best time to invest in a smaller companies fund is at the beginning of its life. Zenith believes this is due to lower levels of FUM during the early stages of a fund’s life. This allows the fund manager to be more nimble when trading stocks, in addition to having a broader investment opportunity set relative to peers who manage more assets. Zenith found that the average Small Cap fund outperformed its benchmark by approximately 12% in the first 12 months of its life. However, as the funds matured, the average excess return gradually declined to a more subdued, albeit still attractive, 7.9% p.a. by year 10, before gradually converging towards approximately 7% p.a. thereafter. As such, we believe value still remains in investing in funds that are more mature with established track records.

Zenith’s philosophy is to empower its advisers to deliver best of breed financial advice by accessing the world’s best investment opportunities as soon as practicable. That requires having a broad, lateral and empathetic mindset on what advisers and their clients require as investment solutions, often before they may be aware of its availability. It requires flexibility from a research team in what is an extraordinarily busy annual review cycle covering over 780 funds. It also requires a bold commitment to review funds through an established and thorough process – no shortcuts. Even if the opportunity for investors appears very compelling, a research rating requires a deep dive and factual assessment of whether a fund can deliver on its objectives for investors.

Quan said “In rating funds early, we need to balance out the priorities and probabilities of approving investment solutions that will add the most value to our advice clients, while allowing an appropriate track record to develop to ensure all ratings are based on solid fundamental principles and high conviction”.

Mark Burgess, Head of Research Relationships at Magellan said “Zenith has shown a willingness to identify and rate quality strategies early. They were first to rate the Magellan Global Fund in September 2007 and they have backed this up again by being first to rate Airlie in June 2018.”

Airlie Funds Managment rated first by Zenith

On 1 June 2018, Zenith initiated coverage on the Airlie Australian Share Fund with a Recommended rating.

The Fund is managed by Airlie Funds Management (Airlie) and distributed by Magellan Asset Management (Magellan). The Fund provides investors with a fundamentally driven, quality and value styled, Australian equities exposure.

Zenith has known both portfolio managers John Sevior and Matt Williams during their tenures at Perpetual where the strategies they managed generated attractive absolute and excess returns.

Zenith has a high regard for Airlie’s senior investment personnel and believes the investment process employed has the Fund well positioned to achieve its investment objectives.

Firetrail Investments rated first by Zenith

On 8 May 2018, Zenith initiated coverage on the Firetrail Australian High Conviction Fund and the Firetrail Absolute Return Fund. The Firetrail Australian High Conviction Fund has been rated Highly Recommended whilst the Firetrail Absolute Return Fund has been rated Recommended.

Zenith’s conviction in the Firetrail Australian High Conviction Fund is underpinned by the consistent application of the investment process which produced impressive long-term excess returns during the investment team’s tenure at Macquarie Asset Management (MAM). Despite the recent formation of the business, Zenith has a high regard for Firetrail’s investment personnel and capabilities and believes the Fund is well placed to meet its investment objectives.

More funds on the pipeline

Zenith is committed to uncovering new, quality investment strategies and presenting new options to its advice practice clients. With each sector asset class review, consideration is given to new funds that may be included in the ratings universe. In the most recent Australian Fixed Income Sector Review released on 31 May 2018, Zenith introduced five new fixed income strategies to the ratings universe.

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“We have removed the fund from ‘On Hold’ and downgraded it based on the lack of certainty that Mr Sevior will resume managing the portfolio and our lower level of conviction in Mr Skamvougeras as manager of the fund,” said S&P Fund Services analyst Tom Mills.

Mr Mills added: “While we acknowledge that Mr Sevior may resume management of the fund in January 2012, we note that Perpetual has not ruled out Mr Skamvougeras continuing to manage the fund beyond this date. Although we consider Mr Skamvougeras to be a very capable investor, we note that his portfolio management experience to date has been in long/short strategies with far lower levels of funds under management (FUM).”

Since Mr Skamvougeras began managing the CEF, its size has been significantly reduced as a result of some redemptions, and largely by institutional clients reallocating their investments to other Perpetual strategies. As a result, Mr Skamvougeras will be in charge of a more manageable level of FUM, which provides us with greater comfort in the fund in his hands and over its capacity in general.

“Despite our lowered conviction in the CEF, we remain comfortable with Perpetual’s well-proven process, and the breadth and depth of its large and experienced team, which has significant input into portfolio composition,” concluded Mr Mills.

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