Seeing angels in marble

After a stint as a lecturer at RMIT University while he completed his PhD, David Sokulsky's pathway in investment management started off nearly two decades ago as a research manager for a publishing house with a superannuation data base.

That was followed by time at Macquarie as a hedge fund analyst and appointments in New York. Since coming back to Australia he has worked at UBS as head of investment strategy and was also chief investment officer at Crestone Wealth Management.

All these roads have led to him starting up his own investment management firm - Carrara Investment Management - where he and his colleagues will be able to pursue his unique approach to funds management.

Also driving the decision was a desire to grow investment capabilities beyond one listed fund.

Prior to establishing Carrara, Sokulsky was chief executive officer and chief investment officer at the Concentrated Leaders Fund (CLF) and his team managed the Australian equity listed fund for two and a half years.

When they told the board they were looking at building an independent business, the board then made the decision to appoint the new business as manager for CLF.

"We were pretty happy within CLF," Sokulsky says

"In terms of growing the business, for us, we just thought it was much easier to grow a business under a brand."

A different approach to style

The boutique is named after an Italian marble - Carrara - and Sokulsky said they wanted a name that symbolised something strong, which had been part of a creation process. Carrara is also the marble Michelangelo used to carve his statues.

"We're not value, we're not growth, we're style agnostic with the idea being we want to perform well outside of market movements," he says.

Initially the boutique will look to establish an unlisted Australian equity fund and then may look at other asset classes including international equities.

"We've done really well in Australian equities, so at the moment it's just about taking the strategy into a different vehicle," Sokulsky says.

The management team has a two and a half year track record and has returned 13.6 per cent per annum since Sokulsky and his team took over the management of the fund in early 2018.

Sokulsky was unable to comment on the conditional off-market takeover bid for CLF by competitor WAM Capital when he spoke to Industry Moves.

Risk outlook

Sokulsky believes the biggest risk ahead of us is a non-physical war between the West and China.

This confrontation started off with technology and trade and he says we should also expect to see it with capital flows.

"A capital war will develop as well, seperate to what you're seeing in the Himalayas and the South China Sea."

"How that works in terms of equity markets and currency markets - that's the big risk in terms of the macro picture."

In the near term he points out that current valuations are very heady and unjustified by the fundamentals, and investors need to be wary of this kind of market irrationality.