"A true to label 'boutique style' culture": Q&A with Ausbil's Paul Xiradis
Ausbil opened its doors in April 1997 and, 20 years later, backed by a global network, the firm now employs over 50 staff and has become one of the world's leading boutique fund managers. Co-founder and executive chair Paul Xiradis talks with pride to Industry Moves about the growth of the firm, the importance of a great team and what he attributes to the firm's success. He also reflects on the changing face of the industry, including the birth of the boutique, and shares Ausbil's key goals and initiatives for the year ahead.
Ausbil opened its doors in April 1997 and, 20 years later, backed by a global network, the firm now employs over 50 staff and has become one of the world's leading boutique fund managers. Co-founder and executive chair Paul Xiradis talks with pride to Industry Moves about the growth of the firm, the importance of a great team and what he attributes to the firm's success. He also reflects on the changing face of the industry, including the birth of the boutique, and shares Ausbil's key goals and initiatives for the year ahead.
As one of the co-founders of Ausbil, what has been one of your proudest achievements so far?
Ausbil's 20-year anniversary was a special milestone for us and I am very proud of our investment returns during the whole 20-year period. We have outperformed benchmarks right across our range of strategies including large cap, small cap and long short. At the same time, we have shown leadership around ESG integration - we're believers in investing in sustainable business activities.
We could not do this though without our staff. We have built a great team, both on the investment and non-investment side. I am extremely proud of their dedication and their exceptional achievements. We started the company from humble beginnings, with only 10 employees. Twenty years on, we employ over 50 professionals nationally.
Can you share one of your most memorable investment choices since the firm's inception?
There have been a number of memorable investment choices over the years. Earlier on there were the likes of Toll Holdings which our clients benefitted from. Toll led the consolidation and rationalisation of the transport logistic industry. In the resources space, we identified Anaconda Nickel post its recapitalisation. The stock benefited from the boom in metal prices. Most recently, BlueScope has added significant value to the portfolio. We increased our position considerably at or near its low point in 2015 and it is still featured in our portfolios today.
What are your key goals for the business over the next 12 months?
For a number of years now, we have been focused on building out other capabilities, whilst maintaining a laser-like focus on our core competency, which is Australian domestic equities. We have achieved these dual objectives by adding to our exceptionally strong Australian equities team and building out new teams covering global small cap and global infrastructure whilst leveraging the strength of our strategic partner New York Life. We aim to provide the best investment solutions to our clients across regions and asset classes. As part of this, we also hand pick investment solutions that are offered by other New York Life affiliates such as MacKay Shields which specialises in global fixed income. The marketing and servicing of these new initiatives are driven by Ausbil's distribution team, directed by Mark Knight.
We recently announced the appointment of a new Global Infrastructure team to join the firm commencing in July 2018. These new capabilities will report to Ross Youngman, our CEO, while at the same time providing valuable insights complementing our prime focus of managing Australian equities across the whole capitalisation range.
" For well over a decade we have been managing ethically and screened portfolios for a number of our clients. As a natural extension we have recently launched our Australian Active Sustainable Fund which is offered to both retail platforms and institutional investors
Ausbil has a dedicated ESG research team producing proprietary integrated research with our financial analysts which together we believe, allows us to formulate better informed investment decisions. For well over a decade we have been managing ethically and screened portfolios for a number of our clients. As a natural extension we have recently launched our Australian Active Sustainable Fund which is offered to both retail platforms and institutional investors. This product screens out a number of stocks and sectors within the market and is then optimised to our long standing 'top down, bottom up' investment process. In addition, we are offering our retail market our long standing and strong performing Concentrated Australian equity strategy.
Looking back to when you first co-founded Ausbil, with the benefit of hindsight, would you do anything differently?
It was a steep learning curve in the early stages of the business. We realised early on what worked and what didn't and always played to our strengths. We determined that we were better off focusing on one asset class at a time and doing it well. We rationalised the business and focused all our energy on our strongly performing domestic equity capability. We invested in people and systems, expanded into small cap (ex 50) and offered our large and small cap product to both institutional and retail platform market.
Have you done anything special to mark the 20-year anniversary?
Yes indeed, Ausbil celebrated this milestone with those that made it all possible; our staff. We had speeches from several staff members reminiscing about the early stages of the business through to the most recent times. It was a memorable evening. There were some great stories! We also put together a 20th Anniversary book, with each staff member contributing. We look forward to updating the book for our 30th in 2027!
What do you attribute to your firm's 20-year success?
I think it comes back to culture. Our staff have an incredible work ethic and our culture is best described as a true to label 'boutique style' culture - something I'm truly proud of. All our staff have been part of the business' success and played a fundamental role in building Ausbil into what it is today. Since 1997 we have managed the organisation according to what we call "the Four Pillars of Ausbil." These are:
- Alpha generation
- Boutique culture
- Client focus
- Compliance excellence
These pillars have served us well.
It's a people business and we're very, very focused on our staff and our clients. At the same time, we understand that we must produce investment performance so we insist on organising ourselves to ensure that this informs and guides everything we do.
"We realised early on what worked and what didn't and always played to our strengths."
With over 30 years' experience in the financial services industry, what has been one of the biggest changes you have seen in the investment market?
When I first came into the industry, the investment market was dominated by the banks and insurance groups covering all asset classes in-house. There were no boutiques to speak of. What has changed is a shift to sector specialisation which led to the formation of boutique managers covering various individual asset classes. Today for example, there are over 100 managers covering Australian domestic equities. Presently, there are a number of changes occurring within the industry, one has been due to low volatility, the shift into indexation which ironically, we believe will be mis-timed as financial markets and asset classes become more challenging and volatile. Active management in Australia, as it has done in most periods, will add value in the period ahead.
The other shift which is occurring is a wider focus on ESG factors. We at Ausbil have embraced sustainable investing for over a decade and this is well and truly integrated within our investment process.
What advice would you give to your 21-year-old self?
I am of the belief that it's important to remain focused and by this, I mean it is vital to always have an end goal in mind, the 'objective' you want to work toward and achieve. Start by asking yourself 'what do I want to achieve' and put a flexible plan in place. Finally, always ensure you are surrounded by good people and be ready to adapt to change.
