Kerr Neilson

Last updated

Kerr Neilson
Kerr Neilson.png
Born (1949-10-17) 17 October 1949 (age 73)
Johannesburg, South Africa
Nationality
  • Australian
  • South African
Alma mater University of Cape Town
Occupation Investment manager
Known forCo-founder, Platinum Asset Management
Spouse
​
(div. 2015)​
Children2

Kerr Neilson (born 17 October 1949[ citation needed ]) is a South African-born Australian investment manager who co-founded Platinum Asset Management. Neilson's ability to consistently choose high-performing stocks has seen him dubbed "Australia's Warren Buffett". [1] [2] [3] As of February 2023, his net worth was estimated at US$960 million according to Forbes . [4]

Contents

Early life

Kerr Neilson was born in Johannesburg, South Africa on 17 October 1949.[ citation needed ] Neilson first demonstrated an inclination for a future in investment management when he bought his first stock at the age of 13. [4] In 1971, Neilson graduated with a Bachelor of Commerce from the University of Cape Town. [5] His comprehension of commerce, originated from a family steeped in invention dating from the Industrial revolution in Scotland. James Beaumont Neilson was a Scottish inventor whose hot-blast process greatly increased the efficiency of smelting iron.

Career

Neilson trained as an investment analyst under John Evans in the pensions department of Cortaulds, London. [6] After returning to South Africa in 1972, he became head of research at Anderson Wilson Stockbrokers. He then moved to Australia ten years later to join the funds management arm of Bankers Trust Australia, in May 1983.

Platinum Asset Management

In 1994 Neilson co-founded Platinum Asset Management with the financial backing of George Soros. [7] Neilson acted as managing director, executive director and chief investment officer. Founded as a specialist company in international equities, Platinum Asset Management managed an estimated A$22  billion in funds in 2020. [8] Platinum Asset Management continues to adopt Neilson's investment ideologies with a contrarian, long-term investing philosophy that looks beyond short-term market turbulence to achieve strong long-term absolute returns. [8] In 2018, Kerr Neilson stepped down as Chief Executive Officer and was replaced by Andrew Clifford, the CIO of Platinum who adopted both roles. [8] Kerr Neilson resigned from the Board of Platinum Asset Management in 2022. [9]

Platinum originated as a specialist company in international equities and continues to operate globally in 2023, with a multi-billion-dollar portfolio. [8] The success of the company is attributed to Neilson's ability to transcend short-term market turbulence and focus on long-term returns, a philosophy that was developed over decades. [10] This approach was imbued into Platinum Asset Management with Neilson as CEO and CIO.

In 2015 Neilson gave a talk on what makes a great investor. Controlling one's emotions is the first priority but in addition, the talk suggested, it is essential to avoid availability bias and extrapolation. [11]

In 2018 Neilson penned a widely read blog titled 'The Beautiful Game' of Investing. [12] The blog highlights investing is not just about the shiny new thing. In fact, investors' focus on the shiny new thing gives rise to the tired old thing becoming unusually boring and neglected and consequently under-priced. It is from this understanding that price is everything, yet it is also nothing, without an understanding of the inherent qualities of the investment under review.

Argyle Fund

In March 2021 the Argyle Fund began with the function of managing the families' financial interests. The AFR reported [13] that Argyle Fund runs a varied listed share portfolio9 with more than 100 stocks but has 85 per cent invested across the largest 60 positions.

Performance

Kerr Neilson's track record is estimated at +17.1% p.a. over 40 years (1984 – 2023). An original investment of $10,000 thus turns into $5,445,189 by year 40 or equates to a 545x return on one's original investment. The MSCI Total Return Index in AUD over the same time period, has delivered +9.4% p.a, highlighting Kerr's material out-performance of +7.6% p.a. for 40 years. The track record puts Kerr Neilson among an elite tier of global investors, with track records [14] in excess of 35 years or more. All calculations are in fiscal years, include income and capital, apply reinvestment and are before fees.

The 40-year track record is calculated using a period that spans four portfolios:

The remarkable performance of other funds managed by Mr Neilson under the BT Selects Market umbrella, like the (1) and (2) below suggests a high degree of conceptual and market agility

  1. BT Select Markets Imputation Fund, +18.6% p.a. 1986 to 1992; and
  2. BT Select Markets LATAM Fund, +79.8% p.a., between 1991 and 1993.

What is remarkable is that Neilson out-performed materially in down markets. During the Australia fiscal year of 1988, the BT Select Imputations Fund, achieved +39.8%. By comparison the Australian All Ordinaries Index fell 13.3% [19] (The fiscal year of 1988 including the 20 October 1987, fall of 25%, its largest one-day loss ever). In another difficult period in global markets post the tech boom of 2000, the Platinum International Fund rose by 59% from 2000 to 2003, whilst the MSCI fell by 31% in total.

Over 40 years, Neilson's performance has had few down periods; those were notably in 2011-12 and the 2022 fiscal year, when the Argyle Fund dropped 2.8% yet the MSCI fell 11.9%.

Neilson Foundation

The Neilson Foundation was established in 2007 to support both the arts and charities that work towards social cohesion. The foundation was created from funds raised by the flotation of Platinum Asset Management. Since inception, the foundation has disbursed over $150 million. [13] The current value of the Neilson Foundation is in excess of AU$260 million.

The foundation favours innovative initiatives in two principal areas:

A list of over 40 organization recipients is referenced on the Neilson Foundation website [20]

Kerr Neilson continues to manage the funds of the foundation, with his traditional approach.

Personal life

Neilson and his former wife, Judith, divorced in 2015. They have two children. [21] In 2009 Kerr and Judith Neilson established and opened the White Rabbit Gallery in Chippendale Sydney to display Judith's collection of Chinese contemporary art. Judith accumulated the collection from quarterly visits to art studios across China, since 2000. Judith has one of the world's most significant collections of contemporary Chinese art. [22] The White Rabbit collection has been reported in many publications (the SMH, Herald, and AFR) as a collection without comparison. [23]

Publications

Two booklets have been published by Platinum Asset Management, titled Reflections on Investment and Curious Investor Behaviour. In compiling the booklets, he explains his reflections from his own experiences. In the foreword Neilson says that investing leans heavily on common sense, which is both a prop and a hindrance to the learning process.

Net worth

In 2007, Kerr Neilson floated 20% of Platinum Asset Management on the ASX. [5] The majority of the shares Neilson retained (57%) were valued at A$2.9 billion and made Neilson both a billionaire and one of Australia's wealthiest people. [5] Neilson was listed in Forbes' lists of Australia's 50 richest people and Australian billionaires from 2010 until 2019. [5] In 2023, his net worth was assessed at US$960 million, according to Forbes. [4]

Related Research Articles

<span class="mw-page-title-main">International Finance Corporation</span> World Bank Group member financial institution

The International Finance Corporation (IFC) is an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in less developed countries. The IFC is a member of the World Bank Group and is headquartered in Washington, D.C. in the United States.

An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges.

The Vanguard Group, Inc., is an American registered investment advisor based in Malvern, Pennsylvania, with about $7.7 trillion in global assets under management, as of April 2023. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in corporate America.

An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked companies, insurers, pension funds, sovereign wealth funds, charities, hedge funds, REITs, investment advisors, endowments, and mutual funds. Operating companies which invest excess capital in these types of assets may also be included in the term. Activist institutional investors may also influence corporate governance by exercising voting rights in their investments. In 2019, the world's top 500 asset managers collectively managed $104.4 trillion in Assets under Management (AuM).

<span class="mw-page-title-main">GIC (Singaporean sovereign wealth fund)</span> Singaporean sovereign wealth fund

GIC Private Limited is a Singaporean sovereign wealth fund that manages the country's foreign reserves. Established by the Government of Singapore in 1981 as the Government of Singapore Investment Corporation, of which "GIC" is derived from as an acronym, its mission is to preserve and enhance the international purchasing power of the reserves, with the aim to achieve good long-term returns above global inflation over the investment time horizon of 20 years.

A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A fund of funds may be "fettered", meaning that it invests only in funds managed by the same investment company, or "unfettered", meaning that it can invest in external funds run by other managers.

<span class="mw-page-title-main">MSCI</span> American financial service provider

MSCI Inc. is an American finance company headquartered in New York City. MSCI is a global provider of equity, fixed income, real estate indexes, multi-asset portfolio analysis tools, ESG and climate products. It operates the MSCI World, MSCI All Country World Index (ACWI) and MSCI Emerging Markets Indexes among others.

In finance, assets under management (AUM), sometimes called fund under management, measures the total market value of all the financial assets which an individual or financial institution—such as a mutual fund, venture capital firm, or depository institution—or a decentralized network protocol controls, typically on behalf of a client. Funds may be managed for clients, platform users, or solely for themselves, such as in the case of a financial institution which has mutual funds or holds its own venture capital. The definition and formula for calculating AUM may differ from one entity to another.

<span class="mw-page-title-main">FactSet</span> American financial data company

FactSet Research Systems Inc., trading as FactSet, is an American financial data and software company headquartered in Norwalk, Connecticut, United States. The company provides integrated data and software. For fiscal year 2021, FactSet's total ASV and professional services revenues were $1.68 billion. FactSet's total market value is approximately $15 billion.

The Future Fund is an independently managed sovereign wealth fund established in 2006 to strengthen the Australian Government's long-term financial position by making provision for unfunded superannuation liabilities for politicians and other public servants that will become payable during a period when an ageing population is likely to place significant pressure on the Commonwealth's finances. As of October 2023, the fund has US$136 billion in assets under management.

<span class="mw-page-title-main">Australian Ethical Investment</span> Australian public company

Australian Ethical is an ethical investment management company, listed on the ASX, and based in Sydney, Australia

<span class="mw-page-title-main">Alternative investment</span> Investments other than stocks, bonds and cash

An alternative investment, also known as an alternative asset or alternative investment fund (AIF), is an investment in any asset class excluding capital stocks, bonds, and cash. The term is a relatively loose one and includes tangible assets such as precious metals, collectibles and some financial assets such as real estate, commodities, private equity, distressed securities, hedge funds, exchange funds, carbon credits, venture capital, film production, financial derivatives, cryptocurrencies, non-fungible tokens, and Tax Receivable Agreements. Investments in real estate, forestry and shipping are also often termed "alternative" despite the ancient use of such real assets to enhance and preserve wealth. Alternative investments are to be contrasted with traditional investments.

Partners Group Holding AG is a Swiss-based global private equity firm with US$141.7 billion in assets under management in private equity, private infrastructure, private real estate and private debt.

Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is about an alignment of an investor's beliefs and values with the allocation of capital to address social and/or environmental issues.

Moore Capital Management LP (MCM) is a New York–based, global investment management firm headquartered in New York, New York. In September 2018, MCM had $10.2 billion in total assets under management.

<span class="mw-page-title-main">First Sentier Investors</span> Australian Investment management company

First Sentier Investors, formerly known as Colonial First State Global Asset Management in Australia and First State Investments elsewhere, is a global asset management business that manages US$146.2 billion in assets managed on behalf of institutional investors, pension funds, wholesale distributors, investment platforms, financial advisers and clients worldwide. First Sentier Investors provides active, specialist investment capabilities managed by a group of independent investment teams. They take a long-term approach to investment with a focus on preserving capital and performance through market cycles.

Allan Gray is an investment management company from South Africa. The company also has offices in Botswana, Namibia and Eswatini, and maintains a close relationship with sister companies Orbis Investment Management and Allan Gray Australia. Its clients include institutional investors, individual investors, insurance companies, trusts, foundations and foreign institutions.

<span class="mw-page-title-main">Emmanuel Clive Pohl</span> Australian businessman and philanthropist.

Emmanuel Clive (Manny) Pohl, AM, is an Australian businessman and philanthropist.

Platinum Asset Management is an Australian asset management company. It has been publicly traded on the Australian Securities Exchange since 2007. It is a constituent member of both the S&P/ASX 200 and S&P/ASX 300 indexes. In 2015, it was ranked as the largest hedge fund group in Australia as well as the second largest in Asia-Pacific.

References

  1. ↑ Washington, Stuart (23 May 2007). "Meet the $2.9b Man of Platinum". The Sydney Morning Herald. Retrieved 18 June 2012.
  2. ↑ Schmidt, Lucinda (20 July 2009). "Profile Kerr Neilson". The Age . Australian.
  3. ↑ Robinson, Gwen (23 May 2007). "Australia's own 'Buffett' is platinum-plated". Financial Times: alphaville.
  4. 1 2 3 "Forbes profile: Kerr Neilson". Forbes. n.d. Retrieved 15 February 2023.
  5. 1 2 3 4 "Kerr Neilson". Forbes. n.d.
  6. ↑ "Portfolio Talk: Kerr Neilson". Good Returns NZ. New Zealand. 3 October 2002. Archived from the original on 19 July 2011.
  7. ↑ Myer, Rod (28 December 2003). "Taking a punt proves Platinum's mettle". The Age . Australia.
  8. 1 2 3 4 "Home". www.platinum.com.au. Platinum Asset Management. n.d.[ self-published source? ]
  9. ↑ "Sharemarket addict Kerr Neilson farewells Platinum". Australian Financial Review. 16 November 2022. Retrieved 14 August 2023.
  10. ↑ "Platinum's Kerr Neilson: It's all about the price".
  11. ↑ Kerr Neilson - what makes a great investor , retrieved 14 August 2023
  12. ↑ "The Beautiful Game". www.platinum.com.au. Retrieved 14 August 2023.
  13. 1 2 "Why Kerr Neilson knocked back Melinda Gates". Australian Financial Review. 19 February 2023. Retrieved 14 August 2023.
  14. ↑ "Stewart's bridge to Huston's Future". Dakota Value. Retrieved 14 August 2023.
  15. ↑ "Prices and performance | BT". www.bt.com.au. Retrieved 14 August 2023.
  16. ↑ "Managed Fund and LIC Products - Platinum Asset Management". www.platinum.com.au. Retrieved 14 August 2023.
  17. ↑ "Platinum International Fund - Platinum Asset Management". www.platinum.com.au. Retrieved 14 August 2023.
  18. ↑ Family Office Calculation, using Factset Portfolio Analytics
  19. ↑ "FactSet Login". login.factset.com. Retrieved 14 August 2023.
  20. ↑ "WHO HAVE WE SUPPORTED?". Neilson Foundation. Retrieved 14 August 2023.
  21. ↑ "Billionaire Kerr Neilson to hand over $3bn slice of empire to wife after messy divorce". The Sunday Telegraph. Australia. 10 May 2015. Retrieved 12 May 2015.
  22. ↑ "White Rabbit Gallery" (streaming video). ABC Arts Online. Australia: ABC TV. 2 November 2009. Retrieved 18 June 2012.
  23. ↑ Farrelly, Elizabeth (12 February 2021). "What drives Judith Neilson? Inside an astonishing Sydney art empire". The Sydney Morning Herald. Retrieved 14 August 2023.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.