Together, they have a long history of designing, building and managing highly successful investment strategies. From pioneering the Schroders Australia small and micro cap strategies to running global multi asset portfolios they have worked with a broad range of institutional, retail, charitable and sovereign wealth fund clients.
David, Jai and Eric bring real world investment experience, technical skills and a team based approach that aims to deliver innovative investment strategies for Longwave’s clients.
CIO and Portfolio Manager
Equity Portfolio Manager
Equity Investment Analyst
I remember my first investment analyst job at what was then Ord Minnett (now JP Morgan) learning fundamental company research and building tools to help the senior analysts deliver investment insights faster. Twenty-one years later, the opportunity to combine technology and insight has far surpassed anything we might have imagined back then.
Yet, surprisingly, much of the investment industry is still using tools from the 1997 era. To me, the debate has never been man vs machine but what can be achieved when we combine the best of both.
My journey to Longwave was not linear. Curiosity and a deliberate desire to build a deeper understanding of equity investing led me from equity research to an investment role at Schroders in Sydney founding microcap and small cap equity funds which I managed successfully for over seven years.
Specialisation tends not to lead to a broad base of knowledge, and so after nine years in the equity team I joined the Schroders multi asset team in Sydney. Here I had the opportunity to not only manage absolute return multi asset portfolios, but also worked with Jai to create new strategies for clients such as a US$ multi asset fund, a multi asset ETF and a range of systematic equity strategies. These systematic equity strategies drew upon my time in equities, as well as new ideas from other asset classes within the multi asset universe such as credit research applied to equity investing.
I specialise in developing and managing equity strategies built upon fundamental insights, where both the insights and the strategy are supercharged by technology. A diverse and non-traditional path has led me to this unique style of portfolio construction, with the common thread being a rigorous and scientific approach to markets. Investing should be evidence-based, un-biased, with insights consistently applied.
All assumptions should be thoroughly tested, however long held or accepted the current knowledge may appear to be.
Until 2018, I was at Schroders where I worked with David on building and managing direct active Australian equity portfolios. I also redesigned, from the ground up, the asset class forecasting, portfolio construction and risk systems which underpin the Schroder Real Return Funds and Balanced Fund. We used this platform to build the Schroder Global Target Return Fund and of the first active multi asset ETF (GROW.ASX).
Prior to joining Schroders in 2011, I was a Trading Systems Developer with Macquarie Securities Group developing high throughput, zero error tolerance algorithmic trading and execution software. I was inspired by how the careful application of cutting-edge technology can deliver accurately, and at scale, advantages from even the smallest edge.
Whether it’s writing software, building trading systems or designing equity strategies, the process has always been to analyse, understand, recreate, then innovate. Coming from an engineering background I am not bound to conventional ways of thinking about financial markets - rather, I have found it’s important to question assumptions relentlessly and maintain a consistent, disciplined approach in understanding how the world works.
I am an Equity Investment Analyst with Longwave Capital Partners.
Up until 2019, I was an Equity Analyst at IOOF covering a range of stocks across the Diversified Financials, Telecommunications and Technology sectors with a medium to small cap bias, having joined the IOOF research team in 2016.
Prior to joining IOOF, I was a senior accountant with Ernst & Young for five years in the Financial Services Assurance division and was the lead senior accountant on year-end financial statements and audits for a diverse client base in the asset management and banking industries.
A member of the Institute of Chartered Accountants Australia and New Zealand, I have a bachelor’s degree in Commerce – Accounting and Business Administration, from Macquarie University and have also completed Level 1 of the CFA program.
We believe it’s necessary to take a multi-disciplinary approach to investing. While there are many great ideas within investment markets, there are also many innovations and initiatives that can be drawn from other fields.
A prime example is the intersection of quantitative and fundamental methods of investment research and portfolio construction. For many years, there has been a separation of these disciplines. But at Longwave, we seek to harness the benefit of both approaches while finding unique insights in the synergy of combining them.
Our industry has chosen to see the transformative power of software as a challenge and threat to the unique value of human insight into the complex problems of investing. But we don’t believe that digital technology and human intellect are incompatible. Far from it. We use technology to reduce the man hours required to perform routine data and information tasks. In so doing, we can increase the amount of time our investors dedicate to generating insights and using their experience to solve our clients’ investment problems.
We believe that, in order to create value for our clients, we need to exploit genuine points of difference to our competitors. Why?
Firstly, for many clients, we are not their only investment manager and our unique approach offers valuable diversification. Secondly, our track record suggests that the differences in our perspective and approach have enabled us to succeed in a market that is difficult to outperform.
We don’t accept the mutual exclusivity of qualitative and quantitative methodologies. In analysing securities, asset classes and our portfolios, we use both. Fundamental understanding is critical in making sense of opportunities and determine the questions we ask of the data. But technology and well constructed quantitative models dramatically reduce our ‘mean time to insight’ – the position that can potentially give us an edge.
For every 100 stocks researched, investors may have true edge on less than 20 securities. Perhaps less than 10! So the challenge is to research both widely and deeply to find those few opportunities where we possess genuine investment edge. At Longwave, we employ bespoke technologies to accelerate the process of bringing fundamental insights to a broader universe of investment opportunities.
We never lose sight of the fact that our investment strategies have a specific role within our clients’ portfolios. We’re fortunate in that the experience of our founders extends beyond single asset class investing. Our multi asset class experience provides us new insights and ensures we understand our clients’ objectives and can deliver strategies consistent with those goals.
A computer can’t ask the fundamental question, “Why?” But it is second to none in aggregating answers to such quantitative questions as, “What?” We find the use of quantitative methods serve as a useful check against the many behavioural biases human investors must remain vigilant against. Properly employed, we believe that technology and quantitative models have a lot to contribute to investment decision making which is why we licence, adopt and develop technologies that help fulfil our potential to deliver better outcomes for our clients.
Nobody has said this stuff is meant to be easy. But over time we have evolved and we will continue to evolve. We will challenge our own assumptions, observe reality and test our hypotheses, in the spirit of creativity and innovation we’ll keep an open mind. Quite simply, we’ll use all means available to deliver superior investment performance.
We’d cite five factors that explain our differences:
1 | First principals not dogma
2 | Exploring a wider universe
3 | Alignment with client objectives
4 | Proprietary technology
5 | Continuous improvement
The Australian Small Companies Fund is our active and diversified portfolio of high quality small companies that has been built through the combination of quantitative discipline and fundamental insight.
This strategy serves as a high alpha, high active share allocation within the Australian equities component of an investor’s portfolio. The fund has less than 5% overlap stock exposure with the ASX200 index and provides a diversified and risk controlled exposure to high quality, emerging growth companies.
It’s managed by an experienced and aligned team that has spent over ten years investing in Australian small companies for institutional and retail investors.