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Stick to your knitting: Anton Tagliaferro’s secret to high conviction investing

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Episode notes

Anton Tagliaferro grew up in Malta, playing football and studying with the dream of someday becoming a doctor. This was pushed aside, however, when political unrest in his native country led him to leave for London, where he ended up studying accounting.

Soon after graduating, Anton discovered the world of funds management and was hooked on the idea immediately. Through taking advantage of chance opportunities, Anton was able to migrate into an equities manager role, where he began building a personal brand as a reliable investor.

After receiving encouragement from clients, Anton struck out on his own and founded Investors Mutual Limited in 1998. The timing put Tagliaferro and his team at the formation of the tech bubble.

"We set up, and the first six months things were going ok. And then the tech boom comes along," he recalled.

Bolstered by a background in accounting, and some unorthodox methods of avoiding the pressures of the crowd, Tagliaferro avoided falling into the common pitfalls of Dot-com stocks.

"Every single piece of rubbish with technology in the name was running, and all the while every decent company was being sold down," he said.

This led to several years Anton described as the most brutal in the business, as indices bloated with overvalued tech stocks, leaving his value portfolio in the dust. He persevered, however, and when the tech bubble eventually burst, his fund's fortunes flipped and would end up drastically outperforming the market overall.

This demonstration of high conviction investing, in the face of much criticism, built Tagliaferro and IML a reputation in the market, and their funds under management grew accordingly.

Recently, Anton has been able to move into retirement, which he now spends contributing to the development of soccer in Australia. That being said, he still keeps an eye on the markets and hasn't ruled out a return to the industry.

"If I was starting a boutique fund manager today, and I might start one next year, I haven't decided yet, I'd focus on international equities," Anton said. "I think the Australian market - the amount of superannuation, the amount of money chasing a handful of stocks... it's such a concentrated index - and if you look at the quality below the top 20, I've gone through it a thousand times, I'm still going through it, and you take out the REITs and resources, there are very few good quality industrials in Australia."

In this podcast, Anton shares his origin story, his serendipitous journey into funds management, and the challenges he has faced along the way. He also provides his view on the current market landscape and opens up about his plans for the future.

Timecodes:

0:00 - Introducing Anton
2:12 - Growing up in Malta, early career path through accountancy
9:10 - Getting a start in London
13:36 - Coming to Australia
16:17 - Grabbed by the stock market
18:25 - How do you get into Funds Management
21:00 - Lucking into an equities manager position at Perpetual
28:50 - Perpetual launches a fund
31:25 - Move to County and lessons from institutional investors
34:20 - Investing philosophy
37:00 - "It's time to set up your own thing"
39:25 - Hardest time in Anton's career
41:45 - Collapse of the tech boom
45:20 - What drove performance
50:15 - What's the state of markets at the moment
56:26 - What's next?