Sydney-based Ausbil Investment Management, which oversees $22 billion in assets, is a money manager that has experienced a challenging year marked by fund underperformance and key personnel changes. The firm, a prominent player in Australian equities, recently saw the departure of star small-cap stock picker Andrew Peros to L1 Group in July, preceded by co-portfolio manager Tom Cutler’s move to Ophir Asset Management.
The firm’s performance has drawn attention, with seven of Ausbil’s nine actively managed Australian equities funds trailing their respective benchmarks over the past 12 months. This includes its flagship $2 billion Australian active equity fund, as well as its micro-cap and small-cap strategies. The flagship fund returned 4.8 per cent in the 12 months through July, lagging the S&P/ASX 300 Accumulation Index by one per cent. Despite these short-term struggles, the fund has outperformed by 1.57 percentage points annually since its inception in 1997. Ausbil Chief Investment Officer and Head of Equities Paul Xiradis acknowledged the tough market conditions, noting that many firms have underperformed considerably, comparing Ausbil’s results favourably against some peers like Platypus and Bennelong, which recorded more significant declines.
In response to market dynamics, Xiradis has implemented strategic adjustments to the flagship fund. He is underweight the banks, including no exposure to Westpac, while being overweight resource companies. Additionally, the fund has increased its holdings in technology stocks such as Life360, Block, Xero, WiseTech Global, REA Group, and Carsales.com.au, believing they were indiscriminately sold off amidst broader market fears. In the small-cap space, Ausbil is bullish on electrical contractor GenusPlus, having topped up its stake in July.
Regarding the recent talent shifts, Xiradis conveyed confidence in the firm’s continuity. He stated that Arden Jennings and Beyhan Irmako are now overseeing Ausbil’s small and micro-cap funds, having been with the team longer than the departing managers. A new individual has also been poached from a rival firm to join the research team, with plans for further expansion in the micro-cap segment. Xiradis affirmed, “We’re not concerned about it all. We’ve got a strong team and strong continuity.”
