Kerr Neilson

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Kerr Neilson
Born (1949-10-17) 17 October 1949 (age 74)
Johannesburg, South Africa
Nationality
  • Australian
  • South African
Alma materUniversity of Cape Town
OccupationInvestment 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]

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:

  • 1984 – 1993, BT Select Markets Fund, +22.7% p.a.;[15]
  • 1994 – MLC Platinum Global Fund, +19.2% absolute 6 months return, used as the proxy for the entire year;[16]
  • 1995 – 2015, Platinum International Fund, +14.2% p.a.;[17] and
  • 2016 – 2023, Family Office, Argyle Fund, +17.5% p.a [18]

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:

  • Those that improve accessibility to the arts, with the aim of enriching cultural diversity within Australian society; and
  • Those organisations that assist individuals and communities facing extreme disadvantage. Programmes that help vulnerable youth, migrants, domestic violence, or those with mental health problems.

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]

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. ^ a b c "Forbes profile: Kerr Neilson". Forbes. n.d. Retrieved 15 February 2023.
  5. ^ a b c d "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. ^ a b c d "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. ^ a b "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.

External links

Retrieved from "https://mdwiki.org/wiki/Kerr_Neilson"