Doug Tynan says AI fear has created the most favourable time to deploy capital

The AI narrative is one investors have heard repeatedly in recent years. Fears that AI will disrupt established business models, alongside growing debate about whether expectations have run too far ahead of reality, have dominated market commentary.

Doug Tynan, Chief Investment Officer at GCQ Funds, takes a different view. Rather than seeing AI as a threat, he sees the current anxiety as a capital deployment opportunity

“The market is generally worried that AI will impact many of our favourite business models… We think this narrative is overblown… We have not seen such a favourable backdrop to deploy fresh capital in many years.”

With close to two decades in funds management, including time building and running global strategies, Doug brings a well-tested perspective to today’s market debates.

This week’s Q&A explores how AI-driven fear is reshaping sentiment, valuations, and opportunity. AI isn’t just a technology story, it’s a behavioural one. And behaviour is creating opportunity. 

What’s your most recent investment and why?

Our most recent investment is in Swiss Marketplace Group (SWX: SMG), which is the realestate.com.au and carsales.com.au of Switzerland. 

We have been following the company for many years, but SMG only recently IPO’d. 

We had the opportunity to make it a meaningful position after the stock subsequently fell almost -40% after listing, on the back of concerns related to adverse regulation, which has since been resolved, and fears of AI disruption. 

SMG’s dominant auto and property portals are significantly under-monetised relative to global peers, and we think there is a long runway of double-digit growth ahead.

Which investment did you add to your watchlist this week?

We only have 221 companies on our watchlist, which doesn’t change much week-to-week, given we have a very high bar for inclusion in our investable universe. Our watchlist includes the developed world’s highest-quality monopolies, oligopolies, and irreplaceable brands – which are hard to find! 

At the moment, we’re particularly interested in the enterprise software industry after the recent sell-off. 

It should come as no surprise that we like the industry’s growth, predictable cash flows, and high returns on capital, although there are currently question marks about whether disruption by AI-native software companies and “vibe coding” (where users describe functionality in plain English and AI generates the code, enabling non-technical users to build apps) will erode the industry’s favourable economics. 

Every so often, we’ll find that one of our 20 industries is out-of-favour, which creates opportunities for long-term investors.

What is the most recent investment you have trimmed or sold and what drove this decision?

We recently trimmed our position in LVMH (EPA: MC), after it staged a nice rebound from its lows in mid-2025. We built our position last year when sentiment towards luxury goods was extremely bearish on the back of macroeconomic concerns in China, a key driver of industry growth. Sentiment began to turn shortly after we made our investment, as the market became more optimistic about a return to growth in China. The stock has traded well, and we trimmed the position in recent weeks. 

The super-luxury industry has been a staple in our portfolio since our fund’s inception. There are only a few listed super-luxury goods companies that own irreplaceable brands with over 100 years of heritage. 

We are attracted to the high barriers to entry, favourable industry economics, and pricing power. 

It is surprising to some that demand for goods like handbags, bracelets, and watches are highly resilient through cycles, but this is because brands like Hermès, Cartier, and Van Cleef & Arpels cater to the world’s wealthiest clientele. 

What’s your favourite chart or data point from this week?

We like to update our clients on the forward earnings multiple of the GCQ Portfolio, because it can provide good buying opportunities when the portfolio – which includes a collection of monopolies, oligopolies and irreplaceable brands – is trading at a discounted price. 

We think the below chart is interesting because while the overall market is trading at all time high valuations, our portfolio of high-quality companies is trading at a very attractive valuation, particularly given we expect the portfolio to grow free cash flow at +17% p.a. over the next five years, and our companies have high margins, generate high returns on capital, and have little to no net debt.

What was your weekly high – a standout market moment or highlight?

Even within quality companies, some sectors are creating opportunities for us. The market is generally worried that AI will impact many of our favourite business models, from monopoly online classifieds assets to enterprise software. 

We think this narrative is overblown, given dominant online classifieds businesses benefit from a high proportion of direct traffic, making disintermediation by AI agents unlikely, while several enterprise software companies that serve as a system of record are unlikely to be supplanted by vibe coding. 

We have not seen such a favourable backdrop to deploy fresh capital in many years.

What was your weekly low – a market disappointment or challenge?

One of our investments in the online classifieds industry, Hemnet (STO: HEM) – Sweden’s dominant property portal – has faced sustained selling pressure in recent months, and more recently saw its share price fall on worries that it will face a new upstart competitor. We have seen this movie before, but it always ignites new fears that this time is different. It rarely is. That said, Hemnet is Sweden’s only listed online classifieds company, so the local share market is less mature when evaluating competitive threats, often shooting first and asking questions later. We continue to focus on the fundamentals, which have been strong, and we expect the share price to follow the earnings over time.

What first drew you to markets and what continues to keep you inspired today?

I was an unusual teenager… and I knew I wanted to be a global investor in my early years. I came from a family of financial planners and advisers in Brisbane, and I spent my teenage years learning about Warren Buffett and Charlie Munger. I fell in love with investing, particularly with the style of Charlie Munger’s philosophy of buying wonderful businesses. 

I love investing in monopolies and irreplaceable brands. Over the years, I have found that complexity kills great investments – and often the best investments are right in front of you. 

Investing is a full-contact sport, and is best done as a team. Our investment team has worked together for many years now, and we continue to evolve and get better.

What’s one piece of advice you’d give to new investors?

New investors should read widely; it’s the only way to get better. Charlie Munger used to say that the best investors are learning machines.

How do you unwind when you’re not thinking about the market?

I am always thinking about the market, but I enjoy a change of scenery! I love spending time with my wife and three boys at our place on the Gold Coast.

Rapid fire! 🔥

Favourite investing book?

Poor Charlie’s Almanac

Favourite investing or finance/markets-related podcast?

Joe Aston’s Rampart Talks

The first thing you read each morning?

Bloomberg

Favourite restaurant?

Margaret in Double Bay

Something people are surprised to learn about you?

I signed up to be an Uber driver, which was valuable on-the-ground research for our investment in Uber!

Think there’s a better pick? Prove it. Share your rapid-fire book, podcast, and daily read in the comments.