Paradice’s key to unlocking small caps

Matthew Kidman

Centennial Asset Management

David Paradice loves businesses. From chatting to the owner of a bike shop in Byron Bay to discussing the KPIs of his local IGA, Paradice truly believes that everyone has an area of expertise and is always looking to learn. 

An Australian Fund Manager Hall of Fame inductee, he launched Paradice Investment Management aged 40, having earned his stripes spearheading the small-cap divisions at ING Group and Mercantile Mutual. A suite of achievements soon followed. 

With a laser-like focus on returns and an unrelenting commitment to self-improvement, Paradice grew a multi-dimensional and thriving investment firm that shows no signs of slowing. 

Passion is at the core of every action he takes, and, despite stepping down from managing the funds directly, he is as committed as ever. When reflecting on his success, Paradice highlighted a key framework for identifying winners:

“Multiple expansion and earnings growth - if you achieve that combination, which you do in smalls, you get massive leverage on your investment ... this creates huge wins and massive value"

In this episode of the Success and More Interesting Stuff podcast, I talk to Paradice about his legendary intensity when it comes to getting the job done, the crucial lessons learnt through his journey in funds management, and even how he once enjoyed a laugh with the Queen of England. 

Time stamps:

  • 2:39 - Origins of Paradice Investment Management 
  • 8:47 - Extreme work ethic and passion for learning
  • 17:57 - David's appreciation for intensity
  • 21:15 - Structure of the business and culture of focus
  • 26:06 - The Paradice charm
  • 30:35- Where is the future growth trajectory?
  • 33:30 - The influence of family, education and early career
  • 39:38 - Entrance into funds management and development of investment theses
  • 50:01 - Do successful investors need a particular temperament?
  • 52:51 - GARP: Growth At a Reasonable Price
  • 55:41 - Significance of the macro environment on worldwide debt
  • 58:30 - The threat of passive investment in the funds management industry
  • 1:01:00 - Can young people make their mark on the industry?
  • 1:02:50 - David reflects on his career

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This material has been prepared by Paradice Investment Management Pty Ltd (ABN 64 090 148 619, AFSL No. 224158) (“Paradice”). This material (or any contribution to it) is not intended to constitute advertising or advice (including legal, tax or investment advice or security recommendation) of any kind. It is of a general nature only and was current only at the time of initial publication. It has been prepared or provided on the understanding that Paradice is not providing professional advice on a particular matter. The information and opinions contained herein are not necessarily all-inclusive and, as such, no representation or warranty, express or implied, is made as to the accuracy, completeness or reasonableness of any assumption contained herein and no responsibility arising for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Paradice, its officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Before relying on the material or making any decision in relation to the funds, you should consider your needs and objectives, consult with a licensed financial adviser and obtain a copy of the relevant product disclosure statement, which is available by visiting Past performance is not a reliable indicator of future performance. The value of an investment in the funds may rise or fall. Returns are not guaranteed by any person.

1 contributor mentioned

Matthew Kidman
Principal and Portfolio Manager
Centennial Asset Management

Matthew is the Principal and Portfolio Manager at Centennial Asset Management. Prior to this, Matthew was the CIO at Wilson Asset Management between 1998 and 2011, achieving 18% p.a. over the period.

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