Leo Barry’s unlikely journey from football to funds management

Leo Barry took a historic mark that helped secure the Sydney Swans’ first grand final victory in 72 years, back in 2005. And since retiring from the game, he’s been kicking goals in the world of broking and funds management.

A late bloomer in the corporate world, Barry’s life after football started in 2009 when he was 33 years old. And though there are some stark differences between the two arenas, his grounding in professional sport was helpful.

“There’s definitely a scoreboard and it’s (funds management) always very competitive,” Barry tells Centennial Asset Management’s Matthew Kidman in a recent interview on Livewire’s Success and More Interesting Stuff podcast.

“Nothing can really prepare you for life after sport, it’s damn hard. I jumped into the fire and prepared myself as well as I could.”

Hitting the books

Barry's preparation for life after football started years earlier, when he was always keenly aware an injury or period of underperformance could end his playing career in an instant.

Fortunately, a high school sports scholarship to Sydney’s Riverview College, where he achieved decent academic results, set him up for success after his playing career. He also obtained a degree in sports science after school. And later completed an MBA at the Australian Graduate School of Management.

Barry recalls this busy period where he trained with the Swans in the morning, slept in the afternoon and studied at night. During this time, he completed a series of work placements in the offices of the Swans’ major sponsor, Citi.

And from here, after retiring, he progressed into a full-time finance role with Merrill Lynch - joining the lauded US institution as a broker just as the global financial crisis was winding down.

“Going into a big investment bank, there’s no detailed induction program as there is at a club like the Swans,” says Barry, recalling it as a sink-or-swim experience.

In this case, he was handed a list of contacts and promptly hit the phones, in many cases cold-calling potential clients in his role with the investment bank. During his five years with Merrill’s, Barry gravitated toward the small-cap end of the market and was ultimately helping run the firm’s Australian equities team.

Having started out covering the broader market, he soon specialised in small-caps, enjoying the sector’s dynamism and the potential to capitalise from the dearth of research coverage.

“I identified a bit of a void in the market, finding some undiscovered gems that had no other brokerage cover. And of course, I was helped along in this by others in the industry,” Barry says.

This interest led him to swap the sell-side for the buy-side, joining boutique small-cap manager Fairview Equity Partners as a senior investment manager in 2015. In this role, he manages a portfolio of companies across a broad range of industries - resources, healthcare, technology and industrials.

What type of investor is Leo Barry?

The Fairview Equity Partners Emerging Companies Fund holds between 50 and 60 companies, with a market cap of around $500 million.

These companies are also diversified in their size, ranging from those trading on 100 times PE multiples, 6 times PE, and others that aren’t yet generating profit.

“All our stocks have catalysts to either de-rate or re-rate. And there are others that are underappreciated in the market,” says Barry.

“The key is finding new ideas constantly, our team adds 20 to 25 new stocks each year, so it’s a portfolio that turns over rapidly.”

The fund pursues a blended strategy that covers both Growth and Value companies. And Barry wears out plenty of shoe leather in the process of finding new ideas, with an estimated 500 to 600 company meetings each year.

Formative experiences...

Along the way, Barry concedes he’s made mistakes - something he was afraid of doing in the early stages of his football career – but which have taught him valuable lessons. And he recalls 2016 - a particularly challenging year for the Fair view fund – as one of the most important in this regard.

“It was a tough year for the fund. That’s moulded the way I invest now, from being very growth-oriented earlier.”

...and a multi-bagger

But one of the best calls of his investment career was buying the geospatial and aerial mapping company Nearmap (ASX: NEA). The fund first bought the stock when it was trading at 60 cents, exiting at around $4.50.

“If we had held the stock much longer, it would have been about 17% of the fund. You’ve always got to be mindful of risk and positioning, with our largest position capped at around 5% (of the total fund),” Barry says.

The fund increased its exposure to other ASX technology names in the back-end of 2022, including Wisetech Global (ASX: WTC)  and Technology One (ASX: TNE).

What's next?

Just as a successful sports team needs to keep training and honing its skills, even during the offseason, Barry and the team at Fairview Equity Partners continue to work at finding new opportunities. 

As he mentioned earlier, finding upwards of 25 new small-cap ideas each year takes ongoing commitment and drive. His competitive spirit and desire to win is as strong now as ever, something Barry believes is critical to success in finance. 

"If you don’t like winning, what’s the incentive to get out of bed and go to work every day? It’s something that’s always driven me and will be until the day I die.”