Paradice’s key to unlocking small caps
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?
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1:02:50 - David reflects on his career
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