Warwick Negus: one-man boutique incubator

The chief executive of Colonial First State Global Asset Management, Warwick Negus, has made a private investment of $10 million in a Sydney-based global equities boutique.

His investment will help commercialise Falkiner Global Investments, which former UBS Warburg sell-side analyst James Falkiner established in April 2004. Falkiner became friends with Negus in the 1990s, when he provided research to him during Negus’ tenure at Goldman Sachs Asset Management. After a short spell consulting to PM Capital in 2003, Falkiner developed the idea that he, too, could establish a Sydney-based business in global equities, parlaying his sell-side experience into a concentrated, bottom-up, long/short process which could be well-received by a retail market where PM and Platinum were virtually the only other local choices. In the exactly three years since inception, Falkiner’s fund has returned a net 15.2 per cent against 9.2 per cent for the MSCI. Falkiner said his process was “;similar to a 130:30 fund”; with a high potential for alpha, which he said justified the fee structure of a 1 per cent base plus 20 per cent of performance above zero, with a high watermark. Negus will become a non-executive director of Falkiner Global Investments, along with Grant Samuel investment banker Malcolm McComas. Falkiner will be dual CIO/CEO and wants to retain sole responsibility for portfolio management, but some extra working capital provided by Negus will allow a couple of analysts to be hired next year. Negus has pledged to double his private investment at some point in the future, once he is satisfied the new-look business is operating well. As Falkiner seeks retail distribution, he knows not to expect any inside running at Negus’ employer, which in Colonial FirstChoice boasts one of the nation’s largest conduits to the mum-and-dad market. “;That decision will have nothing to do with me,”; Negus said.