Guns, butter and Axa While the origin of the phrase “guns and butter” is debated, the most notorious use of it was in Hermann Goring’s 1936 speech in which he said “guns will make us powerful; butter will only make us fat”. Fast-forward to AXA Framlington’s briefing last month, during which global portfolio manager Mark Tinker skated over the phrase on one of his PowerPoints at a media breakfast. Despite the early hour, one member of the Fouth Estate couldn’t help but hum Guns N’ Roses’ Sweet Child. Tinker was just itching to explain guns-and-butter as an investment theme “I was waiting for someone to notice that,” he smiled. “The expression was originally coined to describe a production frontier, how a government should choose between allocating between defence and civilian goods. “It evolved to suggest that the two were mutually exclusive, that an economy could not accommodate high levels of expenditure on defence and on luxury consumer goods,” he explained. Segué to AXA’s search for thematic drivers of sustainable return: household, corporate, government and financial sectors. “Defence was potentially a thematic driver across most regions as government expenditure continued to provide a stable and sustainable sales line in that sector,” he said. “Meanwhile, luxury goods were a non-cyclical and stable area of consumer demand as well. “Intriguingly, we realised that a number of companies – General Dynamics being perhaps the most obvious one – were in a position to benefit from both expenditure on guns [fighter jets] and butter [luxury jets].” Fidelity Investments might be as ‘American’ as an American manager gets.
Super is ‘no place for an entrepreneur’: Dunstan The era of the entrepreneur in superannuation software is over, Bravura Solutions founder and recently departed CEO, Iain Dunstan, said from his home last month. One month after leaving – by mutual agreement, as they say in the classics – Dunstan reflected that in six years he took Bravura from zip to $140 million annual turnover, but would never be able to do the same thing today. “Everyone’s about margins and cost control, you hardly see a decent software sale any more. What’s making it worse at the moment is you’ve got all this M&A – until AMP, AXA, and NAB figure out who’s going to own what, everything grinds to a halt.” Dunstan said his skills lay in business building, while the remaining CEO at Bravura, his co-founder and mate Simon Woodfull, “is the guy that makes the money…Bravura is a maturing business, plus now it’s got the private equity guys [33 per cent owners Ironbridge Capital] utilising some of the same skills I have in terms of growth…for me it’s just not what it was, back when we were doing a new sale every couple of weeks. ” Entrusting Woodfull with the 10 per cent interest he retains in Bravura, Dunstan has shifted his entrepreneurial attentions to an industry where he senses more action – he’s been retained to grow a business in the mining services game.