He joined Capel Court as its economist in 1988. In 1990 he joined the equities team at Bankers Trust as its quantitative strategist. The firm’s reputation had been bolstered by taking out option protection before the 1987 stock market crash. It never used its balance sheet to lend to people such as Alan Bond and Christopher Skase.

Dougherty says people at BT such as David Anstey were brilliant and understood risk.

But BT had gotten arrogant on the back of its success.

When Dougherty suggested that BT move some of its funds to passive investment managers or to outside managers, he was considered a heretic.

In 1996 he joined AMP to work on those very multi-portfolio strategies. In 1998 Dougherty joined Merrill Lynch.

During the height of the tech bubble, Dougherty wrote a one-page research note that even today investors pull out of their files to show him. Written on a plane, it was titled “Video Killed a Radio Star.”

In it Dougherty argued that internet companies whose stock prices were soaring were not as good as companies with actual cash flows and thus would fail.

At Merrill Lynch he worked under Chuck Clough, chief investment strategist at the New York-based firm.

Clough proved to be a staunch ally of his Australian colleague. They thought and acted alike.

Asked by Merrill Lynch management to write a research piece extolling internet companies, Clough refused. The report was later written by a group outside investment strategy and was featured on a BBC TV investigative program about the excesses of the internet stock bubble and Wall Street analysts who encouraged investments in such shares.

In 2000 Dougherty joined Credit Suisse. At one stage he found he had spent as much time outside Australia as he had in his homeland. It took its toll.

Retrenched from Zurich-based Credit Suisse in 2002 as the company slashed its head count, Dougherty spent a couple of years at his alma mater teaching postgraduate students and consulting.

In 2004 he joined Intech as chief investment officer. When the business was sold in 2007 he moved to investment consultants Towers Watson, where he heads manager research and is a senior consultant to large institutional investors.

Had he ever thought of setting up his own firm or does he hanker to become a CIO again?

“I have not met a sufficient number of people who think alike and whom I respect that would make me seriously consider co-founding an investment firm,” says Dougherty.

“CIO roles have far more people with their fingers in the pie than you can imagine,” he says. “Power is illusory. Just ask Kevin Rudd.”

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