Building boats is somewhat of a tradition in the Steele family. Rick Steele, the chief executive of Eight Investment Partners, and his brother made sailing dinghies growing up on the banks of Tasmania’s Tamar River. Their father constructed a boat out of Celery Top Pine.
Now Rick Steele wants to build an asset management firm centred on investing in Asia. It won’t be a ship but a vessel with a crew of 30 at most.
“The last thing we want to be is an ocean liner as they can’t change direction easily,” says Steele, in a room that offers views of ferries and motor boats cruising Sydney harbour. “Twenty to 30 people can run a lot of money very successfully.”
Founded in 2009 with the backing of South Africa’s financial services group Sanlam, Eight Investment Partners began investing money in 2010 but already has seven funds. Some are registered in the US and Ireland as the firm believes North America and Europe offer the largest pool of investment money.
The Sydney-based firm manages $256 million and contracts outs it legal, custodian and administration needs to others.
About half of Eight Investment Partners’ employees are of Asian extraction including a five person research team in Bangalore that analyses industries. It has an office in Hong Kong that Steele hopes will be able to concentrate on company-specific research.
Steele has been working around markets since 1976 when he left the University of Tasmania for Canberra and a job in the Treasury department. He helped open the investment bank Morgan Grenfell’s Australian office and worked at BT. In 2009 Steele and two others were running a hedge fund when he was asked if he was interested in running an Asian-focused asset manager.
“It took one conversation,” says Steele. The hedge fund returned its money to investors and Steele began working on Eight Investment Partners.
“A boutique must have the capital or a backer that has enough resources to deal with any situation,” he says.
Steele also says the role of chief investment officer, Eight Investment Partners has Perennial Investment Partners co-founder Kerry Series, is critical for a fund management start up.
“You’ve got to have someone you can build a business around. He will attract people and build a firm accordingly,” says Steele.
How does Eight Investment Partners know the people it recruits have the “right stuff” for asset management?
“You don’t know if someone has it,” says Steele. “If you have the right environment where people can make unfettered decisions on their best judgment then you probably can assess whether they have got it or not. I make sure they can get on and do their job, that they utilize their investment skills without my influence.”
