Peter Morgan was sitting all alone to one side of a lecture hall at Melbourne Business School. He had just spent two days on Bells Beach and his skin was a dark brown that contrasted strikingly with his sun-and-salt bleached blond hair.

When it came time for Morgan to address an audience of finance and business executives, he made his way self-consciously to the front of the room and squirmed in his seat as he was described as a “market animal.”

He began his speech by describing how he joined Perpetual in 1990 as a 29 year old. Morgan was paid $50,000 a year, had no prospect of a bonus and did his own research.

Company directors and chief executives were almost always male when Morgan started at Perpetual.

“Boards were very closed shops,” says Morgan at the Ownership Matters April 3 conference. “Many boards are still inbred.”

When he set up his own firm, 452 Capital, Morgan recalls with pride that nine out of 11 employees were women.

In a meeting at 452’s offices he was asked by a someone not working at the firm why he employed so many women.

“That guy was lucky he made it out of the room,” says Morgan. “I employ people on merit.”

As a boy he loved competitive sports and sees the stock market as similar to the competitive sports field.

“I liked the relentlessness of markets judging your performance,” says Morgan.

But performance has now become an obsession both among asset managers and company chief executives.

Morgan more than once visited CEOs whose eyes would be drawn to the computer screen on their desk during the course of a meeting. The CEOs were checking their company’s stock price.

“That’s ridiculous,” says Morgan.

He says some of the best fund managers are “quirky and eccentric.”

“Investing is an art. I love that,” says Morgan.

He says he sought to invest in “undervalued companies whose prices were going to rise.” The best investment the non-smoker ever made was in tobacco company Rothmans, which was later acquired by British American Tobacco.

Morgan, questioned on the ethics of investing, brushes such concerns aside.

“People have given me money to invest in the share market,” he says. “All I’m trying to do is what I’m contracted to do.”

Yet Morgan says: “Over the longer term greed catches up with itself.”

Morgan questions where the next generation of great Australian companies are going to come from.

Without being explicit as to whether he was talking about asset management or corporate governance in Australia, Morgan says: “the industry makes me sick.”

Leave a comment