[00:00:00] Adrian, thank you so much for being here. This is a pleasure for me and I'm thrilled to invite podcast listeners in on this conversations because we're new friends. So I don't know a lot about your backstory and I can't wait to learn more. So welcome to the studio. Thanks so much, Stacey. It's great to be here today.
Same. Great to have you. Okay. So I mentioned backstory and look, backstory Backstory before the backstory, you and I became friends on LinkedIn, um, mostly because I was like, is this asset manager posting pictures from a plane that he's flying around? And that just goes to show you, right? People connect with people.
So let's. We're going to get to the plain, the plain stuff, but, but tell us about your journey to asset management. I know bits and pieces of it. Um, and you can go back as far as you'd like. I think [00:01:00] some of the magic sometimes is like, did you always know you wanted to be in the investment world? Was your family in that space?
Like, kind of take us through. Well, so firstly, I've got a South African accent, so I hope people can understand that, but my history is a farm boy come from a farm. Um, my expectations in my future for my future was to really be a vet, a flying vet, an aviation vet, or, um, a military pilot. And, um, I think the connection with the market.
It was my father ran an NGO, um, a non profit organization, and he capitalized that entire business in the 1980s trading gold, um, to create his dream. So he built the balance sheet for that business with his own money. Um using the opportunities in the market in the late 70s early 80s when gold spiked at that spot at that point So I have a kind of a natural connection with the market [00:02:00] So you so but your vision growing up is i'm going to be i'm going to be in planes like all day long Not just once in a while And so did you pursue that or how did that how did you land in the investment world?
Yeah, later on. I mean, there wasn't an option opportunity in South Africa. South Africa was changing dramatically at that point, and we can talk to that to become a vet or pilot that stage. I mean, what I had was my education and my drive, certainly not the capital capital to go chase those kind of careers.
And I went to normal university in Cape Town and followed my whole career has been basically a business finance background. And, um, I later went back into aviation because I think if you've got a dream, you've got to meet it. And, um, but you know, you only can do that if you, I suppose if you accomplish a few things along the way.
So, okay. That, I love that. What a great quote. How did you, so you, you, you take the business path, [00:03:00] you get into the investment world. Talk a little bit about that. I mean, I'm assuming it was, I'm assuming, but I, I could be very wrong. It was someone of a traditional path, like analyst and work your way up. Is that accurate?
That's accurate. Yeah, so it's not too different to that. I mean, I think my story is quite an interesting one because um, I I felt I should be in the investment industry. It was very difficult to get in in south africa at that time. We had We had affirmative action policies, which were Addressing the evils of the past of this country and um at that moment literally I was coming out of university So I was certainly not the right the right type of person to to land a job easily So what I did is something completely bizarre I sent a million Ran check to the CEO of one of the Cape Town based asset managers.
And I said, just give me a chance for an interview. Maybe that's what I'll be worth to your business over time. And, uh, I know that's pretentious, but you know, you've got to be outrageous when you're young to, to get an opportunity. So I did that [00:04:00] and, um, he gave me an opportunity. There were a lot of people, um, trying to get into the firm at that time.
And believe it or not, I didn't make it in. Um, I was actually. I was actually came second in the interview process. And the day that the new recruit was supposed to pitch up at work, she decided to go to a competitor. And, uh, the, the, the manager phoned me up and said, listen, I've got news for you, your second best, but we're taking you.
And, um, and he said on two criteria, one is you prove yourself. And the second is you deliver as much luck to this firm as you've, as you've had yourself. So that was my entry. Wow. Let's pause there. What a story. And I know you said pretentious. I don't find that to be pretentious at all. I find it to be really creative.
Look, at that moment in time, you had to, you had to [00:05:00] do something different. You had to. Yes. And, um, and that applies equally these days. You know, young people trying to get into the industry, you've got to make a mark somehow. Um, you know, when we, when we, Provide opportunities. You get 600 applicants per role.
You know, you have to sit through those. It's difficult to decide who to choose. So it wasn't too different in 1995 when I first put my foot into this industry. Do you, do you extend that same, so now you're on the other side of the table? Right? Because you're the one doing the interview, interviewing. Do you, do you see those moments of creativity with people and do they, do they stand out to you?
Do they jump to the top of the pile? Look, I've never seen someone do that, but what I do do, you know, I've never seen someone do that to us, but we have, you know, we [00:06:00] have many advances that we've made. from young people and a lot of them are through LinkedIn and I make a point and I can't do it with everyone of trying to address many of those engagements with me in a personal way.
Um, either we don't, we don't have an opportunity or we do and follow this route to, to try and go through. Um, you know, get into the firm. So I'd make a point of trying my very best to be personable and ease easy on those that are struggling to get in. Yeah. 'cause you've been there. Absolutely. Know all about it.
Know all about it. So, you and I had, I had it quite easy. Yeah. I get in. Please continue. Um, mm-Hmm? . Yeah. I got in. I, you know, I say to many young people today, I, I didn't ask for much. Um, I just focused, I turned the lights on in the morning and I turned the lights off at night. That was my approach and, um, you know, I studied, continued to study [00:07:00] finance, um, applied myself day in and day out.
And then, uh, four years after joining, I moved my way through the ranks and the company launched its first collective investment scheme or mutual fund, which I ended up managing and that did extremely well and it put me on the map. That's how I started really. Simple as that. A lot of luck, hard work. It's a good recipe right there.
What type of strategy was that? And do you still run that type of strategy today? Yeah, that's a good question. So it was a multi asset strategy. Um, I laugh when I think back at, you know, how simple we were in the way we did it those days versus the complexity and the level of sophistication. I compare North Star to what I did as a one man show plus a few people around me.
Now we've got a Large research team, specialized skills in different asset classes. And to answer your question, 25 years later, I still am connected to the same mandate, [00:08:00] albeit that I run other mandates more, more global these days, but we do run the same mandates. I'm very privileged. Was that the South African strategy?
It was it has a offshore component to it. So our whole business has changed and we've redirected the business many years ago to, um, to more offshore focused business. We, and we can talk through that podcast, but, but yes, I'm still connected to the same strategy and it's an absolute privilege. Gosh, that is, that's legacy right there.
So how do you go from, so how did you join Northstar? What's that story? Yeah, so that story is, um, relatively tragic to be quite frank. Um, so I, I, I worked in the industry. Um, I decided the firm that I first started for was, uh, with was bought out and I didn't want to work for anyone. So I decided I would at that point want to launch my own, my own, um, boutique that was in, [00:09:00] um, And, um, I launched my own boutique and it was an extremely successful boutique, which was later bought out by, um, one of South Africa's largest financial services companies and rebranded and became, um, One of our largest asset managers here in South Africa today, um, and I headed up that boutique, uh, well, that manager at that point, because it had grown out of a boutique phase, um, and for two years.
And then I kind of thought I felt the need to be back on the ground. And I started having discussions with someone that ran a small boutique. And I thought I would join him in the next 10 years at some point, which actually was 2012 when I had those discussions with him. When our firm was bought out by the large, uh, 2010, it was bought out.
And I had those discussions with him in 2012, and he was tragically murdered in South Africa, which, which is a common problem in the country. [00:10:00] And, uh, it was a random burglary. And he was murdered. So I did the craziest thing ever. I left top job at a great firm and went to a one man show, which I wouldn't advocate is the best idea to follow because it's asymmetrical risk, but I did it.
And, um, and now we look back now it's 2024 and North Star's got 25 staff members, a decent sized asset base, multiple products. And very successful. So I'd say, again, a bit of luck there, but, um, yeah, it was a, it was a journey, unexpected, relatively tragic, but I honored, um, a discussion I had with a friend.
And just unfortunately, that's, that was his part. So, yeah, the North Star today is a very different North Star to what I joined in 2012.
Thank you for [00:11:00] sharing that. I'm sure that's still, I mean, that was a number of years ago, but I'm still there for something that tragic and that big that that has a lot of emotion wrapped around it. Um, and what I think really resonates for me and you, you kind of summarized it there, which is, that's not a decision you make from your brain.
That's a decision you make from your heart, um, because you knew, you knew how hard it was to build a boutique. You'd already done it. And maybe that's kind of, it was a blessing and a curse in some ways. You knew what you were getting into, you knew how hard it was going to be, but you also knew you could make it work.
So I, I made the first one work and obviously it's not just me, it was many people around me. Yeah. It's a team, team effort to get these things to work. But South Africa has 1, 500 collective investment schemes, um, call them unit trusts. When I got into the industry, there were 75. We have [00:12:00] 500, we have 500 investment managers.
And we have an industry of approximately just short of 300 billion dollars of capital compared to 375 trillion globally. So, you know, it's, we're effectively, you know, we're pinprick and we've got heightened competition and exceptionally good asset managers. So to try and make a business grow in South Africa, um, it's a tough challenge.
So I think, you know, uh, I'm completely. Uh, in favor of people going it alone and building their businesses, but they need to be pragmatic and understand the challenges, you know, and Buffett, you know, famously said, you know, you have a great management team targeting a specific industry and if that industry is bad, it's the industry that wins, not the management team.
So, you know, um, and, and I think that's very applicable in investment management today. It's a, I think it's tougher than ever to launch a new boutique right now, South Africa [00:13:00] and maybe everywhere. Maybe everywhere because I think the dynamic it's the dynamic is it's always to your point. It's always been Um tougher the odds have always been stacked against boutiques, but the bigs keep getting bigger And you know that that dynamic makes it more and more challenging.
I'd love to stay with this um And just kind of unpack a little bit some of those lessons you learned you mentioned team being Incredibly important to building but you obviously built that successful boutique round one And and exited and then you you're you know, you're doing it again now at north star What what lessons did you learn?
in the first boutique that you That you took with you and maybe did a little bit differently or knew you had to do again in the second Run at north star. So I think that's the key pillars to success and I know these are [00:14:00] soft But they're important and then we'll get to the more practical ones. The key pillars are honesty and integrity.
honesty and integrity and then competence So honesty and competence and both have their own particular focal points and factors that you need to address. But hopefully, honesty comes naturally and competence is something you build over time. but I think those things are underlying requirements if you want to be successful in this industry, because you're gonna be found out if you're not then just in terms of practical requirements to make a success.
And I think this is where a lot of people actually fail in our industry. It's actually a relatively simple business model. There are only three parts to it. The first is operational excellence. And you can only blame yourself if you don't get that right. So that's effectively how a client engages you. Um, what they experience, uh, the response times, uh, the efficiencies, the statements you send to them.
It's just, to me, it's an [00:15:00] unforgivable sin to make an error in that part of a business like this because the rest is hard enough. So that's the part you can control. And then the second leg of course is in your investment management skills. So there it takes time. Um, and you've got to build, um, Good teams, specialized teams.
I think increasingly you've got to have the scale to build specialization. So fixed income specialization in South Africa, domestic equity or emerging market equities and global equities. And, um, and then the last part, and I think we, people make a big mistake is the distribution marketing component of these businesses.
So there are three legs, you need all of them. Um, and then I'll get onto the distribution last, but just getting back to the investment management side. Then what I've learned is. And probably failed at times at this and hopefully at Northstar we're getting it right is, um, there's a, there's a, there's a, friction between the two components of investment management.
The one is structure and rigor [00:16:00] and risk management that you can manage and control. The other one is the need for risk taking, and you need to find the right people in your team that are risk takers, and you need to juxtapose those against risk managers and, good teams have both of those components.
You get mediocrity with just one of either, or you get extreme risk with just having risk takers. So I think those are kind of some of the things that when someone's thinking of a boutique, you know, just to keep in mind. The risk. takers versus risk managers is very interesting. And I think those three, first of all, the three pillars are, are so spot on, but the risk takers, risk managers, I have a clarifying question because for someone in the biz, you might think, okay, so have a great compliance department and a good, you know, a good CCO and a strong portfolio management team.
But my [00:17:00] gut tells me you mean something slightly different. So my question is, On a portfolio management team, like in the investment group that's running these strategies, are you saying you need both of those mindsets happening simultaneously? I'm referring very specifically to the investment team. Yeah.
The compliance and that is part of the operational excellence. So within your investment team, so us as asset managers, we have a, a default direction to you. Omniscience. So we kind of think that we are capable of making decisions beyond the norm. And what you see in boutiques constantly, and there's so many examples here, is that they blow up.
So they have big tracking error, extremely high levels of success. Clients come in and then they, those clients get enormously disappointed as a manager starts to believe his own pudding, you know, and, and, and, and he blows the business up. So, um, I think what [00:18:00] you need in this industry is structure and rigor around, um, a centralized system that prevents excessive risk taking.
And everyone needs to understand that. And then you need the flare to come into that centralized system as a gains to operate outside it and blow your portfolios up. So you want to direct all your energy. So in our case, we have one buy list. Everyone works on it. No dominance team based and then that by list with various forms of optimizers drive the weightings across portfolios very successfully so energy goes into a Single by list as against one manager thinking you should buy one stock and and or take one view on the world And another manager taking a completely opposite view.
That centralized research is really powerful because when you talk to clients, you're basically talking about one thing. This is our philosophy. This is how we think [00:19:00] about the world. And this is how we slice and dice. That philosophy and process into various portfolios. And I think that helps the investor really understand you as a team, as a firm and your differentiators, how it's expressed in a portfolio is, is kind of not the thing, right?
It's, it's the outcome. Yeah, absolutely. So it gets expressed in a portfolio in a very consistent manner because we focusing on a specific process, uh, and, and, uh, and preventing. The wrong outcomes, you know, I just want to talk to say, you don't want to sound too negative about starting a boutique, but yeah, because there's always, there's always an opportunity.
So in South Africa, and I can just talk to the South African world, you know, having been here 12 years, you know, the first decision I made when I came here was to launch an offshore business. And 12 years ago, none of the boutiques were focused on offshore businesses. So they, they were predominantly SA focused and 65 percent of the asset [00:20:00] base in South Africa remains within South Africa and focused on domestic assets.
But the, The flow of assets is in the opposite direction. It's offshore for various political, social reasons in South Africa. So, you know, within that, you can see that the natural opportunity lane is in an area where South African managers went operating. So a boutique needs to find that special place to go play hard.
And, and they are always. There are always opportunities. So, you know, single line boutiques will have one specific product that they're brilliant at. We chose to have a slightly more defensive approach. And we were also extremely lucky that we had a massive high net worth client base supporting us, which gave us, you know, the, the.
That they were anchor tenants in the business and allowed us to build out a competency. So you need to have a few ingredients that allow you to survive the tough times. And I think, uh, and, and seeking out a market spot that, that might be a bit different to everyone else is an obvious solution to it [00:21:00] from the distribution purse perspective or, or yes.
Uh huh. Both, both in our country, both in, both in terms of product and team, um, building a team. So no one was building offshore teams and. 2012, they're building South African focused investment teams. So, you know, we've got 12 years of data, daily data points on global. Now, to try and capture that, to catch up is hard if you're starting it now.
So a lot of, you know, problem with asset managers is that the moat is relatively small. So moat is time, moat is data, moat is delivery. And moats, of course, is your investment performance, if you like it or not, and your processes you've built. So having that length of time, so I'm just making the point that, you know, whilst I sounded quite negative on batiks, I do believe there are always opportunities.
And then you distribute, obviously, that last part, that last important leg as you then engage your [00:22:00] distribution in that direction, which is why you've seen Some of my LinkedIn, um, kind of comments and that, you know. Interesting that, um, When you talked about the, the moat, and the things that you can control, That's really resonating for me when I think about clients and boutiques, because even with the best investment process and all the rigor and the risk taking and the risk management side by side, like there's still a lot you can't control in the market.
But when you think about building a business, and I think this is true for entrepreneurs in every industry, you know, you, you start the business because you're good at a craft. That craft is not entrepreneurship. And what I love about your lessons is that They're about the craft, but they're also about just business, building a business and focusing on the things you can control.[00:23:00]
Because if you get those right, you're just putting yourself in a better place for success. Yeah. Look, absolutely. I mean, I'm both an asset manager and a businessman and I've had to be a businessman because I've run three, three businesses. And I think if you want to run a boutique. You know, you fail because you're not a good businessman.
There are lots of good investment managers and many of them fail even though they, because they haven't run a good business. So, you know, I think you got to manage that. You've got to understand your costs and revenues. You've got to plan and make sure you've got the right client base. And what I found, you know, you're asking about, you know, unique kind of, um, Like soundbites for people trying to do this.
And what I've learned, I've learned a few, a few other interesting lessons that the best, the most advice I ever get are from the people that have never built one and it's always negative. So they'll always tell you, you can't do it. And yet they've never built a business. So, so, so I apply, I listen quietly and [00:24:00] respectfully, but I never take it, take it seriously.
The, the, the best advice I get, you know, is from, from CEOs and that, that have done it. And, and spending time with them, of which I have quite a few friends that run big businesses, not just investment businesses. And their authenticity and the way they manage their businesses and the life lessons of how to kind of, uh, make your way through building a business is very, very useful.
And I think it's also important to surround yourself with People you trust, uh that are very competent in your business and if you just get those things, right Um, you know, you you you can you can do it. You can do it I agree with you. I agree with you and I wonder how do you feel? We haven't thrown any numbers around um, but I want to hear for a minute because I wonder how you contemplate growth.
So for, for, so let's pause for a second and get some [00:25:00] context. So when you started your boutique, when it was just you, what were the peak assets when you, or what, what were the assets when you sold it? So we probably had, you know, well over 10, in those days, 10 billion rands. And that business has grown into probably a hundred and something billion rands now.
So it's, it's a big, um, in Northstar's world, we, we're at about now the 10 billion rand mark, but we, but what we've learned is that the, um, the real success for me, it comes every 10 years. So you, it takes 10 years to build these things. And then you reach like that was tipping point. If you good and then you grow.
So, you know, how do we grow? And I think that's, you know, it's a challenge in the domestic space. So we've got a few kind of, um, it's a leave as we're pulling one of [00:26:00] which I haven't spoken about is that we two years ago. Decided to partner with what is traditionally known as a black firm in South Africa.
And, um, we brought them into our business. We've, we've collaborated on research and they, in the institutional pension fund market, we're in the retail high net worth market and the DFM market. And now we target both markets. So we, we have a, you know, it's a, I know it's a very strange thing to say because people aren't used to this, but in my previous job in the corporate space, I, I merged many boutiques and there's a view out there that, that, that you can't merge them.
And, um, I think you can, and, and it's hard, but you can do it. So, um, You know, we might in our first boutique about 10 billion, but when you added all that, all of them together, we had a much bigger asset base and the industry is over traded now all over again. So, um, first Avenue, great South African manager, brilliant people.
There has [00:27:00] joined up with our investment team. Now we've got 15 people on research. We target two different markets. So institutional and the retail market, um, very, very successfully. You know, that's. Why I've also been out of the office for two weeks doing road shows and that, and, um, and practically, you know, more people covering more stocks managed to specialize.
So it's just so many benefits have come from that. And, um, our dream there, which makes us relatively unique, I'd say, is that. We see ourselves as a truly South African company, fully representative of our population. And no one's done that here. No one's tried to do that. And I'll give you a little anecdote.
It's the South African rugby team, which I don't know. You won't know much about rugby, but South Africa's rugby crazy. And we have won, we have won the world cup four times, four times. So the only country in the world to have ever run, won the rugby for world cup four times. And the last two times we've done it with a fully representative, uh, team that's [00:28:00] united the entire country.
So there's a there's a precedent. South Africans of different creeds and colors can work together fantastically and get the best out of each other. And my partner at First Avenue, Shlelo, which we call him Lo, Brings his part to this to this business and I bring mine from from North Star and we're much stronger together.
So that's one way of building up distribution. Just thinking a bit differently to everyone. The next obvious question is from everyone is it never works. Asset managers can't merge. And I'll just say one thing. They can, because I've done it. And secondly, the recipe for getting it right is to nullify ego.
Yes. I have so many questions. This is fantastic. Thank you for sharing [00:29:00] this. I will say one of my favorite books on leadership, I guess I would put it in, is the book Legacy. Have you read that book? I haven't, but I've seen it. It is awesome. And they, so it's about the all blacks for people who are listening.
If you, if you haven't heard of this book, it's called legacy and it's basically about, um, it's, it's rugby and it's about the organization and the culture they built. And there's one thing in there I love, which is they talk about sweeping the shed. And they say everywhere they go to play, um, they leave the locker room, if you will.
Um, and the entire stadium better than when, than how it was when they found it. And there's just so many great lessons. So I don't know a lot about rugby, but I, but I'm a fan of rugby from afar and the haka will literally make me cry. Instantly it's so powerful. Um, so that's a wonderful, wonderful analogy.
So let's talk [00:30:00] about the merging of boutiques cause this is really interesting. And to be honest with you, this is something I wish. more successful boutiques believed in, which is helping each other, helping the next gen, seeding the next gen, merging the things that you're talking about here. And so when you, when you thought of this partnership, there were obviously many reasons that there were synergies.
It's so interesting to me that the first one you mentioned, um, um, Besides the, the, the very big message of unifying culture and being representative of South Africa from a business perspective, you mentioned distribution. You didn't say they ran this strategy, which we didn't have. And so it was great to put those two investment strategies together.
You said they had a market that we didn't have. Can you talk about that? Yeah. I mean, it's [00:31:00] very simple. South Africa is polarized in terms of history and our, and our, and our politics. And, uh, and, and firms are allowed into specific spaces that other firms aren't, to be quite frank, just the nature and structure of the industry.
So, um, and we have affirmative action and BEE requirements in South Africa. So you are, you are obliged, firstly, to, to go and change your BEE status. There's a certain paradigm you're supposed to meet, but we didn't do it for those reasons. Two people liked it, liked each other, felt there was a huge opportunity and, and, and decided to work together.
I mean, and Northstar has its own BEE credentials anyway, because we have a certain empowerment shareholders. So we don't really have to worry about that to go do a merger with a black firm. But, but what, what, so our discussion really, it wasn't, didn't start with distribution, Stacey. I'll be honest, it started around, it started around values and [00:32:00] philosophy.
And we decided to, to merge in a completely different way. We put all our staff into, a room, all the investment staff, and we asked them to present to each other and find out if they felt that there was, that each party had credibility and wanted to work together. And neither Lo or myself pitched anyone, any of them onto each other.
And they decided. That it would make sense to work as a bigger research team and Lo and I obviously understood the business part of it, but we didn't want to force feed two different businesses into the same entity and it naturally evolved. They naturally found each other and we promised no threats in terms of job losses or anything like that.
And I know that sounds insane because most mergers happen because of synergies. Our view is that there's a market out there we can go conquer. First Avenue also is exceptional on offshore investing. So we've. We're targeting that particular, [00:33:00] uh, segment of the market, which is to showcase our offshore capabilities against the best managers in the world.
It sends such a powerful message on so many levels, not just culturally and, and the things that I think are, are unique to South Africa, but maybe not, I mean, That those issues are still, you know, it's a global phenomenon, even though yours is more, uh, more regulated, if you will, um, but the, but the, but the synergies of values and people and yes, all the business components, um, Again, I just, I think it's, you're, you're leading by example, you're leading by example and you're showing people, you know, your comment at the outset of this, of this topic was people say you can't merge boutiques and I'm here to tell you, you can.
And I think that's incredibly inspiring. You're better together, as you said, for many, many [00:34:00] reasons. And I, I hope some of the larger, more successful boutiques. Start thinking the way that you are because there is power together as a collective So you can choose to do it and therefore it's a choice or you are forced to do it and the industry structure Is of such a nature that There's only two real outcomes for many players.
They're either going to be exited out the industry or they're going to be forced to merge. And, um, they, they, so if you look at South Africa, it's just, it's not a bad example of what's happening around the world. So 90 percent of the growth in revenues since 2006 have been market driven and not actually new assets.
So, so you, so managers have got away with growing markets and when markets turn flat, and South Africa is a great example of that. In 2013 our market peaked out really for most industrial and financial shares and been more or less the same level ever [00:35:00] since. So there's pressure and, and we, and since then fees have come down by 15 percent.
Revenues have risen only on the back of the market. And so there's, um, there's a natural, there's a natural, uh, tendency to either be forced out of the industry when that market starts to flatten out or to, to use, uh, The leavers that are available to you. One of them, of course, is the opportunity to merge.
So we didn't want to be forced to do anything. Uh, we wanted to do it, do it early. And do you think you'll, are you thinking about additional boutiques that could come into the mix? Like, is this, is this a one time thing with a very special firm or is this something, I mean, it is, it's a one time thing with a very special firm, but will you together start looking for other opportunities like that?
Um, I can't say we have our eyes open to go buy a whole lot of other asset managers. I think we've, we've, you know, we, we've hit it off. [00:36:00] We get on extremely well. We close, um, you know, we, we speak to each other on weekends. So that's, that's when you've built a decent relationship with another asset manager.
And, um, but, you know, It is not improbable that other asset managers will find themselves on the wayside and require assistance. So where do we come in? We'll be a big research team. We can support other managers, but the problem is you don't want endless numbers of people. So this is where the crux comes in.
Your first merger is you keep everyone, the next ones you don't. So, um, you know, you, and again, those are the risks that many managers face and every manager out there is going to tell you they'll scale their business into infinitum. But the reality is that, uh, you won't and you need to, and not everyone can, let's put it to you like that.
So, um, I, I think there's going to be a lot of mergers and, um, I think we, we've probably done the one we're really interested in doing. And there are so many growth opportunities that have opened up to us now [00:37:00] and big mandates that we potentially could get in that quadruple our business quite quickly. So.
We've done what we had to do to ignite, uh, the next part, next, next stage in our path, which takes me back to the topic I wanted to talk about before. And I lost track cause this conversation's just, it's, it's wonderful. I want to talk about assets because. You hear so much in the context of boutiques about capacity constraint.
You know, if you specialize in something, um, and your, and your, your goal is to deliver alpha to clients, there's this push me, pull you on asset growth and, and alpha generation, right? At some point you're too large to be able to execute your process the way that you Once did. And so how do you think about that?
I mean, obviously, global is a is much more a big bucket strategy. But do you think about capacity constraint [00:38:00] in the context of the strategies that you and First Avenue are running? Look, I think the problem in South Africa is getting assets, not really constraints, not, not getting too much. Yeah, that's a South African problem for 500 managers to be quite frank.
And, um, so there are a few big managers that dominate the landscape and they being. Their cheese is being eaten by all of the rest of us. That's really what's going on in the industry. Um, and that's not a typical, I mean, it's quite typical of what's happening everywhere around the world. Um, I think, you know, I don't spend my days worrying about capacity constraints.
I will spend my days worrying about investment performance and drive and, and, and, and building our business. So, um, you know, I, I also, you, you nailed it. I mean, I'll. Our focus is global. It's, it's while we run 50 percent of our assets are in South Africa, that still remains 15 percent less than the average manager in South Africa.
And we going in that [00:39:00] direction towards offshore, not in the South African direction. And it's an endless, endless landscape. Um, so it's not really a huge worry for us. I mean, I think the real issue in South Africa is the extensive D listings of companies and the terrible economy, which is making the shrink.
So, you know, I think the competition, so where there's a capacity issue is this overcapacity in a shrinking market in South Africa. And, and too many managers have, um, have exposed themselves to a single, a single driver.
Interesting. Definitely some nuances, but I love the perspective. I want to switch gears a little bit. Um, when we were in the green room, I mentioned that I, I love so many things about your website and, uh, And I want to touch on some of them because you've done things that I wish more boutiques would do.
For instance, um, you have [00:40:00] video commentaries on your site. You proudly own the fact that you're a boutique and a specialist. You talk about differentiators. I think you have a whole section on your website about differentiators. And, and so, Is that something that everyone in South Africa is doing? Cause they're not doing it in the States.
I can tell you that much. It's really challenging for, for asset managers to kind of own what makes them different or lean into some of the authentic things or put their people on LinkedIn or on video. Can you talk about that? Has that always been your vibe or is this a, an evolution? Um, I think we run a democracy.
And I know we run a democracy at North Star. So typically, asset managers will see one dominant face on on a boutiques page. You'll see all our staff. You'll see all the staff presenting at some point. And we have a obligation. So I'll get to your other question. We have an obligation to build careers. For [00:41:00] our staff, so they're either either going to build a fantastic career at North Star and we're going to be the best thing since sliced bread or that we're going to teach them everything we can and they're going to be one of the best in the industry.
So we have to profile our staff and and we do that. So that's one thing about our website and and it relates to the way our customers. We think about people in the culture. Um, the, the second point is, you know, why is the website different and there's a lot of strange coloring and weird looking, um, um, like lights and, uh, a picture that's got multiple colors on it.
Well, I can give you just a snippet of what we, What we thought about the time we got a few ad agencies in and we gave them one mandate. We do not want to see a couple at the lakeside kissing or walking in the park or a ship sailing across the ocean or a sailing boat that every asset management company has on their website.
I want to show something completely [00:42:00] different. And our little, um, you know, branding is closer to the truth. So we always believe our job is to get as close to understanding and investment as possible. So we're deeply research driven investment house as we, we very proud of that. And, um, getting closer to the truth often involves seeing things From one perspective, and as you start to delay it, you get a totally different perspective.
So, you know, we all know that what a snowflake looks like when you see it, till you actually put it under a microscope, you start seeing the crystals and, and, and the same thing applies to what we do for, for a living. And so our website does that. It's the pictures are about things that you see in nature, that when you look at them in a different way, they give you a totally different perspective.
And that's closer to the truth. So, um, it is, it is unique and, um, and we've always felt that it should be. So it was intentional and, and, and requires a lot [00:43:00] of bravery. I think your story is inspiring on so many levels, but, but one of them for me is that you're proud. Of being different. And I think that's really tough for people to do, but also for asset managers to do, because it's such a, an industry of sameness, you know, wear this, say these things, carry this bag, get the Patagonia vest, whatever it is, right.
Do the things everyone else is doing. And it's inspiring that you've chosen to challenge the status quo on a lot of levels. I appreciate that. You know, we call it plucky. So, you know, we, we want to be plucky and, uh, and that's different. And, you know, it's an homogenous industry, let's face it. You know, we all tend to stand up and say the same things at the same events.
So we make a point of never presenting the same way as everyone else. We'll never Pitch every [00:44:00] single fund and boring data that put everyone to sleep We'd rather completely change the narrative and even not talk about North Star and talk about a global event and how it's going to change everyone's lives.
And lastly, maybe one or two stocks that are in our portfolio that might be, you know, leveraging of that theme. So our whole intention, it's the industry is incredibly monotonous and bored. You know, the way it's set up by certain managers and You're not going to get, you're not going to get seen, felt, or heard doing that.
Mic drop. You don't even have a mic you can drop. I'll throw mine on the floor for you for that one. That's so good. So, this conversation, I could talk to you all day. Um, I, I want to be conscious of your time and I want to move into something, um, It's my version of proofs questionnaire, I guess, or a way of asking questions that help us get to know you a [00:45:00] little better, though.
You've been incredibly forthcoming before we go there, though. Let's go back to aviation a little bit and talk about how you made that dream. Real. You mentioned that it, it, it took a while for you. Um, I can, I can only imagine what it must have felt like, you know, when you realize, wow, here I am, I'm, I'm in the air.
Talk about that a little bit. So I got my pilot's license in 2005 with a few friends, all financial services people, some of them clients of, of ours, close clients. Um, It was a lifelong dream. I mean, I'm 53. So, um, I, I subsequently bought myself an aerobatics aircraft so I could kind of half feel like a fighter pilot and, and, and I, I enjoy, I enjoy flying my family into the bush in Africa, um, which I do from Cape Town, six, seven hours straight into places like Botswana, very meaningful to us.[00:46:00]
And then the rest of the time, when I get a moment, I'm up in the air on Cape Town, which. It's considered one of the most beautiful cities in the world. And, um, Very privileged and I never never lose sight of that. It's um something I think about a lot I I think aviation, you know off the topic of my aviation just aviation in general Procedural it's it's it's most people die because they're unprocedural not because of the the random events So we've, we've had a bird through the front windscreen of one of our aircraft as well, and that's a random event that can kill you, but we've, we've, but we don't die because we don't manage our field properly, our weather management properly, navigating properly, all the things that are controllable and S management's the same.
The things that usually kill you are on the edges. They're actually not at the center of what you do. So I can relate to aviation very much like I do my daily job. [00:47:00] And you know why I do it is because I like adrenaline. I've always liked adrenaline. Um, I mean, what I didn't say to you is in my early days of when I was a student and surfing around Jeffrey's Bay, I used to arbitrage currency with foreign surfers just to make a turn.
So I've always been in markets and enjoyed that kind of thing. So, you know, aviation keeps me, keeps me highly stimulated and And, and it's something that my phone can't ring. My phone can't ring at 10, 000 feet. And it certainly can't be allowed to ring at 200 feet. So, um, that's why I do it. The threads of what you said at the beginning of the three pillars of a successful boutique and the operational excellence and the investment management rigor and the distribution, gosh, rang so true for me as you were talking about aviation.
So I can see just the [00:48:00] authenticity around those two passions. Thank you for sharing that with us. Okay. We'll see you Are you ready for some some questions? Um. Not fast fire, but faster fire. Sure. Yeah. Sure. Okay, here we go. I'll try to, I'll try to baby step into them. Um, what book inspires you? Um, Into Thin Air.
Um, it's about, uh, expedition into Everest. 1996 and they lost eight people on that and and what the real reason why I enjoy it is it's around odds management and and and not and and lack of preparation and poor odds management and I think Bill Bowden's Red Notice also is something that I've always loved.
I know it's a commonly read book but that to me is around perseverance, drive, justice, Um, and success. So those are two, two books that one's non, [00:49:00] uh, financial, but yeah, certainly well worth the read, I think. Yes. Uh, the, the non financial ones are always interesting how people tie them back. So I love that you shared one, one of each.
Okay. Now let's take it to place. What place inspires you? What's your happy place? So there are many things that I'm lucky enough to enjoy in life. I think that's the benefits of working in financial services for a long time. Um, but two things that really mean a lot to me, the one would be, I mentioned it before, getting into an aircraft and flying into African Bush with my family, my three girls, and we all fly Cape Town straight into the swamps in Botswana or the Delta, and that, that with friends, and that's very, very special.
And I think the second would be, Some tropical island somewhere. I've been to Indonesia six times. I've traveled that country even in COVID We managed to get in there and I would go surfing with my daughter, one of my daughters and that's I [00:50:00] didn't know the surfing thread. This is a new element. Okay, I'm loving it Okay, so now I don't know.
I don't know the stadiums in South Africa well enough to paint the picture But we're gonna pretend that you are gonna take the stage in one of those stadiums You Um, and talk to thousands of your fans before you step onto the stage. What song do they play as your walkout anthem? What song hypes you up?
Yes. I mean, I know the song South Africa, but of course, Sisikelele is our national anthem. I mean, every South African just, it's, it's, it's, it means huge amounts to us, you know, and even people that live abroad, which there's so many of them there, you know, there's certainly um, It's difficult not to feel very connected to that.
Gosh, make me well up. That's a very moving and special answer. That's never been said. [00:51:00] Um, your, your national anthem. That's fantastic. Okay. Switching gears a little bit. I might, I have a guess on this, but I think you're going to surprise us. What profession other than your own, would you like to attempt?
Yeah, look, I mean, you can't do it at 53, but a military pilot wouldn't be too bad. Yeah.
Yeah, I think, I mean, it's, yeah, I think just, you know, if I could do anything maybe in the aviation world, when I finally depart here, it might be just, I'm not a commercial pilot, I'm a private pilot, maybe completing a commercial license and training, training people. I enjoy, I enjoy, I love flying, and I enjoy flying with people, and I even, I've shown many of my friends to fly, um, over the years, so I think that would be awesome.
Combining some, some different passions there, that's great. A flip side, what [00:52:00] profession would you not like to do? So if I woke up tomorrow morning and I found myself in a plumber's outfit, I think there's just enough of it in the market. I wouldn't want to have to deal with it daily, to be honest, so that would probably be my thing.
Did you practice that? Did you rehearse that? That is so good. I just think that would be awful. So, you know, I think I'm, I'm use, I'm useless with house chores and I think plumbing would be the end, my end degree of hatred. The comment about there's enough of it in the market is too good. Okay. So last question.
Um, When you leave or retire from the industry, what do you hope people say about you? Um, I hope they say I'm honest, and I hope they say I'm competent. I would like to think they would say that, I don't have a word about [00:53:00] someone behind their back, so I'd always talk directly to someone's face. And, um, yeah, that I've kept my promises maybe is probably important, done the best I could anyway.
What I love about that is how integrated it is into the values of your company. And I think that's, that's authenticity right there. You're, you're, you're, you're living it as a person and you're also living it as a company and as a leader. No, thanks. This has been a wonderful conversation, Adrian. This is a can't miss for boutiques as they build.
Um, thank you so much for being here. Thanks, Stacy. Appreciate your time today. Take care.