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The people behind the process – Alan Kwan

The people behind the process – Alan Kwan

As we broaden out the expert teams partnering with Montgomery, I take the opportunity to talk with Alan Kwan the Co-Portfolio Manager from Australian Eagle Asset Management. I lift the lid and see what makes the people behind the process, the blog posts and the numbers tick.

Profile: Alan Kwan (Australian Eagle Asset Management)

What initially drew you into funds management?

I spent one summer during my university days as a National Mutual (subsequently taken over by Axa and then AMP) actuarial intern in the investment department working on a project for the global equity team and was hooked on investments from then on. It was certainly more interesting at that stage of my life than doing superannuation valuations.

What makes a successful investor?

Humility and willingness to go against the grain. You usually only make money not by doing what everyone else is doing. And you have to be prepared to be too early in your thesis, as in the short term you can be wrong. Our job as fund managers is to be able to judge when our thesis is wrong, in which case we have to change our minds and our position in a stock. Usually, the market takes some time to change its mind on a company and when it decides to agree with our investment thesis, the re-rating on a company is what can deliver exceptional returns to investors.

What is the best piece of advice you have been given?

The originator of our investment process and our Chairman of Investments, Albert Hung, continually reminds us that great investors only make money by being contrarian. It is the patience to wait for the market to agree with your thesis that allows you to make superior returns. Ultimately, investing is all about psychology.

What is the biggest mistake that most investors make? 

In my opinion, trading too much. Investors are inundated by information about companies with the advent of the internet and the mobile phone. The important thing is to differentiate what information is important to your thesis and what to leave out.

Tell me about one of the best investments you have made on behalf of your funds?

I noticed Xero run from $10 to $40 between 2012 to 2014 on the back of growth in subscribers for their cloud accounting product. Subsequently, after the share price fell back to around $10 in 2015, we decided to invest after the National Australia Bank launched fast small business loan approvals on the back of analysing the data embedded in Xero’s software. We saw the ability of Xero to monetise the data available in their product to add a new growth driver for the company on top of just subscriber growth as their cloud software displaced the desktop software from incumbents such as MYOB.

If you weren’t the co-PM at a boutique funds management firm, what would you most likely be doing?

I may have got into the medical field. I considered a medical career at university but decided I didn’t like the sight of blood.

So Alan, can you please share with our readers what you are working on at this minute and why?

It is coming to the end of a volatile year in markets and a busy year for us at Australian Eagle with the recent partnership with Montgomery Investment Management. At the moment we are thinking about the outlook for 2023 for markets and the portfolio.

What do you do in your spare time?

I have spent the past few months renovating a small weekender my wife and I bought a few years ago down the South Coast of NSW. That should keep me busy for a while.


Scott Phillips joined Montgomery Investment Management in 2013. Scott joined the firm from BlackRock Investment Management, where he was Managing Director, Head of Retail Australia for 12 years.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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