Ask the expert: From Fairfax family to Morningstar members

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Glenn Freeman: In this edition of "Ask the Expert" I'm speaking with the new CIO of Morningstar Investment Management, Matt Wacher.

Matt, thanks for your time today.

Matt Wacher: Thanks a lot, Glenn.

Freeman: So, Matt, previously you were the Chief Investment Officer with Cambooya which is the family office trust for part of the Fairfax Family. It's apparently one of the oldest office trusts in Australia.

Wacher: Yes, that's right, Glenn. I was the CIO there and I think there's lots of similarities between the organisations from an investment perspective that have prepared me for this role at Morningstar.

Certainly, putting investors first and being able to talk to investors on a daily basis there really made that front of mind and it's something we do here at Morningstar, obviously, investors come first all the time.

But certainly, investment philosophy as well. The family that I worked for are very long-term focused; they had a lot of patience to key traits and parts of our investment philosophy here.

There was a focus on capital preservation and downside risk. No one wants to lose money. But more importantly, the valuation-based framework that we had at Cambooya and here at Morningstar are fundamental principles of investing.

Freeman: Sounds like there's quite a few comparisons. What were some of the contrasts between the way things are done in a family office trust versus an investment manager like Morningstar?

Wacher: Well, I think, the key difference is probably the distance between you and the end investor. While we always keep investors front of mind here at Morningstar, you could talk to investors at Cambooya, or the family, you could talk to them on a daily basis, get their views, get their sentiment, get their beliefs and that they are very good at valuing the advice that you would provide them. So, you could set the agenda. But they were right there, and they had to talk to it and that's the key difference.

Freeman: And what about in terms of the processes that you follow and the size of the team, the asset selection process? How did that compare in a role like that to here at Morningstar Investment Management?

Wacher: So, in terms of the process itself, probably quite similar but it's who doing the work. So, your point on the size of the team, the team is obviously a lot smaller in the family office.

So, you have to roll up your sleeves and get into the weeds a lot more. Look, it's the key difference there and the key thing that you're always trying to buy yourself a bit more time to think in the family office environment because there's a lot more going on that you need to be involved in because of the size of the team. Here at Morningstar, we do value having time to think and reflect and be more strategic about what we do for investors.

Freeman: In your past, you've also worked within a superannuation fund. You were at Qantas Super in a portfolio management role, which I imagine is sort of different again in dealing with institutional mandates and just an entirely different process?

Wacher: Yeah, certainly. Again, the underlying principles are probably very similar. Again, you are thinking of members or the investors first. But certainly, there's a lot more restrictions and constraints around you and a super fund. At Qantas Super we tried to do things innovatively and bring kind of the investment philosophy to fore, but you do have asset allocations, the architecture that you can work with is quite different in a superannuation fund working through, kind of, investment committees and boards and whatnot. It's different in that regard.

Freeman: And lastly, now, in the six or seven weeks now that you've been Morningstar, what are the things that you are focusing on from this point on?

Wacher: Certainly, I've been buying into the culture. I think it's a really good culture here at Morningstar and in the investment management business. That's kind of key making sure everyone buys into the philosophy and it's aligned to that, it's kind of key for the investment management business. And then, trying to get into the weeds as much as I can but taking baby steps along the way and making sure I understand process and how we do things here is really important as well. So, I'll get there and I'm enjoying the journey so far.

This report appeared on 2022 Morningstar Australasia Pty Limited

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