Glenn Freeman: Has coronavirus changed the way that you think about the investment landscape that the companies are existing within?

Matt Williams: Yeah. Look, Glenn, it's been an amazing sort of three to four-month period. And I think the crisis enveloped us so quickly and the market that there wasn't a lot to – you know, you couldn't sort of think your way through it in a long-measured way. What we did do though, we felt that as the crisis sort of kicked off, it was not going to be good for financials. Obviously, the banks being exposed to the non-performing loans, the economy really took a sharp hit. So, we reduced our exposure to banks, in hindsight, not enough. But we reduced our exposure to banks. And then, we just sort of added to those names that we felt, well, no matter what happened with the crisis that they would survive and if the crisis ended, they would thrive. And so, I think companies like BHP, Wesfarmers, Coles Myer, Aurizon and even Medibank Private, we added to those portfolio names. So, we held them going into the crisis and we added to those.

We also then added back into the portfolio we hadn't owned into the crisis. ASX, we felt that was a bit of a gift below $60. And a few REITs that got absolutely pounded in the depths of the crisis like GPT. Even though the outlook is quite murky for some of their retail and office investments, we just felt the pricing was too cheap there. So, that's sort of how we play that in the portfolio.

Freeman: And what about in terms of the cash holdings? Have you increased your cash allocation, or indeed have you touched it at all?

Williams: Our mandates generally want us to be fully invested. So, we have a 10% cash limit. I guess as the crisis hit and the market fell and as we added to those positions I talked about, the cash started to get to the low single digits for us which was at one point was a bit of a concern because we felt that there was going to be – it seemed though there was going to be a lot of recapitalizations. As it turned out though, for our portfolios there were only two companies that raised capital. And so, we didn't need to be concerned. Subsequently, in April, as we saw the market just roll back higher, we've been trimming a few names. And now, the cash is building back up and now we're in the high single digits of cash and looking for opportunities to present themselves.

Freeman: So, we've seen some of the governments, the stimulus measures being wound back. And so, from mid-July I think we'll see that Child Care Subsidies pull back and then again in September, some others. Do you think that's going to have much effect on the companies out there? Will we see mass bankruptcies with businesses or what do you think about there?

Williams: It's hard to say how it plays out. But the companies that we've been talking to over the period and some Australia's largest are quite concerned about what happens in the fourth quarter of this calendar year as the stimulus is withdrawn. They're quite concerned about that and I think the government is probably thinking about how they bridge some of this sort of withdrawal and maybe stagger it a bit better. But it certainly is a concern. I think there are so many companies listed on the market that are exposed to consumer spending. The Australian stock market is quite a B2C kind of market. A lot of companies need consumers to be healthy to generate or hopefully even increase profits. So, it's going to interesting. I think consumers have had the – afraid of their life. It's been a very difficult time for so many people. You can't underestimate how tough it's been for people and businesses.

Freeman: Infrastructure is something that we've seen the government, it's been on the front pages today. Is that a sector that you've had much exposure to in the past or is it something that you're looking at now?

Williams: Yeah, it's not of one we've had there's massive exposure in. And it all sounds great. When you think about the building boom that we've had, particularly on the east coast Sydney and Melbourne in particular over the last five odd years, it's actually quite – it's hard to find a company you can go where they've really made a lot of money out of this infrastructure boom. And I'm thinking about those contractors, the building contractors like CIMIC or Lendlease. And really, it's been sort of a profit-less boom for these companies. Even Boral with the cement operations have sort of struggled; Adelaide Brighton, you know, they've been pretty disappointing performers. So, this talk of infrastructure boom can sometimes just not be as profitable as you might hope for.