VETERAN OF THE GAME

A passion for investing and a determination to succeed has seen Philip Parker, chief executive of Parker Asset Management start up two successful funds management firms during his career in the financial services sector, writes Linda Hausken.

Philip Parker, the founder and chief executive of Parker Asset Management knows a thing or two about investing, having worked in the sector for 26 years. As a fund manager he has a built up a solid reputation for being a brilliant stock picker. At the age of 36, he set up his own company that has since amassed $200 million in funds under management.

But setting up a business wasn’t on Parker’s agenda when he was fresh out of university and had just landed a graduate trainer job with National Australia Bank. However, it was while in this role that he developed a keen interest for treasury and equity markets which lead to a successful career in funds management.

In the late 90’s, Parker was hired as an analyst and portfolio manager by Peter Burrows, a man he regards as mentor and also a “marvelous man.” At the time, Peter Burrows was a founder and chief executive of Burrows Limited.

“Peter taught me how to make clients the number one priority in whatever you do and that it’s vital to go and see them even if you are a big fund manager,” he explained.

Parker said during the time he worked with him he really learned the value of communication. “He always told me that you have to communicate regularly with clients, keep them informed about what you are doing and keep them close to the process.”

He admits that back in those days he still had a lot to learn about the stock market and that Peter was a good mentor in the sense that he would look at both value as well as growth stocks.

“He made me understand that the market is a moving beast and you’ve got to look at all aspects of the market, its not just about value and its not just about growth.”

While working with Peter – a major source of inspiration – he said he developed a passion for owning his own business.

After six years with Burrows Limited, he resigned from his position as a portfolio manager to pursue his dream of becoming a business owner. In the early 90’s, he started up Hunter Hall a boutique fund manager with business partner Peter Hall.

“We ran the business together and both managed portfolios. When we first started up we had nothing, but when I left we had about $700 million of funds under management,” he said.

The business relationship between Parker and Hall ended after a decade when his partner wanted to take the business offshore to London.

“Seeing as I had already lived and worked in London during the early stages of my career, I didn’t really feel like going back so Peter bought me out of my stake.”

However, by that time he had become a fully fledged fund manager who had developed a solid reputation for excellent stock picking, and strong work ethics.

In 2000, he opened up the doors of Parker Asset Management with a little under $60 million of funds under management.

Parker admits that when he started up the company he had a lot of confidence in his own abilities as he had already worked for a successful funds management business.

The jump wasn’t that hard he said, “because of my background with Hunter Hall, I had a good ethical reputation in the market and was know as someone who looked after my unitholders really well.”

Even though Parker experienced a fairly seamless transition he still encountered a few bumps along the road in the initial stages of business ownership.

Parker acknowledges that it was a bit nerveracking in the beginning as he didn’t know where to get money from or who was going to introduce funds to him.

“Luckily, we had one particularly large family office who gave us a lot of money to mange in the initial stages which helped a lot,” he said.

Parker admits that the start up phase “took a lot out of him” as he only had a team of four.

However today, with a team of ten he can focus on researching and visiting companies which he says remains his number one priority.

Apart from having had Peter Burrows as a guide and mentor, Parker often looks to Peter Lynch, a Wall Street stock investor for inspiration. Lynch, a US investor who started off in the early 70’s is renowned for starting up the Magellan Funds.

“I’ve read a lot of Peter Lynch’s books and in particular there is one called ‘One up on Wall Street’. It’s about going out visiting companies, eyeballing them and seeing if they are telling you the truth when you ask them the hard questions.”

Parker said he believes the key to success is getting inside a business and really understanding what they are doing, and finding companies to invest in that have a series of easy-to-understand goals.

“It sounds pretty simple, but if you sit in your ivory tower and don’t get outside your office, then how can you possibly understand what’s going on inside companies?” he asked.

“Most fund managers and broker don’t do this as it’s a rare strategy. But Peter Lynch he did just that and he would hardly be in his office as he would be out seeing companies all day every day and that’s the secret to success.”

In addition, he said it’s also important to do a ‘pest inspection’ before parting with hard earned cash.

“When we go out and meet these guys, we’re trying to work out who the good and who are the bad insects are. We watch whether or not they squirm, and if they do – we move away very quickly.”

Parker said if there is only one message he could get across to other fund managers and finance professionals out there, it would be this “you can’t sit on your hands, you got to go out there and get dirt in your fingernails and see the businesses before you make any investment decisions.