10th year anniversary of JF Capital Partners

JF Capital Partners is very pleased to be recognising 10 years of operation in 2009.

We first opened our business in 1998. Our business has grown steadily over the years and we currently manage five investment strategies and have over 20 staff, the majority of whom own equity in the business.

JF Capital Partners values its employees and celebrates their important position in leading our business through its 10th year and beyond.

Below is Michael Fitzsimmons' speech given at JF Capital Partners' 10 Year Anniversary functions in Melbourne, Sydney and Brisbane, attended by clients and consultants.

I would like to welcome you all to JFCP's 10 Year anniversary dinner. For any business to last for 10 years, in such a competitive environment, is a great achievement in and of itself, but to prosper and grow as we have done, especially over the last five years, is particularly satisfying, and makes me feel extremely proud of our team. The first five years of our business was largely about surviving. Looking back, there were many trials and tribulations over this period, and it's only thanks to the patience and loyalty of our clients back then, that we are still here today. The second five years has been about building our business; bedding down our investment team; generating a robust performance track record; honing our investment process; and solidifying our culture. It is over this period that we have managed to build the confidence of our newer clients and thereby grow our business.

Therefore, our survival and success, is in large part, due to the loyalty and confidence of you, our clients.

There are two issues I would like to touch on this evening: the development of our investment team; and the evolution of risk as a key part of our investment process and culture.

Firstly, the development of our investment team. Building a funds management business is first and foremost about building a great investment team. Too often in this industry, there is too much emphasis on individual personalities. Contrary to this, we have focused on the 'power of the team'. We have built our team on a diversity of skills, backgrounds, ages and personalities. But the common thread has always been to attract people to our team: who are intellectually and intuitively capable; who have a real passion for investing and a desire to win; and who have a natural instinct to take on risk - not any kind of risk, but those risks where the odds are stacked in their favour. Our goal has been to create an environment that promoted greater objectivity through both critical review and internal support. The outcome of all this has been team stability. The stability has, over time, allowed us to leverage the synergistic linkages across our team. And it is these synergistic linkages that have created a real and sustainable competitive advantage for our team.

The second point I want to touch on this evening, is our focus on risk measurement, and from this, the culture of rational risk-taking that has become part of the DNA of our team. In January 2005, we began our journey of seeing the future as a 'cone of uncertainty', rather than one expected path. This meant building a number of scenarios of possible future outcomes, rather than being tied-down to one particular view. On the face of it, a small step. But for us it was a critical development to see the future in more than one dimension. From April 2007, we started to move on from this scenario-based analysis, to a Monte-Carlo simulation process, whereby we recognised that there are not only multiple scenarios, but also multiple paths emanating from these scenarios. Dealing with risk is more than just about measuring it. It also required a mindset change at the individual level, and a cultural change at the organisation level. It has been my job over the last five years to engineer these changes, by getting our people: to recognise uncertainty when other investors are over-confident about the future; to invest based on probabilities and payoffs when other investors are too risk averse; to act on an objective assessment of available information, despite residual uncertainty; and to judge decisions not only on results, but also on how they were made.

I would like to finish with a quote from Professor Paul Saffo, a technology forecaster based in Silicon Valley........

"The goal of forecasting is not to predict the future but to tell you what you need to know to take meaningful action in the present."

This quote, more than any other, encapsulates the evolution of our investment process, and our investment culture. That is, a passionate focus on measuring and understanding investment uncertainty and risk. And ensuring that you, our clients get well compensated for bearing those risks.

I think that at the moment we are in the "eye of a storm" that has engulfed financial markets in the last couple of years. The next 10 years will no doubt be as challenging, if not more challenging than the last 10. But I am confident, that we have an investment process, and an investment team, capable of continuing to deliver strong performance results for our clients, despite the expected challenges that lie ahead.

Thank you again for coming along this evening, and I do look forward to seeing you all in another 10 years for our 20th anniversary.