SYDNEY (Reuters) - Global stock picker Kerr Neilson, dubbed “Australia’s Warren Buffett,” said he will step down as chief executive officer of listed fund manager Platinum Investment Management (PTM.AX), sending its shares almost 12 percent lower.
“It really is time for me to focus on fewer things and do those well, rather than try and cover this whole global investing scenario,” Neilson told Reuters on Friday.
Neilson, who founded the fund with the backing of U.S. investor George Soros 24 years ago and became one of Australia’s richest men overnight when he floated it in 2007, will remain executive director.
But his departure from day-to-day business, wiping as much as A$800 million ($626 million) from the market capitalization of Platinum, illustrates the vulnerability of fund managers in particular to “key man risk,” since it can trigger clients to pull their assets.
Bill Gross’s abrupt departure from United States asset manager PIMCO in 2014 sent funds flowing away from the group, while BlueBay, one of Europe’s biggest asset managers, closed a $1.4 billion hedge fund the same year when manager Neil Phillips left.
Platinum shares posted their sharpest drop in three years on Friday, dropping as much as 17.5 percent to a four-month low of A$6.45. They closed 12 percent lower while the broader market rose 0.8 percent.
“Of course they’ll lose some mandates but they’re big enough for that,” said Geoff Wilson, founder and chairman at Wilson Asset Management (WAM.AX), which holds Platinum shares.
Platinum has A$27.1 billion in funds under management and announced Nielson’s departure with its half-year results, which beat analyst expectations, after the market closed on Thursday.
Neilson has focused the fund on Asian investments, but said a mid-1990s investment in IBM (IBM.N), and timely purchases of Microsoft Corp (MSFT.O) and Google-parent Alphabet Inc (GOOGL.O) are among his best-performing picks.
“The tech bubble we played beautifully; we’ve been quite good at big turning points,” he said.
“Then the big balls-ups: I stayed too long in my shorts the whole of 2008 onwards,” he said listing Walmart as a short target that had soared.
“But we’ve outperformed even with that ... so there’s a system in the stock selection here that is pretty robust.”
Neilson, who steps down on July 1, will be replaced as chief executive by younger co-founder Andrew Clifford. Neilson said he closely studied individual stocks, often paying as much A$600 per hour to interview former executives.
“You get a profile that is much deeper than simply the numbers,” Neilson said.
“We try to find when there’s been a disproportionate action to an event and then the analysis lies in assessing whether that event is character-changing or not.”
Reporting by Tom Westbrook; Editing by Stephen Coates