Equitable Investors founder and managing director Martin Pretty delivered his investors a 24.83% return in calendar year 2021 – 7.6 percentage points more than the ASX 200.

The result continues the strength his Dragonfly Fund has exhibited in recent years, which has seen investors’ money grow 10.68% per annum over the past three years, and builds on the successes Mr Pretty had in previous roles, including his performance table-topping stint with Thorney Capital.

His current endeavors are supported by his equity analysts Mickey Mordech and Ben Richardson, as well as by PSC Insurance founder Paul Dwyer, who serves as a non-executive director of the business.

Speaking to Reach Markets, Mr Pretty explained the driver of these results is his investment style, in which he tries to look past the ‘growth vs value’ mentality that preoccupies other investors.

Nor does he look to follow the crowd and buy into the hot new stock on the market.

“The best opportunities are the opportunities that not every man and his dog are already in yet,” he said. 

“I’m not interested in the momentum game, where everyone else is getting into a stock so we get into it and hopefully get out before everyone else does – but we don’t know when that will be. I think that’s basically just speculation.”

Instead, Mr Pretty said his fund looks to buy companies that have a fundamental case for growth (which often still represent good value) or businesses that, while not necessarily economic on their own, represent prime acquisition or consolidation targets for other firms.

“An example at Thorney, in my time there, we bought into an independent superannuation trustee business called Diversa, which was listed,” he said.

“There’s not many of those companies that have the kind of revenue and customer base that it had, and we could see that it was going to be attractive to other players to consolidate.

“We ended up building a 19.9% stake in Diversa; we knew its numbers were improving so we knew financially it stacked up on its own, but we also knew that it was going to be worth more to other parties, and ultimately it was acquired by OneVue.”

Mr Pretty’s approach to investing has been shaped by experiences garnered during his ‘storied’ past as a journalist.

Originally hoping to become a political commentator, Mr Pretty’s first job out of university was as a writer with a now-defunct website called Investor Web.

The site provided readers with a steady stream of news and research, covering funds management and equities. Importantly, it also owned half of Investors Mutual, a fund founded and led by veteran fund manager Anton Tagliaferro. 

Though Mr Pretty eventually left to join the ranks of The Australian Financial Review, these early experiences set him down the path to becoming a fund manager himself.

His time as a journalist also informed his approach.

“Being a journalist is an excuse to call and speak to almost anyone,” he said. 

“You get to meet a whole range of people and for me it was corporates, it was fund managers, it was the brokers – I got to see all the different sides of the marketplace, which I think is pretty unique.”

Mr Pretty gleaned what knowledge and wisdom he could from each of these interactions to eventually form his own philosophy about markets.

Join Martin Pretty this Friday, 11th February, at 12pm (AEDT) on our weekly The Insider: Meet the Fund Manager webcast to hear him talk about his favourite stocks, investment strategy, market insights and more. There will also be an opportunity to ask questions during the session. To book yourself in, click here.

Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position

Sources

• Investor Daily, ASX 200 delivers total return of 17% for 2021
• Equitable Investors, In Between Days
• Equitable Investors, About
• Equitable Investors, Dragonfly Fund
• Investors Mutual LTD, IML profile