2023 Top 100 Financial Advisers: Frank Macindoe, Koda Capital
21 Sep 2023
For Frank Macindoe, the challenge in long-term investing is to ignore the noise and determine the underlying trends. The adviser and partner at Koda Capital in Sydney takes a considered, multiyear investment approach that aims to minimise volatility while achieving superior returns.
“I try not to be distracted by the short term, ” he says. “Sometimes the markets are just noise. You’ve got to try and separate the signal from the noise and that’s as much an art as it is a science.”
Macindoe, who took out eighth place in this year’s The Deal/Barron’s Top 100 Financial Advisers, takes a considered and detailed approach to his work as an investment adviser that reflects his background as a lawyer. He spent two decades in commercial law, specialising in project finance, corporate restructuring and insolvency, before deciding to spend more time with family.
He determined to put his interest in markets to good use as an investment adviser, and worked at JBWere for 16 years. In 2018, he joined Koda Capital, where his clients include high-net wealth families and individuals as well as not-for-profits.
He habitually scans the news and markets, as well as delving into the workings of specific businesses, for insights and markers of things to come. He does his own research, adding to that of the Koda internal team, Citi and other investment banks, to keep up with emerging technologies, demographic and business trends.
Outside of Koda Capital, he is a portfolio manager and responsible manager for the philanthropic Third Link Fund, which has provided almost $20 million to charities over the life of the fund.
For Koda Capital clients, Macindoe manages a discretionary portfolio of direct equities. Each client retains their own separate account. When determining an investment approach, Macindoe assesses the needs of the client and their appetite for risk. Given some of his clients are not-for-profits, many are appropriately cautious and require measured and documented decisions.
“I want to avoid unnecessary risks, and make sure that the clients are well rewarded for the risks that they do take,” Macindoe says. “You’ve got to make absolutely sure you understand what the client’s needs are, and what risks they’re willing to take.
“There are two parts of the job. One is to come up with a good set of investments, a good portfolio that should meet their needs, as best you can work it out. And the other thing is to make sure that psychologically it’s also suitable. The psychology is as important as getting the investment fundamentals right, so that clients can stay the course for the long-term, given market downturns and change.”
Therefore, he devises strategies taking account of client risk appetites and experience. But he says the role of an adviser is to sometimes provide clients with answers they may not want to hear. He cites an example of the hype around AI and AI-based technologies as the future of the world but notes there will be far more losers than winners, as with the dotcom bust in 2001. Likewise, he is concerned about long-term growth in China, given its ageing population, reduced workforce capacity and high youth unemployment.
He says sometimes the most important work of an adviser is providing a professional opinion the client may not share.
“You often do your best work for a client when you tell them something they don’t want to hear,” he says. “It’s easy just to agree with a client. But sometimes you just have to have the courage to say, ‘Well, you might think that, but that’s not what I would suggest you do.’”
But it is his clients who keep him engaged and interested in his role, both in their businesses and in navigating the complexities of the world. “I find my clients very interesting to talk to and I learn a lot from them and enjoy the challenge of helping them,” he says.
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