The Australian Investors Podcast
Tony Hansen - Glacial
Tony Hansen is my guest for today's show. I've been wanting to speak with Tony for a while because the way he thinks about investing and the management of money is unconventional and potentially disruptive.
Tony founded EGP Capital, an Australian funds management business based in Sydney.
Tony's early life was filled with bad luck, good luck, hard work and skill. After finding himself with hundreds of thousands of debt as a teenager, Tony learnt some hard lessons about business and money very early in life.
Despite his success in more recent times, however, Tony is grounded, very humble and generous with his time. And he has some great lessons to share.
I hope you enjoy this episode with Tony Hansen of EGP Capital.
- 0:45: Intro to Tony Hansen
- 1:45: At 18, Tony takes on the family business... which is on the verge of bankruptcy
- 4:20: Lessons from early business life and counterpoints
- 5:00: Tony goes back to study Commerce and works 3 jobs
- 6:00: Tony and his wife pay off their mortgage ASAP and reflect on selling flowers down the road
- 8:30: Graduation and joins UGL
- 10:00: The mortgage is paid off before 30... despite earning a meagre salary
- 11:00: How to buy and sell cars without losing BIG
- 12:00: did saving money impact Tony's happiness?
"Chains of habit to light to be felt until they are too heavy to be broken"
- 12:45: How Tony thinks of $1 today versus $1,000 in 50 years
- 13:20: The GFC hits, Tony gets lucky on Sydney's property market and we discuss behavioural biases
- 15:20: Tony asks his wife to take a $300,000 home loan to buy shares
- 16:35: What Tony bought during the GFC and why 30% of his net worth was in Listed Investment Companies (LICs)!
"You could almost throw a dart at the shares page... and do quite well"
- 18:00: Tony invests one-third of the family's wealth in the resources sector
- 18:35: Friends and family see Tony and his wife grow their wealth rapidly and want to invest, the idea of EGP is seeded with $400,000 plus $80,000 from 16 investors (in total)
- 20:45: Tony reveals one way to start an investment company in Australia (Why? It was cheaper)
- 22:00: Tony invests $15 million for less than the price of a used car
- 22:30: EGP saw a problem with managed fund fees and structure. Tony discusses what he looks for in a managed fund
"More than 90% of Tony’s family worth outside the family home is invested in EGP Capital. In this regard he likens himself to a Roman arch builder:
“In the building practices of ancient Rome, when the scaffolding was removed from a completed Roman arch, the engineer stood beneath. If the arch came crashing down, he was the first to know. Thus his concern for the quality of the arch was intensely personal, and it is not surprising that so many Roman arches have survived.” (Seth Klarman, 1991,“Margin of Safety”)" - Quote taken from the EGP Capital website
- 25:00: The rise of ETFs, passive funds and smart beta, and Tony's unique fee structure (note: basis points = percentage points. E.g. 1 basis point = 0.01%).
- 26:30: How does Tony keep the lights on when EGP doesn't earn any fees?
- 27:50: Tony's investment process and mission at EGP. "Glacial".
- 29:28: Does Tony invest for a decade or longer?
- 31:30: How fast does a company compound its intrinsic value?
- 32:30: The difference between overconfidence and conviction
- 34:00: Tony doesn't earn a fee unless he does better than the market, so he's playing catch-up
- 35:00: Tony reflects on Mohnish Pabrai's 10 years without earning a fee
- 36:00: The EGP team, process, ideas and filter he uses
- 37:25: How Tony plans to beat artificial intelligence and quantitative investors
- 38:29: Is value investing dead?
- 40:10: How does Tony value investments?
- 42:08: Does Tony leverage his work experience in his investing?
- 43:30: What's next for EGP? Will the company be able to grow forever?
- 45:05: The "Zero Fee Manifesto" -- how Tony plans to grow EGP into a finance juggernaut
- 46:25: The shift towards 90% passive investing
- 48:30: How to find Tony and EGP online
- 49:00: What would Tony tell a younger Tony (if he could go back in time)?
- EGP's Seth Klarman quote (as above)
- EGP Blog & 2018 Annual Letter
- Intrinsic Value
- Compound Interest video
Learn more about Tony & EGP: