About Katana

Flexibility with Accountability

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THE KATANA STORY

Katana Asset Management (‘KAM’) was founded in September 2003 as a boutique investment management firm exclusively focused on Australian equities. KAM was granted an Australian Financial Services Licence in July 2005. In September 2005, KAM established its first fund Katana Capital Ltd, which was listed on the ASX in December 2005 (ASX code KAT). In April 2011 Katana Asset Management launched its second fund – the Katana Australian Equity Fund (KAEF). KAEF is an unlisted version of the first fund and is managed by the same team, employing the same investment philosophy.


Katana Assest Management (KAM)
AFSL Holder – No.288412


Katana Capital Ltd (KAT)
Listed Investment Company

INVESTMENT APPROACH

Our approach and philosophy was setup to challenge the artificially imposed constraints of managing money. We have strived to remove all the artificial barriers to investing by having a mandate that is not limited by index weightings, sector restrictions, thematic or company size. This coupled with our ability to move swiftly to a significant proportion of cash as a defensive when required, allows us to aim for the best risk adjusted returns we can.


CORE BELIEFS

Market Forces – ‘Be careful when others are greedy and greedy when others are fearful;’ (Warren Buffet) the best value is to be found at times of extreme fear: commonly this fear is restricted to particular companies; other times this fear is less discriminating. Similarly, stock prices both singularly and as a group overshoot to the upside as ‘irrational exuberance’ or misplaced optimism leap to the fore. Identifying and assessing potentially oversold stocks is an intrinsic part of the day to day function of the Manager. As a further note, large asset dislocations are rare and may only occur every few years. The Manager is focussed on making large investments at stock and market extremes. More

Investing is one part maths, one part economics and one part psychology unless this is recognised and embraced, decisions will be negatively impacted. Katana Managers recognise and embrace the blend of skills and strive to consciously adjust for sub-conscious bias and strengthen individual weaknesses.
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Never forget Risk and volatility; It will return. When the market ignores risk it is only a question of ‘when not if’. Risk always reverts to the mean; sell assets when risk premiums evaporate. Buy assets as the cycle bottoms and risk appetite is on the rise.
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There is no perfect company; only inadequate research and analysis will fail to undercover risks and flaws. We must accept that we have to purchase imperfect companies and hence need to turn the focus from trying to locate perfect companies to trying to identify the best stocks on a comparative basis.
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Mispriced stocks exist in all markets; the challenge is to identify them ahead of the market. There is no substitute for turning over stones. Read the reports. Make the phone calls. Visit company offices and stay in regular contact with management.
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Emotional Quotient (EQ) is as important as Intelligence Quotient (IQ). Test and re-test objectivity. Allow time to distil emotion. Strive for calmness and balance when investing.
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One of the key questions is ‘What’s going to change?’ Share prices change as earnings change. Determine both at a macro and micro level: what is it that is likely to change and hence drive markets and consequently share prices.
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Knowing how much to invest is part way as important as knowing what to invest in. Building a diversified, well-risked portfolio is a relatively simpler task. The true challenge is to have the capacity and conviction to take a (substantially) overweight or underweight position when the rare ‘fat pitch’ arrives.
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Time frames and Investment Horizons. Today, a substantial amount of money is being managed on a very short term horizon. The opportunity is to take a different time horizon. In assessing an investment, the Manager is prepared to take a 2-5 year view.
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Avoiding a loss is superior to making a gain; From a loss of 50%, a return of 100% must be achieved with the remaining capital to return to par. Capital safety takes precedent over potential gain.
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The market is not a zero sum game. The share market is unitised pieces of a country’s economy. A growing economy translates into a growing stock market– a positive sum game. In a growing economy, the odds are stacked in favour of an investor. Accordingly, equities are the investment of choice over options, futures and other zero sum investments where no margin is afforded by a growing asset.
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The best investors know how to be wrong. Document key company risks and review these risks against company news flow and management updates, to identify problems as early as possible. Additionally, it is useful to record what ‘we would not want to see’ when investing.
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Investor Psychology. Investors derive confidence from other investors. A shareholder selling with conviction can lead other shareholders to sell. Aggressive selling / buying is not accepted as valid rationale in and of itself. Look beyond market moves and assess the rationale where possible but appreciate that there is an irrational aspect to investor psychology.
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The Market reverts to its long term mean over time. Take larger ‘positions’ the further the market deviates from the mean: like an elastic band, its return will be greater and swifter, the further it is stretched.
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Information Filters. Decision making is based on imperfect information; the available information is never complete, possibly inaccurate and constantly changing. The focus is to aggressively filter companies at the front end, to restrict the number of stocks that we intimately research and monitor. Whilst it is acknowledged that information is imperfect, the goal is to nonetheless have an information advantage – to ‘know more’ on the companies in which we invest.
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Meet the Katana Asset Management Team

Our portfolio managers have a combined direct investment experience well in excess of 100 years. Along with our philosophies and culture, this experience forms the backbone of our robust processes and approach, allowing the Katana team to have a sustainable competitive advantage.


Katana Asset Management Team Member Romano Sala Tenna

Romano Sala Tenna

B.Bus (Distinction), Grad Dip. Applied Investment Analysis,
ADA 1&2, F.Finsia

Portfolio Manager

20+ years experience

Romano commenced at Alcoa as a trainee programmer in 1989 and worked in a variety of roles including systems analyst. In 1996, Romano commenced work as a private client adviser at William Noall Ltd.

In 2000 Romano joined Johnson Taylor Potter which was subsequently assumed by Bell Securities to form Bell Potter Securities.

In 2003 Romano co-founded Katana Asset Management.

Romano is a past lead lecturer at Finsia and the ASX and is regularly quoted in the AFR, The Australian, SMH and a variety of national and local publications.

Skillset & Orientation
Bottom-up value investing: small-mid-large caps; fundamentally driven with technical analysis overlay; trend-following contrarian opportunities.

Katana Asset Management Team Member Brad Shallard

Brad Shallard

B.Bus (Accounting), CPA, Dip of FP, Grad Dip Applied Investment Analysis,
ADA 1&2, F.Finsia

Portfolio Manager

20+ years experience

Brad commenced as a tax accountant in 1994 and then transitioned into financial planning. In 1995, Brad moved into stockbroking at William Noall Ltd.

In 2001 Brad joined Johnson Taylor Potter which was subsequently assumed by Bell Securities to form Bell Potter Securities.

In 2003 Brad co-founded Katana Asset Management.

Skillset & Orientation
Large cap growth (business model and management) and market generated opportunities; high-conviction mid-cap.

Katana Asset Management Team Member Matthew Ward

Matthew Ward

B.Econ (Honours), CA, aCa, Harvard Management Leadership

Investment Manager

30+ years experience

Commenced May 2008.
During his 9 years in the accounting profession, Matthew completed a broad range of assignments for KPMG in London and Johannesburg before transitioning into investment evaluation and commercial advisory work in senior commercial management roles for large corporates. He has also held senior analytical and investment management roles in stockbroking and in funds management over the past 12 years in Australia.

Skillset & Orientation
Bottom-up value investing; high-conviction mid-cap and large-cap opportunities; industrial and financial services sectors; macro thematics.

Katana Asset Management Team Member Giuliano Sala Tenna

Giuliano Sala Tenna

B.Bus (Distinction), FFIN, Grad Dip. Applied Investment Analysis, GAICD

Investment Manager

15 years experience

Commenced January 2010.

Giuliano has worked in the Finance Industry for over 18 years in various fields including Credit, Business Development, Product Structuring, Funds Management, Investment and Corporate Advisory.

Giuliano has also completed the Graduate Diploma in Financial Planning at the Securities Institute of Australia, the Company Directors Course at the Australian Institute of Company Directors and is an ASX Derivatives Accredited Adviser.

Giuliano is regularly quoted in the AFR alongside appearing on the ABC News and Business Program.

Skillset & Orientation
Macro top-down, mid / large cap growth companies especially financial services and technology.

Katana Asset Management Team Member Stephen Thomas

Stephen Thomas

B.Sc. Royal school of Mines Imperial College London, MBA Cardiff Business school, AusIMM

Senior Analyst

25+ years experience

Commenced March 2014.
Stephen has worked in the Finance Industry for over 20 years as a resource analyst with a variety of companies including Hartleys, Rothschild Golden Arrow Fund and Bell Potter Securities Ltd; with a focus on small and middle sized mining companies. Prior to this he worked for 12 years as a Mine geologist at the nickel and gold operations of one of Australia’s leading mining companies.

Skillset & Orientation
High conviction bottom-up mining opportunities especially copper, gold, nickel and iron ore.

Katana Asset Management Team Member Christine Fernandez

Christine Fernandez

 

Administration Manager & Executive Assistant

Christine has more than 10 years of progressively responsible experience managing accounts and office personnel. She has a Bachelor of Education (Primary), an Advanced Diploma of Legal Studies and is currently close to completing her Bachelor of Commerce (Accounting).

Christine has spent 10 years in Office Manager and Assistant Accountant roles in a variety of industries, including legal, IT, mineral exploration, and earthmoving equipment. Her expertise includes streamlining functions, processes and procedures to provide an efficient and effective workplace environment.

Katana Asset Management Team Member Ashleigh Smith

Ashleigh Smith

 

Administrative Assistant

Ashleigh has 8 years’ experience in the Financial Services industry. She was a Dealers Assistant for 4 years to Bell Potter Securities Limited and provided support to advisers regarding account maintenance, trade settlements and portfolio reporting as well as liaising with trading desks.

Ashleigh has managed the administration team and created a busy and positive culture for all personnel. She holds a strong knowledge of equities and broking operations and brings an organised and proactive attitude to new support role.

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