Veteran investor Peter Cooper says his billion-dollar fund management firm has learnt from hard lessons and honest observations – and his performance speaks for itself.

By Peter Cooper
Source: Financial Review
April 28, 2025

First, let’s be blunt; equities investing is a Darwinian sport. The scoreboard is a sharemarket, it is unforgiving, and investors have nowhere to hide.

Since the day we set up Cooper Investors in 2001, scores of Australian equities investment firms have hung out their shingle, only to disappear into the history books. Cooper Investors was almost one of them at the outset.

We began in a tiny, windowless office that we had sublet a month before the September 11, 2001, attacks. Along with no windows, we had no clients and faced global markets in freefall. The name Cooper Investors was chosen because we wanted to move away from asset management, a buzzword of the time, and towards an investor mindset, to co-invest alongside our clients.

With hard work, we soon found backers, including from within Australia’s then-fledgling industry superannuation funds.

Since then, we have worked through global crises in the United States, Asia and Europe, financial meltdowns such as the global financial crisis, bond market crashes, a pandemic, and now, the clash of global superpowers and trade wars. Each gave us our share of bad days and sleepless nights.

In the midst of the GFC, our Brunswick Fund contracted from $100 million to less than $30 million, as panicked investors pulled their money. What a miss. Brunswick is now a billion-dollar fund that has returned 12.6 per cent a year since inception and has a-20-year track record of success.

It is just one example of the most instructive experience that has come from being on the playing field of equities investing for three decades: observing the human tendency to fall for emotionally induced distortions of truth and reality.

At Cooper Investors, we call this the “hubris to humility” cycle – an ever-present force in investor behaviour, boardrooms, governments, regulators, and management teams. It is the herd instinct, driven by the fear of being alone, or the lure of dollar incentives that push people to overreach.

Cooper Investors started as a firm that invested for clients, including industry funds, after September 11. Those industry funds, as has been well reported within the pages of The Australian Financial Review, have shifted towards internal management and passive strategies.

I respect that. As they have developed and moved forward, so have we.

Fifteen years ago, the Australian Equities Fund, where most of our industry fund clients had coalesced, represented 98 per cent of our firm. Since then, we have built a suite of differentiated, compelling investment strategies and a private client book from $50 million to about $3 billion.

Just as the Brunswick Fund innovated, now the Endeavour, Park Road and Family & Founder funds are innovating. As a result, Cooper Investors’ private book consists of more than 2000 clients, including many of the country’s leading wealth managers, charitable endowments, family offices and individual high-net-worth professional investors.

Industry funds now account for less than 20 per cent of our revenues. This change has played out publicly, but the news of the past week about three industry funds pulling mandates from the Australian Equities Fund is something we have adapted and prepared for.

That’s the thing about Darwinism. If you don’t evolve, you die.

“By my calculations, we have weathered three major underperformance cycles in the past three decades – each followed by strong recovery.”

That doesn’t mean that recent challenges have not tested us. Performance issues have triggered necessary leadership changes, and every portfolio team change in the past 18 months has led to improved performance. For example, as of March 31, Cooper Investors’ global fund (unhedged) is up 18 per cent, significantly outperforming benchmarks.

But the Australian Equities Fund is down 8.3 per cent this financial year to date. A core tenet of Cooper Investors is “focusing on the signal not the noise” and, while some of the reported challenges have been real, some have just been noise.

Among those, I would count a handful of back-office management changes, and commentary about my personal life and association with The Art of Living, a humanitarian organisation my wife and I support wholeheartedly. (Yes, I meditate. And, yes, I reckon it makes me more focused. But don’t believe me, Google it. Much smarter brains than mine in the business and investment world choose to meditate, Ray Dalio being one).

Also among the noise is a suggestion that there are issues of governance and culture at Cooper Investors. Over 24 years, Cooper Investors has had zero insurance claims, no compliance breaches of any significance, and zero external audit failures or material concerns.

That is the result of building a strong firm “structured to be lucky”, as we say internally, and a stewardship team that has overseen this achievement along with strong systems, and risk management. That’s good governance.

By my calculations, we have weathered three major underperformance cycles in the past three decades – each followed by strong recovery. I believe this time will be no different. Where Cooper Investors stands today is that we have learnt from hard lessons and honest observations. Have we made mistakes? Yes. Have I made mistakes? Yes.

Have we fixed them all? Well, that’s the thing about being an equities investor. The public scoreboard will tell us how we are going every day, and there will be absolutely nowhere to hide.

Peter Cooper is the founder and chief investment officer at Cooper Investors.