Gabriel Radzyminski rejects the suggestion he is a green mailer. Rather, says Radzyminski, he is an “activist investor”.
“Activism is the logical extension of value investing,” says Radzyminski. “We always look for solutions available to all shareholders, that’s a big difference to a green mailer,” he adds with practiced ease.
Radzyminski founded Sandon Capital five years ago. Sandon’s fund, whose capital he won’t disclose, has had compound annual returns of 12.7 per cent for the last 3½ years by investing and agitating for change in companies typically with market values of less than $200 million. The 42-year-old works with Sir Ron Brierley and describes him “as a titan of this game”.
Radzyminski advised Wilson Asset Management and Cadence Capital on their successful action to prevent RAMS Home Loans founder John Kinghorn taking RAMS' successor company private. Wilson and Cadence forced Kinghorn to pay fully franked dividends as he wound down RAMS home mortgage book.
Wilson Asset Management also hired Radzyminski to help it force Alesco Corp to pay a special dividend and get the Alesco board to recommend the Dulux Group’s hostile takeover offer. “Geoff [Wilson] will fight to protect his shareholder interests,” says Radzyminski whose somewhat dingy office abuts Wilson’s on Sydney’s Macquarie Street.
Born and bred in Sydney’s eastern suburbs, Radzyminski attended Waverley College and the University of New South Wales. During his undergraduate degree Radzyminski did an internship for a NSW member of parliament. There he discovered that people who took the time to write about their grievances were taken seriously. “There is no point in grumbling and doing nothing about it,” says Radzyminski.
After completing a Masters of Commerce, Radzyminski joined the administration department of fund manager Colonial First State. He then joined Godfrey Pembroke as an equity analyst. After 18 months Radzyminski broke away with a group of former Pembroke people to form Berkley Group. Berkley became Centric Wealth, which advises the rich where to put their money. In 2008 Radzyminski started Sandon.
Pratham Ravi, who joined Sandon this year as an analyst, works alongside Radzyminski’s cluttered desk where a Bloomberg terminal sits amid piles of papers and post-it notes. “I know where everything is,” says Radzyminski. “I’ve never lost any information.”
Outside Radzyminski‘s glass partition workspace sits a server that beeps incessantly because it has an uninterruptable power supply. “This game is about information and the ability to understand the disparate pieces of information,” says Radzyminski, who never throws away a news article or a company document once it gets into his possession.
“Many would find what we do tedious,” says Radzyminski. “We read company constitutions to understand what we cannot and can do.”
That may mean spending many days reading through company documents before he finds an opportunity for an investment that “represents value” and “where we can extract and realise value”. Less than one in 20 companies Sandon analyses through discounted cash flow models or enterprise value metrics will be examined seriously. Far fewer will be the subject of Sandon’s “activist” agitation.
“Our initial approach is always private but the responses we typically receive means we’ve got to be able to make things public,” says Radzyminski.