WILDGEESE: EMIGRANT BUSINESS LEADERS ON OPPORTUNITIES ABROAD: Aoifinn Devitt, Founder of Clontarf Capital:FROM CLONTARF, Aoifinn Devitt began her international odyssey in 1995 when she moved to New York after graduating from Trinity College. Two years later, she moved on to Hong Kong. an experience that has given her an appetite for Asia.
Today, Devitt runs Clontarf Capital in London and, together with City Financial, operates an Asian investment fund which seeks to guide pension funds on how they should make investments in a notoriously volatile field.
In the past, many operated blind, believing the promises made by others. Much of Clontarf Capital’s work over the last two years has been to advise clients on where they went wrong with past investments, “to do the forensic trial”, as she puts it.
Wall Street fraudster Bernard Madoff, before his empire collapsed, was one of those studied by Devitt: “We wrote a paper on Madoff. We never invested. Our view was that it was too good to be true.
“Those sorts of returns could not be explained through the method that Madoff claimed to be using. Our view is that if we don’t understand how he got in those returns, we step away. There were due diligence shortfalls.
“There was an element of piggy-backing on the due diligence purportedly done by other groups. Remember some very big brand names were hit by Madoff. There was safety in numbers, a sort of , ‘well, if he is involved, he must have done due diligence; it must be reputable’ thing,” she said.
Nobody had done the spadework; but Clontarf did, slowly building relationships with pension funds to “understand what went wrong, to find out where the errors” were: “It wasn’t the most lucrative part of the business but in that climate very few things were.”
Relationship-building is slow, but the ties made then have been reflected in the client base Clontarf now enjoys as it works to build on its $50 million investment fund, piloted daily by four managers, including Cian O’Sullivan from Drimoleague in west Cork.
Having once been awed by hedge funds, pension funds and other institutional investors, she should not be so frightened as to never have anything to do with them again, Devitt believes, because the gains, if properly managed, are significant.
“We did not think it was in their interest to put back the clock, having diversified into to then go cold on it and never enter it again. Better to be re-educated and look at the new status quo and still be emboldened by their previous decision to diversify but in a more considered way,” she said. “We prefer fundamentals-driven managers, old-fashioned stock pickers. The computer is not generating the idea. They are finding the idea through talking to companies that they know, reading research and financial news,” she said.
Set up in 2006, Clontarf has now moved from just advising to managing assets: “It is a huge leap. The fund is not a huge amount, but it has critical mass, so we are out of the gates with very good clients.”
Management charges, at 0.8 per cent, are lower than the industry norm, while performance fees only kick in if the returns are greater than 10 per cent: “If we don’t deliver 10 per cent we are not doing our job and we don’t deserve to be paid for that. That is the way we see it,” she said.
“The aim is to build on that and perhaps do the same with a global fund, not just an Asian-focused fund.
“US, some European, but it certainly wouldn’t be a European-focused fund. I don’t think that there is enough selection or demand,” she said
Today, Devitt is married to a Canadian, Anthony Chow, whom she met during her time in Hong Kong. She is a mother of four daughters, aged from nine to three: Sorcha, Caoimhe, Ariadne and Esmee. “We ran out of Irish names after two.”
“The kids are citizens of the world. They lived in Boston for a bit when I was there. We have moved them around a little bit. The older they get, the harder it is,” she said, as she sat in her St James’s office in London.
The family is “tethered” to international cities, she believes. Both her home city of Dublin and her husband’s Vancouver are ruled out for now because neither is sufficiently strong in “front-office” financial services.
Ireland is highly regarded, though, in some financial fields: “English-speaking, robust, member of the EU, they provide good services at a good fee, well-educated. Back-office functions are flourishing. There aren’t many front offices as in London and there won’t be.
“The Irish lifestyle is probably better; public schools, for example, you don’t have to worry about private schools. It is really a nightmare.
“Irish lifestyle has a lot to commend it, if only in my case it had a better financial services front office. If it had, I would be based there”.
The pull of Asia, though, is strong, said Devitt, who is looking at setting up an office there: “Asia is where we are doing a lot of our work. Local presences are critical because it is a classic ‘Are you going to be the patsy at the table?’ argument.”
