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Management Track Record
Although examining the asset and assessing chance of success is important, it is also key to look at how a company's management has fared in the past. After all, if they have proven their competency and leadership at past companies, they likely to know how to lead another company to riches as well.
Let's look at why this is important below.
1. Demonstrating Strengths
Examining a management team's record at previous companies is a fantastic way to understand their strengths and what playbook they're likely to re-apply at their new venture. This helps investors understand what they can expect and what the end game can be. Common strengths to look out for:
- Restructuring and turnarounds
- Technical
- Partnerships and growth
- Takeover defence
- Positioning for takeovers
- In country connections and political environment management
Finding a pattern across these is difficult, yet highly valuable. Turaco Gold (ASX:TCG) is a good example of this. Their Managing Director Justin Tremain has a stellar record growing and positioning gold explorers for a takeover. He was previously Managing Director at Exore Resources (ASX:ERX) where he grew the company's Côte d'Ivoire gold resource to 530Koz before Perseus Mining offered to takeover the company for ~$60m.
Prior to this, he founded Renaissance Minerals in 2010 and served as Managing Director. By 2016, the company delivered a 1.13Moz gold resource at their Okvau deposit in Cambodia, before a takeover by Emerald Resources NL was launched.
From his track record at Renaissance and Exore, we can likely see that he is strong at growing gold exploration companies before lining up a takeover offer. This can give investors visibility over his likely game plan at Turaco too.
On the other side of the market, we can also see executives like Bevan Slattery and his value as an investor/director. He previously founded successful tech companies such as PIPE Networks, NextDC, Superloop and Megaport. We can infer from this track record that he is highly experienced and possesses an extensive network of industry contacts. This value is immediately recognised by the market when he invests in any listed company, such as IntelliHR in 2020.
On the other side of the market, we can also see executives like Bevan Slattery and his value as an investor/director. He previously founded successful tech companies such as PIPE Networks, NextDC, Superloop and Megaport. We can infer from this track record that he is highly experienced and possesses an extensive network of industry contacts. This value is immediately recognised by the market when he invests in any listed company, such as IntelliHR in 2020.
The day the news was announced on the market, their share price rose from 7.3c as of the last close, to an intra-day high of over 20c. IntelliHR was later taken-over by Humanforce for 24c per share in 2023.
2. How shareholders have been valued
Examining management's past record also reveals a lot into how they are likely to treat shareholders now. Specifically, if they are known to prioritise shareholders in things like capital raises, in person events and the like, they're also likely to have shareholders in mind at following ventures.
This is quite difficult to recognise as it will involve a careful look not just the final outcome of their previous company (which was the focus of the first part of this page).
This is quite difficult to recognise as it will involve a careful look not just the final outcome of their previous company (which was the focus of the first part of this page).
Closing considerations
Although remembered for probably more important acts, Winston Churchill was also quoted saying “Those that fail to learn from history are doomed to repeat it". This lesson definitely applies to investing to, and thus we should force ourselves to examine the historical dealings, achievements and actions of management to foresee how they are likely to govern in the present.
Follow our free updates below.
Although remembered for probably more important acts, Winston Churchill was also quoted saying “Those that fail to learn from history are doomed to repeat it". This lesson definitely applies to investing to, and thus we should force ourselves to examine the historical dealings, achievements and actions of management to foresee how they are likely to govern in the present.
Follow our free updates below.
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