1 00:00:05,559 --> 00:00:07,880 Speaker 1: Welcome to the Fear and Greed Business Interview. I'm sure 2 00:00:07,880 --> 00:00:10,680 Speaker 1: in ailman. Chris Caffeo is one of the most well 3 00:00:10,720 --> 00:00:13,920 Speaker 1: known figures in Australian investing. Throughout his career he's held 4 00:00:14,000 --> 00:00:17,599 Speaker 1: roles including Chief Executive of Colonial First Staid Investments and 5 00:00:17,720 --> 00:00:20,919 Speaker 1: Challenger and chair of Unisuper. But at the same time 6 00:00:20,960 --> 00:00:24,239 Speaker 1: he's also had a strong belief in the need for philanthropy. 7 00:00:24,600 --> 00:00:29,160 Speaker 1: In twenty ten, Chris founded Australian Philanthropic Services, which is 8 00:00:29,200 --> 00:00:33,040 Speaker 1: now the leading independent not for profit philanthropic service organization 9 00:00:33,200 --> 00:00:36,400 Speaker 1: in the country. He also founded Third Link Investment Managers, 10 00:00:36,520 --> 00:00:40,440 Speaker 1: where one hundred percent of management and performance fees are 11 00:00:40,479 --> 00:00:44,320 Speaker 1: rebated to charity. That figure has almost reached twenty two 12 00:00:44,360 --> 00:00:47,360 Speaker 1: billion dollars worth of rebates. Chris Cuffeo, Welcome to Fear 13 00:00:47,400 --> 00:00:47,760 Speaker 1: and Greed. 14 00:00:48,320 --> 00:00:48,720 Speaker 2: Thank you. 15 00:00:49,760 --> 00:00:53,280 Speaker 1: Why have you become so philanthropic? And perhaps you've always 16 00:00:53,280 --> 00:00:58,040 Speaker 1: been philanthropic, but this seems to be your big motivation nowadays. 17 00:00:59,000 --> 00:01:01,440 Speaker 2: Look, I think I've probably always was. I suspect a 18 00:01:01,440 --> 00:01:03,320 Speaker 2: lot of people are, but they don't always have the 19 00:01:03,360 --> 00:01:06,639 Speaker 2: time with the means. But I certainly became a little 20 00:01:06,720 --> 00:01:09,440 Speaker 2: more famous at a point in time than I wanted 21 00:01:09,480 --> 00:01:12,800 Speaker 2: to be. I'd rather have stayed nice in private, but 22 00:01:12,840 --> 00:01:14,720 Speaker 2: that wasn't the case. So I thought, well, I might 23 00:01:14,720 --> 00:01:16,720 Speaker 2: as well use this fame and see if I can 24 00:01:17,280 --> 00:01:19,680 Speaker 2: do a bit of good with it. So I've done 25 00:01:19,680 --> 00:01:22,520 Speaker 2: a number of things over the years to try and 26 00:01:22,640 --> 00:01:27,200 Speaker 2: combine investment with philanthropy. So use my base skills to 27 00:01:27,360 --> 00:01:30,160 Speaker 2: increase philanthropy in Australia. 28 00:01:30,800 --> 00:01:32,319 Speaker 1: And I don't really want to go into history, but 29 00:01:32,560 --> 00:01:35,320 Speaker 1: you've got good press and bad press at different times 30 00:01:35,319 --> 00:01:37,800 Speaker 1: in your career, and you were a really well known 31 00:01:37,840 --> 00:01:40,880 Speaker 1: fund manager. I have heard you speak before and you 32 00:01:40,959 --> 00:01:42,960 Speaker 1: just said at one point and you kind of were 33 00:01:42,959 --> 00:01:44,759 Speaker 1: a bit jack of the whole lot because you didn't 34 00:01:44,760 --> 00:01:47,560 Speaker 1: want a profile, but kind of at one point you thought, actually, 35 00:01:47,600 --> 00:01:49,440 Speaker 1: if I'm going to have a profile and I'm stuck 36 00:01:49,440 --> 00:01:52,200 Speaker 1: with it, why don't I use it. Isn't that the story? 37 00:01:52,640 --> 00:01:55,080 Speaker 2: Yeah, that's pretty much the story. And the bad press 38 00:01:55,200 --> 00:02:00,360 Speaker 2: was wrong press, it was missreported. But as time went on, 39 00:02:00,400 --> 00:02:03,800 Speaker 2: people found out the truth and I think that's allowed 40 00:02:03,800 --> 00:02:05,600 Speaker 2: me to open a lot of doors and do a 41 00:02:05,600 --> 00:02:09,560 Speaker 2: lot of things. So I really have just turned that 42 00:02:10,160 --> 00:02:16,160 Speaker 2: into a useful profile in helping charity So the first 43 00:02:16,240 --> 00:02:18,880 Speaker 2: one of those was, as you mentioned in the intro, 44 00:02:19,400 --> 00:02:23,400 Speaker 2: Third Link Growth Fund, was that the fund I put 45 00:02:23,440 --> 00:02:28,520 Speaker 2: together an Australian equity fund of funds where I wanted 46 00:02:28,560 --> 00:02:32,480 Speaker 2: to give investors in the fund, so it was promoted 47 00:02:32,520 --> 00:02:35,680 Speaker 2: to the public. It's currently about one hundred and seventy 48 00:02:35,720 --> 00:02:39,760 Speaker 2: million dollars in size. It's an Australian equities investment that 49 00:02:39,800 --> 00:02:44,240 Speaker 2: anyone can go into. It's a retail product and the 50 00:02:44,320 --> 00:02:47,480 Speaker 2: underlying fund managers I use because it's a fund of funds, 51 00:02:47,720 --> 00:02:51,639 Speaker 2: they've all agreed to work for no fee and up 52 00:02:51,680 --> 00:02:55,080 Speaker 2: the top of that, my fund charges a fee, but 53 00:02:55,160 --> 00:02:57,160 Speaker 2: that fee all goes to charity. 54 00:02:57,520 --> 00:03:03,040 Speaker 1: Okay, so that twenty two million dollars. How many years 55 00:03:03,080 --> 00:03:04,400 Speaker 1: and where does the money go to? How do you 56 00:03:04,400 --> 00:03:05,160 Speaker 1: pick your charities? 57 00:03:05,680 --> 00:03:08,120 Speaker 2: Yeah, I've been running the fund for about sixteen years. 58 00:03:08,520 --> 00:03:10,880 Speaker 2: It started small. It's a reasonable size now so that 59 00:03:11,000 --> 00:03:14,640 Speaker 2: currently peels off about giveaway around about one point seven 60 00:03:14,680 --> 00:03:18,040 Speaker 2: million dollars a year. I choose the charities based on 61 00:03:18,520 --> 00:03:21,920 Speaker 2: sometimes it's a theme. For many years, it's been helping 62 00:03:22,800 --> 00:03:26,040 Speaker 2: kids who've not had a grade lot in life. It 63 00:03:26,120 --> 00:03:29,239 Speaker 2: might be Indigenous kids who might be unemployed and my 64 00:03:29,480 --> 00:03:35,640 Speaker 2: kids suffering mental health, but also help other organizations. Gratton 65 00:03:35,720 --> 00:03:40,320 Speaker 2: Institute has been a favorite, the Ethics Institute, but quite 66 00:03:40,320 --> 00:03:42,120 Speaker 2: a few. They're all shown on the website as a 67 00:03:42,200 --> 00:03:45,000 Speaker 2: comprehensive website for third Link Growth Fun and shows all 68 00:03:45,040 --> 00:03:47,880 Speaker 2: the charities supported over the years. They tend to be 69 00:03:48,320 --> 00:03:51,880 Speaker 2: small to medium sized charities who really need the funding. 70 00:03:52,320 --> 00:03:57,880 Speaker 1: Yeah, okay, estraining philanthropic services then that came first, though, 71 00:03:58,320 --> 00:04:00,360 Speaker 1: why did you sit down that one up? 72 00:04:00,600 --> 00:04:00,720 Speaker 2: Well? 73 00:04:00,760 --> 00:04:02,040 Speaker 1: How does it work? I think I know why he 74 00:04:02,080 --> 00:04:03,400 Speaker 1: set it up, but how does it work? 75 00:04:03,840 --> 00:04:06,600 Speaker 2: Yeah? Australian film and the stropic services actually came slightly 76 00:04:06,640 --> 00:04:10,480 Speaker 2: after thirdly in Growth Fund, but they were similar. But 77 00:04:10,520 --> 00:04:13,640 Speaker 2: I had a view that there was a particular type 78 00:04:13,680 --> 00:04:19,440 Speaker 2: of filmansthropic vehicle called an ancillary fund, private ancillary fund 79 00:04:19,480 --> 00:04:22,680 Speaker 2: or public ancillary fund that people who wanted to give 80 00:04:22,720 --> 00:04:27,440 Speaker 2: money away could utilize and give money away perhaps more 81 00:04:27,480 --> 00:04:33,840 Speaker 2: efficiently and effectively. But they were pretty much unknown as 82 00:04:33,880 --> 00:04:37,800 Speaker 2: an unknown piece of law tax law. And I set 83 00:04:37,839 --> 00:04:40,919 Speaker 2: up a private ancillary fund myself in two thousand and 84 00:04:41,240 --> 00:04:43,520 Speaker 2: seven I think it was, and it was a pretty clunky, 85 00:04:43,560 --> 00:04:47,160 Speaker 2: horrible experience. So I thought, while set up an organization 86 00:04:47,440 --> 00:04:50,960 Speaker 2: that would be a charity itself, but the organization would 87 00:04:51,000 --> 00:04:56,159 Speaker 2: focus on helping philanthropists. People with one who wanted to 88 00:04:56,160 --> 00:04:59,880 Speaker 2: give money away, help the philanthropists set up better structures 89 00:05:00,040 --> 00:05:03,479 Speaker 2: and give perhaps give more away over time. And you know, 90 00:05:03,640 --> 00:05:08,520 Speaker 2: roll the clock forward twelve years, thirteen years. We now 91 00:05:08,720 --> 00:05:13,120 Speaker 2: administer and these ancillary funds for just on one thousand 92 00:05:13,160 --> 00:05:16,840 Speaker 2: clients we have. We look after about two point three 93 00:05:16,920 --> 00:05:20,720 Speaker 2: billion dollars on behalf of those clients, and they give 94 00:05:20,760 --> 00:05:23,520 Speaker 2: away around one hundred and sixty million dollars a year 95 00:05:23,560 --> 00:05:28,120 Speaker 2: and increasing. So the things working well. It's working really well, 96 00:05:28,240 --> 00:05:31,160 Speaker 2: and it's not philanthropists sounds like something for the rich. 97 00:05:31,200 --> 00:05:33,600 Speaker 2: It's not always the rich. Some people have got a 98 00:05:33,600 --> 00:05:35,880 Speaker 2: lot of money, but others can start these structures with 99 00:05:36,000 --> 00:05:37,720 Speaker 2: as little as fifty thousand dollars. 100 00:05:38,400 --> 00:05:42,200 Speaker 1: Say with me, Chris, we'll be back in a minute. 101 00:05:47,400 --> 00:05:52,479 Speaker 1: I'm speaking to Chris cuff Ao Miniestra. Compared to the US, 102 00:05:52,480 --> 00:05:55,360 Speaker 1: at least Australia doesn't have that history of philanthropy. At 103 00:05:55,360 --> 00:05:57,640 Speaker 1: one point is to put the BTW rich is together. 104 00:05:57,680 --> 00:05:59,760 Speaker 1: And I remember Dick Smith being very upset at the 105 00:05:59,760 --> 00:06:02,240 Speaker 1: time because he said you should actually have a list 106 00:06:02,279 --> 00:06:05,200 Speaker 1: of philanthropists. The thing is most people didn't want to 107 00:06:05,240 --> 00:06:08,000 Speaker 1: tell us. Most people don't want to say how much 108 00:06:08,040 --> 00:06:10,599 Speaker 1: money they're giving away. Is that a good or a 109 00:06:10,640 --> 00:06:14,640 Speaker 1: bad thing? How do we encourage an environment of philanthropy? 110 00:06:15,240 --> 00:06:17,240 Speaker 2: Well, I don't know whether it's good or bad that 111 00:06:17,320 --> 00:06:19,880 Speaker 2: if you want to talk about it a lot. I 112 00:06:19,920 --> 00:06:23,560 Speaker 2: think certainly in the US as culture of you know, 113 00:06:23,839 --> 00:06:26,919 Speaker 2: you talk about which foundations you might support. The US 114 00:06:27,160 --> 00:06:29,920 Speaker 2: was you know a lot of the big charitable foundations 115 00:06:30,000 --> 00:06:33,719 Speaker 2: of fancy names that have been there for decades and 116 00:06:33,760 --> 00:06:37,760 Speaker 2: decades and decades. The Ford Foundation as an example, or 117 00:06:37,760 --> 00:06:41,880 Speaker 2: the Gage Foundation. These are big things. People like talking 118 00:06:41,880 --> 00:06:44,680 Speaker 2: about those things in America because they've grown up with it. 119 00:06:44,880 --> 00:06:47,960 Speaker 2: But I think wealth in Australia is still relatively new. 120 00:06:48,320 --> 00:06:51,680 Speaker 2: These structures I'm talking about ancillary funds, they haven't been 121 00:06:51,720 --> 00:06:54,440 Speaker 2: around that long and they are a much better way 122 00:06:54,600 --> 00:06:59,120 Speaker 2: I believe to give and it's really not being well 123 00:06:59,160 --> 00:07:02,000 Speaker 2: known amongst well author advisors all the warthings. So that's 124 00:07:02,160 --> 00:07:06,480 Speaker 2: part of my rationale to set up Australian Film throopic 125 00:07:06,600 --> 00:07:09,479 Speaker 2: Services and get the word out there. I mean we're 126 00:07:10,680 --> 00:07:13,240 Speaker 2: from a fairly you know. We started with nothing. We're 127 00:07:13,240 --> 00:07:16,320 Speaker 2: now the biggest charitable player in Australia and setting these 128 00:07:16,320 --> 00:07:19,200 Speaker 2: things up and administering them, and we've really only just 129 00:07:19,240 --> 00:07:21,880 Speaker 2: got started. So I'm confident the future will see a 130 00:07:21,880 --> 00:07:24,040 Speaker 2: lot more philanspy in Australia. 131 00:07:24,160 --> 00:07:26,640 Speaker 1: How do you bring some of the stuff that we've 132 00:07:26,640 --> 00:07:30,200 Speaker 1: been reading about? You said asex listed companies, who invest 133 00:07:30,240 --> 00:07:34,040 Speaker 1: insex listed companies in the first energy and we hear 134 00:07:34,200 --> 00:07:38,920 Speaker 1: lots about corporate culture. There's some really high profile examples 135 00:07:39,200 --> 00:07:42,320 Speaker 1: at the moment running through the media without commenting on 136 00:07:42,400 --> 00:07:46,679 Speaker 1: them specifically. How do you kind of choose your companies? 137 00:07:46,720 --> 00:07:50,600 Speaker 1: How do you think about stuff like corporate culture, like 138 00:07:51,280 --> 00:07:56,160 Speaker 1: the renewable energy shift, those kind of mega themes. Sometimes 139 00:07:56,320 --> 00:07:59,400 Speaker 1: I wonder do they matter or not? Is it just 140 00:07:59,480 --> 00:08:01,920 Speaker 1: all about the more money you make for charity the better? 141 00:08:03,080 --> 00:08:05,960 Speaker 2: Well? I mentioned that within the fund I run Thirdly 142 00:08:06,120 --> 00:08:09,480 Speaker 2: Growth Fund again, which is an Australian equity fund. I 143 00:08:09,640 --> 00:08:14,560 Speaker 2: use underlying investment managers, so I'm not selecting stocks directly myself, 144 00:08:14,760 --> 00:08:17,960 Speaker 2: but the fund managers I select, which by the way, 145 00:08:18,000 --> 00:08:21,680 Speaker 2: are based on merit and years of me being in 146 00:08:21,680 --> 00:08:23,880 Speaker 2: this industry and thinking I have some idea of who 147 00:08:23,880 --> 00:08:27,960 Speaker 2: does a good job. They in turn price all those things, 148 00:08:28,000 --> 00:08:31,040 Speaker 2: so they take into account things to do with the 149 00:08:32,000 --> 00:08:37,960 Speaker 2: ESG governance, the environment, society governance. They take into account 150 00:08:37,960 --> 00:08:41,760 Speaker 2: those things when they price the stock or climate change 151 00:08:41,920 --> 00:08:44,040 Speaker 2: or so that's just part of the process. 152 00:08:45,160 --> 00:08:48,160 Speaker 1: Okay, what would you like to achieve? Do you have 153 00:08:48,200 --> 00:08:52,680 Speaker 1: a goal in terms of how many philanthropists, how much 154 00:08:52,760 --> 00:08:55,520 Speaker 1: money something or other? A goalpats that in five or 155 00:08:55,559 --> 00:08:57,640 Speaker 1: ten years you could sort of walk away from it 156 00:08:57,679 --> 00:09:00,520 Speaker 1: and say, hey, this is what we did well. 157 00:09:01,760 --> 00:09:04,880 Speaker 2: It's interesting question with Thirdly and Growth Fund. To start with, 158 00:09:05,280 --> 00:09:08,160 Speaker 2: I want to achieve a really great investment for investors. 159 00:09:08,320 --> 00:09:10,840 Speaker 2: So that is one of the few funds in Australia 160 00:09:10,880 --> 00:09:14,680 Speaker 2: that's actually beaten the All Ordinaries Index, the big index 161 00:09:15,600 --> 00:09:19,080 Speaker 2: over the life of the fund. Hardly any fund managers 162 00:09:19,320 --> 00:09:22,040 Speaker 2: do that. So I'm giving people a very good investment 163 00:09:22,080 --> 00:09:24,800 Speaker 2: to begin with. If I can keep giving away a 164 00:09:24,800 --> 00:09:28,320 Speaker 2: couple of million dollars a year to charities, I will 165 00:09:28,360 --> 00:09:32,440 Speaker 2: do that for as long as I'm cognitively able, and 166 00:09:32,480 --> 00:09:34,920 Speaker 2: the underlying fund managers are happy to keep doing it, 167 00:09:34,960 --> 00:09:37,240 Speaker 2: and I think they are really pressed with it. I mean, 168 00:09:37,280 --> 00:09:40,320 Speaker 2: it's great to be able to give a couple of 169 00:09:40,320 --> 00:09:43,200 Speaker 2: million dollars years, like a community that we're all enjoying 170 00:09:43,280 --> 00:09:48,360 Speaker 2: being part of, frustrating philanthropic services that that organization. My 171 00:09:48,520 --> 00:09:53,520 Speaker 2: goal there is that these ancillary funds become as popular 172 00:09:53,600 --> 00:09:57,800 Speaker 2: as for wealth advisors, as talking about self many superfunds 173 00:09:58,160 --> 00:10:02,240 Speaker 2: or supermanuation in general, that it becomes into the very 174 00:10:02,320 --> 00:10:06,120 Speaker 2: common vernacular to talk about philanthropy as part of a 175 00:10:06,160 --> 00:10:12,360 Speaker 2: person's financial planning needs. And the third organization we haven't mentioned. 176 00:10:12,400 --> 00:10:17,600 Speaker 2: I share a listed company called Hearts and Minds Investments Limited. 177 00:10:18,040 --> 00:10:22,360 Speaker 2: This is on Australian Stock Exchange ticker HM one, and 178 00:10:22,400 --> 00:10:25,040 Speaker 2: that gives away a percent and a half of its 179 00:10:25,080 --> 00:10:28,920 Speaker 2: assets a year to medical research in Australia. So we're 180 00:10:28,960 --> 00:10:32,000 Speaker 2: now giving away very significant amounts of money. I think 181 00:10:32,000 --> 00:10:34,920 Speaker 2: we're up to about sixty million dollars to medical research. 182 00:10:35,360 --> 00:10:39,560 Speaker 2: That's fantastic. The common theme with all these things that 183 00:10:39,559 --> 00:10:43,360 Speaker 2: I'm involved with is there's a fair investment side to 184 00:10:45,000 --> 00:10:48,480 Speaker 2: each of these activities as well, and that's what I enjoy. 185 00:10:48,559 --> 00:10:51,640 Speaker 2: I can use the base skill and help society and 186 00:10:51,960 --> 00:10:55,280 Speaker 2: hopefully through the things I do that we become one 187 00:10:55,280 --> 00:10:59,360 Speaker 2: of the bigger contributors to the charitable world. 188 00:11:00,080 --> 00:11:01,600 Speaker 1: Chris, thank you for talking to Fear and Greed. 189 00:11:01,960 --> 00:11:02,320 Speaker 2: Thank you. 190 00:11:02,920 --> 00:11:05,880 Speaker 1: That was Chris caff Ao, chairman and founder of Australian 191 00:11:05,920 --> 00:11:10,320 Speaker 1: Philanthropic Services and the founding director and portfolio manager of 192 00:11:10,440 --> 00:11:13,559 Speaker 1: Third Link Growth Fund. Of course, if you're making investments, 193 00:11:13,600 --> 00:11:15,880 Speaker 1: always seek your own personal advice. We are not an 194 00:11:15,920 --> 00:11:18,880 Speaker 1: investment podcast. This is the Fear and Greed Business Interview. 195 00:11:19,000 --> 00:11:21,040 Speaker 1: Join us every morning for the full episode of Fear 196 00:11:21,080 --> 00:11:23,720 Speaker 1: and Greed Business Years for people who make their own decisions. 197 00:11:23,760 --> 00:11:26,680 Speaker 1: I'm Sean almar Enjoy your day.