Dud tech investment was All Black for former Fairfax boss David Kirk and his Bailador fund

September 24th, 20176:58 am @

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No sport is more associated with the fine art of the sledge than cricket, but former All Blacks World Cup-winning captain (and CBD’s former boss at Fairfax Media) David Kirk showed some good form in the recent annual report of his tech investment fund, Bailador Technology Investments. 

Kirk, and his partner Paul Wilson – whose CV includes a stint at Lachlan Murdoch‘s private investment vehicle Illyria – listed the fund a few years back with some big ambitions as a hedge fund wannabe.

Bailador’s charter was to provide funding to “proven Internet-related businesses” in Australasia that fly beneath the radar of other investors.

The duo’s management vehicle launched with plans to pick up an annual fee of 1.75 per cent of the portfolio value payable on a quarterly basis, as well as an outperformance fee of 17.5 per cent if the return on the portfolio is above 8 per cent.

So it is understandable if Kirk was to get a little stroppy when one of the investments in their carefully crafted portfolio turns out to be a real dud. Maybe it was flying below the radar of other investors for a reason.

It looks like iPRO, which provides certification compliance verification for companies employing contractors on large work sites, was one hell of a dud.  

“The iPRO  technology was not as advanced as we had been led to believe in due diligence,” said the annual report.

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“We made a big mistake investing with the founder and CEO of iPRO. He was not straight with us and often operated contrary to board direction and other shareholders’ interests.” 

Bailador’s boys managed eventually to move this unnamed CEO out “but much of the damage was done”.

They tried to keep the show on the road, but failed.

“Persistent delays in product delivery led us finally to accept that it was not in the best interests of our shareholders to continue to fund the company.” 

And Kirk was not throwing a hospital pass to get himself out of a tight spot.  

“No one gets every investment right and as I am sure many of you will know from your own experience it is difficult to admit errors, take a loss and move on.”

While Kirk claimed writing down the investment to zero was not catastrophic for Bailador, it made up 6 per cent of the company’s portfolio at the time, and cannot have been good for investor returns. 

It would have hit Kirk and Wilson particularly hard. The dynamic duo took up their full entitlement of 5.6 million options last year for an equivalent amount of shares at $1 each. The share price was trading at 94.5¢ at the time. 

It closed on Friday at 83¢. 

Home comforts

Following the expose on Aveo’s retirement village business by CBD’s colleagues, Adele Ferguson and Sarah Danckert, there was a heartfelt letter sent to The Age – and published – about how good Aveo had been for the author’s parents. 

Murray Wilson of Rowville emphasised that “it wasn’t an investment decision, it was a lifestyle decision”. 

“When dad passed mum received an enormous amount of support from within the village. My sister and I are comforted in the knowledge that mum has care and support close at hand,” he said in the letter published on June 27. 

What Wilson did not say was that he is currently a senior executive at Aveo. In 2015 Wilson was shortlisted for the “prestigious manager of the year accolade in the Victorian State Awards,” Aveo reported. 

“I did correspond with the acting editor regarding my employment with Aveo,” Wilson told CBD. “But let me be clear I was writing as a son of residents at Aveo.” 

My colleagues at The Age forwarded their correspondence with Wilson the day after the letter was published, which is when readers pointed out his connection to Aveo. 

“Yes, I work for Aveo.  My parents’ decision to move into Aveo Roseville was made about 2 years before I joined the company,” Wilson said. 

“I want to point out I decided that I wanted to work at Aveo as a result of my family’s experience. I haven’t regretted a day since joining Aveo.”

Everyone would be surprised to know that Wilson was just as supportive of the company in a newsletter to residents at the time the reports surfaced. 

“Over the last week or so there has been a great deal of negative publicity about retirement living and more specifically about Aveo. I would not want to see anyone getting a journalist award for that work, enough said …. ” 

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

Article source: http://www.theage.com.au/business/cbd/dud-tech-investment-was-all-black-for-former-fairfax-boss-david-kirk-and-his-bailador-fund-20170920-gylbmx.html