It’s all about data and quantitative analysis

15 November 2019

Coolabah’s co-founder, Darren Harvey, had a fascination with the stock market from a young age and has now been named one of FE fundinfo’s Alpha Managers.
Harvey started investing in the stock market during high school after reading a weekly column about the broader investment market in the newspaper.

Harvey started in investment banking in a derivatives role in Deutsche Bank, and then moved onto being a trader in Sydney and London. After trading his own money in 2001 at a family office, he co-founded Coolabah Capital in 2011 with Christopher Joye.

The fund manager believes that time and effort has helped him achieve consistently high returns.

“You need an edge and strategy when you’re a trader or investor. It’s the ability to pick out and have an edge to beat the market and being able to control your emotions,” he said.

“I spend a lot of time around screens, reading, analysing, working to help synthesise the right conclusions as quickly as possible.”

He noted that one of the biggest challenges in investing was that markets had become more efficient and it was hard to manage these markets when unexpected events happened, such as 9/11 terrorist attacks or Fukushima.

“To minimise risks that come from these events that are out of our control I always participate in liquid markets. Never be in illiquid positions because if a one-off event happens you want access to your investments,” he said.

Harvey said his investment philosophy was about “analytics and doing the sums and numbers”. However, with the amount of data that everyone had access to, now it was about working with the data in the best possible way. He said Coolabah had data scientists who helped the investment team look for patterns and advantages.

Harvey said that advisers should look for an active fixed income manager somebody that does great quantitative analysis.

“Look at finding a team that has a great portfolio manager, analysts and great quantitative analysts. This will help give great top down bottom up analysis that look at bonds and investments, and consistent returns with low volatility,” he said

Despite being named an Alpha Manager and has made his mark in the funds management world, Harvey said that while he liked markets, the interactivity and the problem solving it brought, he was not obsessed with money. 

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