No sport is more associated with the fine art of the sledge than cricket, but former All Blacks World Cup-winning captain 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.
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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.
BEN RUSHTON/FAIRFAX MEDIA
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.
“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 A$1 each. The share price was trading at 94.5c at the time.
It closed on Friday at 83c.
– This story first appeared in the Sydney Morning Herald’s CBD column
– Sydney Morning Herald