How Disciplined Investing Delivered Consistent Returns

Emanuel Datt on the Australian Financial Review

Earlier this year, Emanuel Datt spoke with the Australian Financial Review about Datt Capital’s investment approach, portfolio positioning, and recent performance. The interview covered specific holdings, market conditions, and the firm’s evolution since opening to external investors in 2018.

This article builds on that conversation. Rather than reporting the news, it provides deeper context into how a fund manager thinks about risk, valuation, and capital allocation across market cycles.

From Personal Capital to a Disciplined Investment Strategy

Datt Capital began with personal capital, not an institutional mandate. Before funds management, Emanuel worked across private family businesses in commercial property, tourism, and healthcare. Investing initially focused on protecting family wealth through disciplined decision-making.

When the Absolute Return Fund opened to external investors in 2018, the philosophy remained unchanged: preserve capital first. Grow it through valuation discipline and independent thinking.

Early investments such as Afterpay and Adriatic Metals reflected this mindset. They were not momentum trades. Each position followed detailed assessment of business quality, balance sheet strength, and long-term value relative to price.

Performance Anchored in Process, Not Forecasting

The Absolute Return Fund runs a concentrated portfolio of up to 20 ASX-listed companies across market capitalisations. Position sizing, liquidity awareness, and downside protection remain central.

Over the past seven years, the fund delivered average annual returns of 18.9 percent net of fees (as of December 2025), according to Fund Monitors. Over the most recent 12-month period, returns reached 33 percent. Funds under management grew to approximately $120 million. These outcomes reflect repeatable process rather than reliance on market forecasts.

Important Information. This content reflects general information and the investment philosophy of Datt Capital. It does not constitute financial advice. Past performance is not a reliable indicator of future performance. Investors should consider their objectives and seek professional advice before investing.

Contrarian Capital Allocation When Risk Is Mispriced

Many insights discussed in the AFR interview relate to contrarian positioning. Datt Capital often invests when sentiment disconnects from fundamentals.

Monash IVF provides an example. After operational errors triggered a sharp sell-off, the investment case focused on underlying business resilience rather than headlines. The position was built after assessing error rates, market position, and long-term earnings power.

Subsequent share price recovery validated the risk assessment, though valuation discipline remained central to ongoing position management.

Managing Cycles Through Active Portfolio Decisions

Gold equities contributed meaningfully during the past year. Following the US election, the fund increased exposure to Australian gold producers where valuations remained attractive.

As the rally matured, exposure was reduced. This decision limited downside when prices reversed, while maintaining core holdings with longer-term growth profiles.

The approach remains consistent. Increase exposure when risk is mispriced. Reduce exposure when upside narrows.

Structural Growth Backed by Scarcity and Strategy

WA1 Resources represents a longer-term investment aligned with supply scarcity and strategic importance. Its niobium discovery in Western Australia carries significance due to global concentration of supply. Government recognition through major project status reinforced the investment thesis.

The portfolio also favours businesses with recurring revenue and operational stickiness. Kinatico reflects this preference, offering workforce compliance software with a diversified client base and low churn characteristics.

Industry Insight as a Source of Conviction

Certain positions benefit from lived industry experience. SiteMinder is one example. With deep familiarity in hotel operations, Emanuel understands how critical the platform becomes for accommodation providers.

Despite subdued recent share price performance, the long-term monetisation opportunity remains intact, supported by high customer reliance and embedded workflows.

Discipline Applies Equally to Exits

Risk management includes knowing when to exit. WiseTech Global was added following governance-related volatility, based on its mission-critical software and industry position.

When governance clarity failed to improve, the position was exited. Capital preservation took precedence over persistence.

Extending the Philosophy Through the Small Companies Fund

In October 2023, Datt Capital launched the Small Companies Fund. The strategy applies the same research discipline within a pure small-cap universe.

Since inception, the fund delivered average annual returns of 34.6 percent, materially outperforming the Small Ordinaries Index while maintaining low correlation to peers.

Important Information. This content reflects general information and the investment philosophy of Datt Capital. It does not constitute financial advice. Past performance is not a reliable indicator of future performance. Investors should consider their objectives and seek professional advice before investing.

What This Means for Investors

The AFR interview highlighted performance and specific holdings. This analysis explains the underlying thinking. Datt Capital focuses on valuation, risk control, and patience. Outcomes follow process rather than prediction. If you would like to learn more about Datt Capital, our investment philosophy, or our fund offerings, visit our website or contact our Head of Distribution, Daniel Liptak, at daniel@datt.com.au or on 0419 004 524.

Important Information. This content reflects general information and the investment philosophy of Datt Capital. It does not constitute financial advice. Past performance is not a reliable indicator of future performance. Investors should consider their objectives and seek professional advice before investing.