Airtree Ventures co-founder Daniel Petre is tipping some of his personal wealth into fund manager Savana Active ETFs, a Sydney-based firm hoping to take on sector giants such as Betashares and BlackRock’s iShares.
Petre’s investment valued Savana at $20 million and comes as early investors Riverbend Investments and Centrestone Capital topped up their existing stakes.
Savana, founded by former Merrill Lynch banker Stephen Duchesne and John Atkinson, uses machine intelligence instead of traditional analyst teams to value about 60,000 listed companies every day.
Petre – whose Airtree Ventures has previously backed the likes of design software giant Canva, Ozempic seller Eucalyptus, and financial services company Airwallex – said the fund management industry had been resistant to technological disruption because, outside exchange-traded funds, it is a “personality” game.
“Despite decades of innovation in other sectors, much of the industry still relies on traditional, human-led investment processes,” Petre told Street Talk.
Savana’s approach combines multiple valuation models to identify situations where the market prices has diverged significantly from a company’s fundamentals.
“This is quite scalable because you are not relying on some guy who can ‘read the market’ or a small team of analysts, but rather a piece of tech that can absorb tons of data and apply its methodology,” he said. “Humans are not a limiting factor.”
The firm, run out of an old church in Surry Hills, Sydney, says its algorithm-based approach removes the emotional and behavioural bias inherent in traditional stock-picking.
Its US small-caps active exchange-traded fund is returning 11.96 per cent a year after fees since inception, as at September 30, outperforming the S&P Small Cap 600 benchmark by 7.9 per cent.
By Sarah Thompson, Kanika Sood and Angira Bharadwaj
