The Fundamentals Podcast 2025 - Episode 4 - Dawn Kanelleas - First Sentier Investors

·45 min·4 clips

Dawn Kanelleas reveals she never intended to be an investor—her path began with a PhD in chemistry and a curiosity for problem-solving.

The episode is an interview with Dawn Kanelleas, head of Australian small and mid-cap companies at First Sentier Investors, hosted by Chris Titley on The Fundamentals podcast. Dawn begins by recounting her childhood, where she had no initial interest in investing, instead aiming for a science career. She earned a PhD in chemistry and was doing postdoctoral research at Oxford in the early 1990s when she noticed financial markets recruiting analytical minds from science departments. Dawn describes her entry into finance as driven by curiosity and problem-solving, not a desire to get rich. She discusses the emotional challenges of investing, such as when stocks like Iris trade poorly despite strong fundamentals, requiring her to separate sentiment from facts. Dawn outlines her investment process, which involves rigid criteria for high conviction positions but flexibility for thematic plays, aiming for a seven out of ten hit rate over the medium to long term. She emphasizes a three-year horizon for assessing whether a business will improve, citing examples like Breville and TechOne as enduring companies. Dawn explains how conviction builds over time, using NextDC as a case study: it started as a micro-cap with bank funding issues in 2010 and grew into a top 100 stock through gradual understanding and trust in management. She talks about engaging with company boards, being respectful but upfront, and how shareholder engagement has improved corporate governance over the years. On selling stocks, Dawn notes it's rarely dramatic, often triggered by loss of confidence in management or a business no longer fitting the three-year improvement thesis. She reflects on lessons from market shocks like 2008 and 2020, comparing current conditions to 2007 with frothy valuations in stocks like DroneShield. Dawn addresses portfolio management in volatile markets, where she must stay fully invested and make relative calls, such as trimming TechOne after a rapid re-rating. She shares a personal habit of stepping back to reassess investments, exemplified by her experience with Northern Star, where she overcame bias to achieve a four-bagger return. Dawn concludes by stressing the importance of switching off from finance, engaging in activities like art galleries or concerts to maintain perspective.

As heard by us

A measured episode on conviction, board engagement, and keeping investment pressure in perspective.

This episode is strongest when it treats small- and mid-cap investing as a way of thinking, not just a hunt for market calls. The guest's path from an expected life in science into markets gives the conversation a clear shape: curiosity, problem solving, and patience sit behind…

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Why you'd press play

You want conviction with manners, boardroom candor, and the strange but fitting reason an Oasis mosh pit belongs in an investing conversation.

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