At the 2025 Pinnacle Insights Series, Dougal Maple-Brown posed the question, "Do you have enough Value in your portfolio?" Heightened market volatility and geopolitical uncertainty has many advisers considering whether they should be more defensive with the Australian equities part of their client portfolios.

Dougal Maple-Brown, Head of Australian Value Equities provides his detailed summary of the March reporting season.

Many of the popular investment themes and crowded stock holdings driving the Australian small cap market in the 2024 calendar year have reversed in the March 2025 quarter. Given the expectation of lower domestic interest rates going forward, many of the high-flying technology, quality and growth exposed companies have been used as funding sources as investors rotate into cheaper quality stocks and/or value/cyclical exposed companies with improving earnings momentum. The question for investors is whether this is just a blip or is the rotation more sustainable? This thematic shift and heightened market volatility is creating increased value adding opportunities for active Australian small cap managers that have a competitive information advantage.

Maple-Brown Abbott Global Listed Infrastructure (MBA GLI) is a highly specialised investment manager focused on infrastructure assets. Since our inception in 2012, we have built a strong track record of delivering stable, long-term returns by investing in infrastructure. Features of the infrastructure asset class include defensive business models, diversification, inflation protection and low volatility cash flows. Our expertise, independence, and alignment with investors have made us a leader in the sector.

Looking back at 2024, history will record that the Australian equity market produced a slightly higher than 'average' total return of around 11%. However, that very “normal” looking return hides a huge dichotomy in the equity market: between the 'haves' and the 'have nots'.

In 2025, geopolitical and economic uncertainties highlight the appeal of defensive infrastructure assets. While inflation is under control, its unpredictability persists, making infrastructure with inflation pass-through mechanisms more attractive. Our preference remains for monopolistic infrastructure assets that are undervalued, benefiting from regulatory protections, strong long-term contracts, and inflation linkages. Additionally,  we see substantial organic growth opportunities for the sector, predominantly driven by the energy transition but also supported by long term investment opportunities in water, transport mobility and digitalisation.

Over the 2024 calendar year, the performance of the Australian small caps market relative to both domestic large caps and global equity markets has been underwhelming. We believe there are a number of tailwinds in place as risk appetite returns to the space following a challenging few years. In our opinion 2025 has all the hallmarks of being ‘the year of the Australian small caps’.

2024 may best be remembered as the year that AI hype went mainstream. From an infrastructure perspective the key impact has been on power markets, as the challenge in providing sufficient power to support the needed growth in data centers has become very apparent.

Amid recent news headlines regarding corporate governance shortcomings at founder-led companies, the need for rigorous governance standards has never been more critical. This article outlines the key governance principles investors should consider when investing in founder-led businesses. Additionally, it addresses both the positive and negative indicators of corporate governance at founder-led businesses as well as the key areas where investors should consider greater flexibility in governance practices to preserve the advantages that exist at companies led by its founders.