Interview #94 : Jason Donville and Jesse Gamble (Donville Kent AM)
Owning high quality compounders
For this issue we have the pleasure of interviewing Jason Donville and Jesse Gamble from Donville Kent Asset Management.
⚡ Consider becoming a Paid Subscriber to read these interviews in full, and gain access to all the other great content too.
Paid subscribers receive…
24 Stock Pitches newsletter per year (360+ ideas)
Quarterly Fund Manager Letters Round-up newsletter (4 per year)
We have subscribers from all around the world who enjoy consuming our content. This includes fund managers, analysts, family offices, and other institutions. We have many individual investors and students who enjoy the content too.
If you’ve not done so already we hope you consider becoming a paid subscriber to get all the full benefits (and a shedload of stock ideas too).
Can you provide a brief overview of Donville Kent Asset Management - who do you manage money on behalf of? And what strategy do you employ for the fund?
DKAM is a Toronto based hedge fund that was launched in 2007 and is run by Jason Donville and Jesse Gamble. The fund is highly concentrated and focused on owning high quality compounders.
Being analysts ourselves and completing due diligence in-house, allows us to discover these companies early. We run dual stock trackers that allow us to take a Moneyball type approach to stock discovery.
Meaning our process is driven by numbers first, which keeps us out of “concept” stocks or being seduced by good stories. We have been successful at investing in these compounders early and helping them go through the discovery process for the rest of the market.
Our investor base is a balance of Investment Advisors and direct high-net worth individuals. We find we fit well as part of an investor’s equity growth exposure.
We provide a significant amount of correspondence and like to keep our investors well informed as well as being as transparent as possible.
You like to invest in early compounders. What specific attributes or criteria are you seeking to know if the company is a true compounder?
Knowing if a company is a true compounder, isn’t an easy task. We start with the unit economics of the business and work our way back. Does the product or service they offer have a high rate of return per unit? Can it efficiently scale? Does it have a long runway to re-invest their cashflows back into their business at this high rate of return?
Another important component we look at is the management team and assessing if they are true capital allocators. We look to see if they “speak our language”, meaning they track, rank, and can reference the internal rate of return on their investments. This is surprisingly rare.