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For much of his life, David Paradice found peace in running. Four or five times a week, he would lace up his shoes and pound the pavement for a good hour.
But one day in 1992, when he was working for the NSW State Superannuation Investment and Management Corporation in Sydney, that peace was shattered. After a run he noticed blood in his urine.
“I got checked up, and they found I had kidney cancer. They took it out pretty quickly because it was massive. I lost the whole kidney,” he says.
It was a shock that would come to define him, not because of the illness itself, but because of the resilience it instilled.
In the years that followed, Paradice faced two more cancer battles: first with his remaining kidney, and then with the scourge of all males, his prostate.
“They found another spot on the other kidney and took that growth out too, and that wasn’t as bad. But while they were doing that, they worked out my blood counts weren’t right. I had to get my prostate cut out exactly a year later,” he says.
His remaining kidney has since grown back to full size. But the experience traumatised his family, especially during a period when it could have become a matter of life or death, and has changed his outlook on life entirely.
“It made me more health conscious so I am more careful with what I eat, my weight, all that kind of stuff. I would not say I’m less stressed - I’m probably just as stressed as ever - but it has made me more focused. It has also made me value family even more,” he says.
Family has always been at the centre of Paradice’s world. The founder of one of Australia’s most successful boutique funds management firms still measures success by the relationships that surround him.
His father John died last year at 97, and his mother Robin - best known as Bobby - is still alive at 95.
Paradice grew up in a boisterous household in Scone, the Upper Hunter Valley town that has become synonymous with the family name. He was one of six children in what he calls a “roll-your-sleeves-up” environment.
“The country thing helped me out as well. I didn’t spend much time in the malls - I was outside a lot of the time - and that taught me initiative. Roll your sleeves up, get the job done, and be more proactive rather than reactive,” he says.
“My mum used to be into shares, so I probably got some of that from her. She liked the financial side of things but she was a teacher. Her father used to be chairman of the Bank of New South Wales.”
Paradice’s father was a doctor and instilled in his son something he would carry into investing and life.
“I remember fixing an underground irrigation pipe with him once. I would usually just dig around the hole where the problem was and try to fix it, whereas he’d always make sure there was a massive hole to give you room to work. Which is exactly the right thing to do,” he says.
“He taught me that if you are going to do something, do it properly.”
That attention to detail and quiet discipline would shape the culture of Paradice Investment Management, which now oversees with nearly $20 billion under management from offices in Sydney, Melbourne and North America.
Over the past 25 years the firm’s flagship Australian small cap fund has returned 15.35 per cent before fees, outperforming its benchmark by nearly 9.5 per cent.
Ask Paradice what has driven that success and his answer is disarmingly simple.
“We try to employ high quality people who are competitive disciplined investors with curious minds and a passion for business and investing,” he says.
“We have kept to the same principles since day one. Our three key investment criteria are the quality of management, the strength of the business, and earnings and cash flow.”
But he stresses they are most interested in one thing:
“What we want most from management is a realistic vision and expectation that they can under-promise and over-deliver.”
His best stock pick ever was the Corporate Express stationary supplies firm. His worst was Strathfield Car Radio.
“I bought it and the next day it was down 50 per cent because Telstra changed the way they sold into the marketplace,” he says.
The lesson? “Don’t go into businesses where you’re the third or fourth player.”
His investing career has been defined by a willingness to take contrarian positions and to do the work. Now In an age of AI and soaring tech valuations, he remains both curious and cautious.
“People look at multiples and think they are high, but technology is changing every industry. You might be looking at a company that looks expensive, but it has got hockey-stick earnings because of tech. Booking.com is an example with its hockey-stick earnings, static costs and massive leverage,” he says.
“I was actually having dinner recently in England with a guy who turned out to be Scott Bessent (The US Treasury Secretary) and I didn’t realise it was him until the day after! He told me the US government is spending $300 billion a year on AI, and the multiplier effect on the economy is massive. That has huge implications for business.”
But Paradice is also wary of the speculative AI hype. He prefers to focus on where technology in general is changing industries, such as driving the massive energy transition happening globally.
The firm has also done well backing Life360, a family-oriented location-sharing app.
Culture at Paradice Investment Management, its founder says, is everything.
“There are plenty of $20 billion fund managers who have gone by the wayside, but we have maintained focus. From day one, we only had board or management meetings before 8am or after 6pm. The culture is: don’t waste the stock pickers’ time. It’s all about focus,” he says.
He is still in the office by 6.30 am every morning along with most of his managers.
Five mornings a week he spends up to 90 minutes in the gym, alternating between the rowing and cycling machines and the weights circuit. His laments his “shot” knees have put paid to running.
But sport remains his outlet. He’s played polo for years, often alongside members of the Packer family at their Ellerston ranch near Scone, and still finds lessons from the field that translate to investing.
“What I love about sport is the mental side, the same as in investing. You play with the best players in the world and see how they think.”
For all his financial success, Paradice’s definition of achievement has shifted over time. Now it is a combination of returns, relationships, and impact.
“It’s about risk-adjusted returns, not taking massive volatility, not taking shortcuts, doing the right thing and having deep relationships with clients,” he says.
He still remembers the day in 2000 when he won his first mandate, $30 million from the REST super fund. When they congratulated him, he politely told them to hold their applause for five years time.
Even today, with nearly $20 billion under management, he still feels nervous about winning money.
“That is what keeps you sharp. You can’t get complacent,” he declares.
When family patriarch John Paradice passed away in the Hunter Valley last year, the funeral was simple and heartfelt.
All six of his children spoke. Afterwards, there was a quiet family cremation.
David used the moment to reflect on what his father had taught him and the lessons that now guide every decision he makes.
“He was caring and considerate, and he didn’t make every post a winner but that is not what is important. What is important is doing the right thing by people around you.”
He pauses for a moment, before adding softly: “That has governed my life. We could have raised a lot more money years ago, but we limited it because we wanted to do right by the clients. My father’s message always was: be passionate, have a focus, have a purpose and do the right thing. Not what you can get away with, but the right thing.
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