LSF - L1 Long Short Fund

[System]

L1 Long Short Fund Limited provides investors access to an absolute return fund that offers a highly diversified portfolio of long and short positions based on a fundamental bottom-up research process.

The Company's investment objective is to deliver strong, positive, risk-adjusted returns over the long term whilst seeking to preserve shareholder capital.

The Company's portfolio will be managed by L1 Capital Pty Limited, which was founded in 2007 by Mr Raphael Lamm and Mr Mark Landau and has approximately $3 billion of funds under management (as at 31 December 2017).

It is anticipated that LCF will list on the ASX during April 2018.

http://www.l1longshort.com

 

[catfish]

Can shares in the general offer be purchased if CommSec is my broker? Or is it only if you are with certain brokers?

 

[greggles]

Can shares in the general offer be purchased if CommSec is my broker? Or is it only if you are with certain brokers?

To participate in the float you can apply online here: https://events.miraqle.com/l1Capital-IPO/General-Offer/

 

[dyna]

For the past 12 months, a return up 70% on its benchmark, the ASX 200 Accumulation Index.
L1's monthly up-date shows ALS and Teck Resources , its best bets.
With a stated NTA at $ 2.80, like quite a few top performing LIC's, it still trades at a discount. ( SP $2.44 )

 

[Dona Ferentes]

For the past 12 months, a return up 70% on its benchmark, the ASX 200 Accumulation Index.
L1's monthly up-date shows ALS and Teck Resources , its best bets.
With a stated NTA at $ 2.80, like quite a few top performing LIC's, it still trades at a discount. ( SP $2.44 )

Coming on at $2 a share in early 2018, the first two years were very ordinary, and hit a low of 80c at Covid selloff time. Since then, the performance has been great.

With a Market Cap of $1.3B, the company publishes a daily NTA and has embarked on buying back shares to try and narrow that discount.

 

[peter2]

IMO LSF have been disappointing and will continue to be disappointing in the future. Their performance will look good for the next few years because they were invested through the Covid market crash. FY21 looks good in all reports because one year ago prices had only started to recover from the Covid low. People will get excited but fail to realise that the performance stats start from a low base. Woohoo look at my fund +50% last year. Invest with me.

Looking at their monthly reports Feb 2020, Mar 2020, April 2020 show there was very little active management of their portfolios. Their short position (Mar 2020 ~26/90 positions = 87%) didn't offset much as they were 180% long. They weren't nimble, still 85% short Apr2020 as the market rallied.

@Skate's long only system results over the same period are so much better.

 

[Dona Ferentes]

.... Woohoo look at my fund +50% last year. Invest with me.

And it gets trickier.

LSF investors are up 72.9 per cent in the past financial year, compared to the index’s gain of 28.6 per cent. And you better believe its manager is taking its slice of the spoils. Raphael Lamm and Mark Landau’s L1 Capital is entitled to an extraordinary $129 million yearly performance fee.

The L1 Capital principals made their name managing money for Australia’s upper crust, to spectacular success. But their attempt to bring their hedge fund nous to the ASX’s great unwashed via a mammoth $1.35 billion listed fund in 2018 has been dogged by bad luck, bad calls and structural deficiencies. (For a time, their private fund published daily updates while their listed fund, pursuing an identical strategy, only released monthly reports, giving savvier investors forewarning of poor performance.)

Things have, evidently, turned around. Now, the sheer quantum of their $20.6 million management fee added to the $128.7 million for performance equates to fully 10 per cent of the fund’s market capitalisation! Landau and Lamm were already loaded, but they’re about to join a whole other echelon.

Investors can rest assured not all that money is going out the door. Under the terms of their investment management agreement, L1 Capital’s owners will (after paying their taxes) reinvest their performance bonus back into the LIC. Their windfall will thus mostly remain on paper, for now.

run for your life?

 

[Dona Ferentes]

And it gets trickier.

Listing in 2014, and from a Covid low in April 2020 at 71c, LSF has had an impressive return to form and now touching $3.00.

Not everyone's cup of tea as a long-short, high-fee outfit, the L1 Capital Long Short Fund had a 33.5 per cent return over the past year, versus 15 per cent for the S&P/ASX 200, by allocating to energy and commodity businesses and also benefiting from shorting overvalued tech stocks that are years away from profitability and retail businesses that suffered as COVID-19 lockdowns eased.

In general, the fund manager thinks shorting stocks on “ultra-high” price-to-earnings multiples is an effective way to hedge against persistent inflationary pressure and a central bank tightening cycle.

 

[Jackass]

A bit of a red flag for me on this one despite some good results recently.

From their latest quarterly. 18 short positions, 77% of the fund by value. Gives an average short position size of 4.28% per each position. Not to mention the leverage involved here - 258% gross exposure.

I'll leave other people to do the maths on what happens to this portfolio if one of these shorts blows up, which in this era of sh*tcos going to the moon is very possible. Suffice to say - it is not pretty and well outside my risk tolerance.

Still pretty hard to argue against the results they have put up. Just saying, not for me.

 

[Jackass]

Sorry that should say 77% of the funds Equity, not value.

 

[peter2]

Latest LSF qrtly report is up. Worth a read for their general economic and market opinion.