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Printed: 05 December 2022 12:50 PM


28 Jan 2022 - Performance Report: L1 Capital Long Short Fund

Report Date26 January 2022
ManagerL1 Capital
Fund NameL1 Capital Long Short Fund
StrategyEquity Long/Short
Latest Return DateDecember 2021
Latest Return3.59%
Latest 6 Months10.45%
Latest 12 Months30.64%
Latest 24 Months (pa)29.30%
Annualised Since Inception22.62%
Inception Date01 September 2014
FUM (millions)AU$784
Fund OverviewThe L1 Capital Long Short Fund aims to deliver positive, risk adjusted returns over a period of 3+ years by investing in listed Australian and international shares as well as unlisted securities that are expected to list within the next 12 months. Derivatives, shorting and leverage may be used in order to achieve the Fund's investment goals.

L1 Capital uses a combination of discretionary and quantitative methods to identify securities with the potential to provide attractive risk-adjusted returns. The discretionary element of the investment process entails regular meetings with company management and other stakeholders as well as frequent reading and analysis of annual reports and other relevant publications and communications. The quantitative element of the investment process makes use of bottom-up research to maintain financial models such as the Discounted Cashflow model (DCF) which is used as a means of assessing the intrinsic value of a given security.

Stocks with the best combination of qualitative factors and valuation upside are used as the basis for portfolio construction. The process is iterative and as business trends, industry structure, management quality or valuation changes, stock weights are adjusted accordingly.
Manager CommentsThe L1 Capital Long Short Fund rose +3.59% in December, outperforming the ASX200 Total Return Index by +0.84% and taking 12-month performance to +30.64% vs the index's +17.23%.

The L1 Capital Long Short Fund has a track record of 7 years and 4 months and has consistently outperformed the ASX 200 Total Return Index since inception in September 2014, providing investors with a return of 22.62%, compared with the index's return of 8.2% over the same time period.

On a calendar basis the fund has had 1 negative annual return in the 7 years and 4 months since its inception. Its largest drawdown was -39.11% lasting 2 years and 9 months, occurring between February 2018 and November 2020 when the index fell by a maximum of -26.75%.

The Manager has delivered higher returns but with higher volatility than the index, resulting in a Sharpe ratio which has fallen below 1 four times and currently sits at 1.03 since inception. The fund has provided positive monthly returns 79% of the time in rising markets, and 63% of the time when the market was negative, contributing to an up capture ratio since inception of 94% and a down capture ratio of 7%.
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Australian Fund Monitors Pty Ltd
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