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8 Sep 2022 - Performance Report: L1 Capital Long Short Fund (Monthly Class)


Report Date08 September 2022
ManagerL1 Capital
Fund NameL1 Capital Long Short Fund (Monthly Class)
StrategyEquity Long/Short
Latest Return DateAugust 2022
Latest Return5.70%
Latest 6 Months-8.38%
Latest 12 Months3.79%
Latest 24 Months (pa)33.21%
Annualised Since Inception20.66%
Inception Date01 September 2014
FUM (millions)AU$786
Fund OverviewL1 Capital Long Short Fund is an absolute return strategy launched in 2014 that offers investors a highly flexible, absolute return-orientated portfolio of long and short positions based on L1 Capital's fundamental bottom-up research process. The Fund's objective is to deliver a net return of at least 10% p.a. to investors with considerably less market risk and volatility (on average) and invests primarily in Australian equities with up to 30% in international shares. The portfolio typically comprises 50-100 positions across a wide range of sectors and themes. The investment team, led by L1 Capital Co-Founders/co-CIOs, Mark Landau and Raphael Lamm, combines valuation (primarily discounted cash flow) with qualitative considerations (management quality, long-term industry and company structure and business trends) to identify attractive investment opportunities. The core of the investment approach is a high level of interaction with a wide range of market participants. Investors can access the strategy through an Australian Listed Investment Company, Australian Unit Trust or a Cayman vehicle.
Manager CommentsThe L1 Capital Long Short Fund (Monthly Class) rose by +5.7% in August, an outperformance of +4.52% compared with the ASX 200 Total Return Index which rose by +1.18%.

The L1 Capital Long Short Fund (Monthly Class) has a track record of 8 years and has outperformed the ASX 200 Total Return Index since inception in September 2014, providing investors with an annualised return of 20.66% compared with the index's return of 7% over the same period.

On a calendar year basis, the fund has only experienced a negative annual return once in the 8 years since its inception. Over the past 12 months, the fund's largest drawdown was -17.4% vs the index's -11.9%, and since inception in September 2014 the fund's largest drawdown was -39.11% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in February 2018 and lasted 2 years and 9 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by November 2020.

The Manager has delivered these returns with 6.63% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 0.95 since inception. The fund has provided positive monthly returns 78% of the time in rising markets and 64% of the time during periods of market decline, contributing to an up-capture ratio since inception of 87% and a down-capture ratio of 18%.
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