L1 Long Short Fund Ltd. · ASX:LSF
L1 Long Short Fund — Investor Presentation (May 2022)
34 slides from L1 Long Short Fund's investor presentation, May 19, 2022
Slide 1: L1 Long Short Fund Limited Investor Webinar
For personal use only L1 Long Short Fund Limited Investor Webinar Mark Landau, Joint Managing Director and Chief Investment Officer 19 May 2022
Slide 2: Overview: Performance has been strong with broad-based stock contributors
Overview Performance has been strong with broad-based stock contributors For personal use only Over the past year, the portfolio has returned 31%1 and LSF shares have returned 36%. Strong performance versus Australian & global index returns (ASX200AI 10.2%, S&P500 -1.2%, MSCI World -4.9%) The qualit
Slide 3: Performance summary
For personal use only 1 Performance summary
Slide 4: Strong performance over all time periods
Performance summary Strong performance over all time periods For personal use only Last 12 months: Portfolio +31%1, LSF share price total return +36%. Pre-tax NTA Net Performance L1 Long Short Fund S&P ASX MSCI World Index HFRX Global Hedge Fund to 30 April 2022 (%) portfolio 200 AI (USD) Index 3 mo
Slide 5: Strong performance in both rising and falling markets
Strong performance in both rising and falling markets Since inception of the Long Short Strategy For personal use only Performance in ‘down market’ months Performance in ‘up market’ months (Average of 34 months) (Average of 58 months) 5.0% 3.0% 3.0% 2.5% 0.2% 0.0% -2.5% -3.1% -5.0% Long Short Strate
Slide 6: Portfolio contributors and detractors
Portfolio contributors and detractors Calendar year to date For personal use only Company name Company news Cenovus Strong operational performance and low all-in cost structure supporting rapid de-gearing at prevailing oil prices. Concerns on U.K. regulatory risk and path to profitability in the U
Slide 7: LSF advantages
For personal use only 2 LSF advantages
Slide 8: Portfolio tools: Three key advantages
Portfolio tools Three key advantages For personal use only LSF has a number of key advantages over many other funds: Market exposure Shorting International Adjust portfolio net long to Able to profit from Exploit research reflect the risk-reward of both rising and falling insights offshore, not the
Slide 9: Portfolio tools – Market exposure
Portfolio tools – Market exposure Adjust portfolio exposure to reflect the risk-reward of the market For personal use only Net long exposure of the LSF portfolio 130% Jan – May 2021: Oct 2021 – Apr 2022: Reduced net long following Reduced net long given 120% May – Nov 2020: rally and reporting seaso
Slide 10: Portfolio tools – Shorting
Portfolio tools – Shorting Able to profit from both rising and falling share prices For personal use only LSF stock and index shorts contributed meaningfully to returns on a CYTD basis. ▪ Ultra-high multiple concept stocks that are many years away from profitability (e.g. Shopify). ▪ ‘COVID-19 winne
Slide 11: Portfolio tools – International exposure
Portfolio tools – International exposure Exploit research insights offshore, not just domestically For personal use only LSF international positions have contributed LSF international positions vs. domestic peers ~30% of returns in CYTD 2022. Copper stocks share price performance CYTD ▪ Capitalise o
Slide 12: Market outlook
For personal use only 3 Market outlook
Slide 13: Market outlook – Summary
Market outlook – Summary Equity markets likely to remain volatile in the near-term For personal use only We expect market returns to be more modest going forward. Equities backdrop: Last two years Equities backdrop: Today ▪ Incredibly attractive valuations ▪ Full valuations ▪ Excessive COVID-19 pess
Slide 14: Market outlook – Market rotation
Market outlook – Market rotation ‘Value’ underperformance starting to reverse For personal use only ▪ Since 2007, value stocks have endured the largest and MSCI USA Value/Growth – 12M Forward P/E longest period of underperformance ever on record. Growth P/E expanding at a faster rate than ▪ Recovery
Slide 15: Market outlook – Inflation
Market outlook – Inflation Inflation unlikely to moderate to historic levels anytime soon For personal use only A year ago we flagged the risk of much higher inflation: Consensus U.S. CPI Economic Forecast – Q2 2022 - Consensus CPI expectations rose from ~2% to ~8%. 8% 7% - CPI being driven by oil,
Slide 16: Market outlook – M&A
Market outlook – M&A Expect M&A activity to rebound quickly as markets stabilise For personal use only We expect elevated M&A activity to continue: ▪ 2021 was a record year for M&A (see chart below). ▪ Portfolio benefitted given our skew to undervalued companies with strategic appeal. ▪ Deals are be
Slide 17: Portfolio themes
For personal use only 4 Portfolio themes
Slide 18: Portfolio themes – Summary
Portfolio themes – Summary We are invested in four key themes that offer compelling, asymmetric risk-reward For personal use only U.S. Sports Betting Energy Re-opening trade Corporate value unlock ▪ Near-term concerns over ▪ Positive on ‘old energy’ ▪ Vaccine success only ▪ High quality businesses /
Slide 19: Theme – U.S. sports betting
Theme 1 – U.S. sports betting One of the most exciting, high growth industries globally For personal use only Flutter (FLTR – UK) Entain (ENT – UK) ▪ #1 player in U.S. online sports betting and iGaming industry. ▪ Entain JV with MGM Resorts (BetMGM) is the #2 player in U.S. sports ▪ High growth, cap
Slide 20: Theme – Energy
Theme 2 – Energy Structural under-investment in ‘old’ energy likely to exacerbate market tightness For personal use only Cenovus Energy (CVE – USA) Santos (STO) ▪ Generating 20-25% free cash flow yield at spot oil price. ▪ Completed merger with Oil Search in late 2021. ▪ Cash flow break-even at ~$40
Slide 21: Theme – Re-opening trade
Theme 3 – Re-opening trade ‘COVID losers’ likely to enjoy accelerating operating metrics as economies re-open For personal use only Qantas (QAN) Safran (SAF – FR) ▪ Strong customer demand, improved fares and $1b cost out ▪ World’s highest quality aerospace company – global leader in program. manufac
Slide 22: Theme – Corporate value unlock
Theme 4 – Corporate value unlock Hidden value opportunities within a group structure For personal use only Mineral Resources (MIN) SES (SESG – FR) ▪ Diversified mining company with attractive valuation and ▪ Global satellite operator providing data and video services to the outstanding management. p
Slide 23: For personal use only
For personal use only 5 Corporate update
Slide 24: LSF's discount to NTA has reduced significantly
Corporate update LSF’s discount to NTA has reduced significantly, due to a number of positive factors For personal use only Over the past 24 months, the discount to post-tax NTA has LSF post tax NTA vs. LSF share price narrowed from 36% to 3%1 supported by: $3.50 Discount = 3% ▪ Very strong portfoli
Slide 25: Summary
Summary For personal use only 1 The portfolio has performed very strongly in both relative and absolute terms. 2 After a period of stronger than normal equity returns over the past two years, our expectation is for market performance to be more subdued. 3 To achieve attractive real returns, equity i
Slide 26: Appendix: Overview of L1 Capital
For personal use only Appendix I Overview of L1 Capital
Slide 27: L1 Capital – Business Overview
L1 Capital – Business Overview For personal use only Specialist investment manager founded by Mark Landau & Rafi Lamm in 2007 ▪ ‘L’ – Derived from the surnames of the founders (Lamm & Landau). ▪ ‘1’ – Genuine firm-wide aspiration to be the “best”, not just “good”. ▪ Reputation for investment excelle
Slide 28: Global Investment Manager
Global Investment Manager Well resourced and experienced team across investments, operations, compliance and investor relations For personal use only Business Overview Founded in 2007 London Since 2017 A$5b FUM UK Residential Property Investment professionals in 5 locations globally New York &
Slide 29: L1 Capital Funds
L1 Capital Funds Investment Excellence – Outstanding performance since inception across all strategies For personal use only Long Short Fund Global Opportunities International Equities 23.8% p.a. net return S.I. (ASX200AI 8.0% p.a.)1 34.6% p.a. net return p.a. S.I. 11.5% p.a. net return S.I. (MSCI W
Slide 30: Competitive Edge
Competitive Edge A highly aligned and proven team that drives performance through differentiated research For personal use only Track Record Quality Research Independent Thinking Best performing long short fund Differentiated company, Low correlation with other in Australia since industry and macro
Slide 31: Monthly performance, strategy returns (Net, %)
L1 Long Short Fund Limited Monthly performance, strategy returns (Net, %) For personal use only Period Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 2014 - - - - - - - - (2.42) 3.03 2.85 1.61 5.17 2015 0.59 9.14 2.42 1.71 3.73 (0.86) 3.30 2.06 5.51 8.49 8.11 4.62 60.52 Best performing long sh
Slide 32: Important information
Important information L1 Long Short Fund Limited For personal use only L1 Long Short Fund Limited has been established to invest in a portfolio of predominantly Australian and New Zealand securities, with up to 30% invested in global securities. The Company has the ability to both buy and short-sell
Slide 33: Contact Us
Contact Us For personal use only Chris Clayton Wayne Murray Alexander Ordon Head of Distribution Investment Specialist Investment Specialist +61 (3) 9286 7021 +61 (0) 424 300 003 +61 (0) 413 615 224 cclayton@L1.com.au wmurray@L1.com.au aordon@L1.com.au Aman Kashyap Alejandro Espina Edward Vine Inves
Slide 34: For personal use only
For personal use only Ab 21 125 378 145 | AFSL 314 302 Level 28, 101 Collins Street Melbourne Victoria 3000 Australia Phone +61 3 9286 7000 Fax +61 3 9286 7099 Web L1LongShort.com.au
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