L1 Long Short Fund Ltd ASX: LSF

L1 Capital CIO, Mark Landau discusses his views on current investment opportunities [2:51m]

Fixed Priced IPOType of Offer
13 Mar 18Offer Open
27 Mar 18Pay By
$2.00Price
Up to $500 millionSize of Offer
$5,000 Minimum Investment
NABLead Manager
30
4952

The L1 Long Short Fund IPO is closing early.  Please ensure you apply and pay by 5pm (AEDT) today, Tuesday 27 March.
 

Introduction

L1 Long Short Fund Limited (ASX: LSF) will be a listed investment company and has been established to invest in a portfolio of predominantly Australian and New Zealand Securities, with up to 30% of the gross exposure allowed in global securities. The Company’s objective is to deliver strong, positive, risk-adjusted returns to investors over the long term.

L1 Long Short Fund Limited is seeking to raise between $100 million and $500 million with the option to receive an additional $100 million in over subscriptions via its IPO.  

The Manager

The Company’s portfolio will be managed by L1 Capital Pty Limited (Manager), 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).

L1 Capital is a global investment and currently manages capital for a range of investors including institutional, wholesale and retail investors. The Manager is 100% owned by entities associated with the key personnel. In line with what the Company considers to be best practice, L1 Capital has committed to forego all management fees until such time as the Company has recouped issue costs, and will also cover the majority of operating costs of the Company where appropriate. The owners of the Manager will be investing a sizeable amount in to the Company and have also agreed to reinvest the after tax value of the performance fee paid by the listed investment company with a long term escrow arrangement.

Investment Strategy

The Investment Strategy will use a fundamental, bottom-up research process to seek to identify mispriced securities with the potential to provide attractive risk-adjusted returns. The Company’s Investment Strategy will be implemented by the Manager which will aim to identify and invest in  Securities issued by high quality companies with attractive valuations. The Company’s assessment of high quality Securities is based on identifying companies with the following characteristics:

  • passionate, honest & capable management;
  • attractive industry structure;
  • favourable operating outlook; and
  • strong balance sheet.

The Company may take Short Positions in Securities issued by companies that the Company considers to be overvalued, of low quality and/or over-geared. In addition, the Company may use Derivatives to hedge the portfolio’s market exposure or to enhance returns (while attempting to limit potential capital losses). The Company may hold Long or Short Positions or use Derivatives to profit from this mispricing.

Historical performance

The Manager’s existing unlisted L1 Capital Long Short Fund has a strong track record of historical performance, having delivered an average compound return of 36.9% p.a. (after fees) since it was launched in September 2014 up until December 2017. Over the same period, the S&P / ASX200 Accumulation Index (ASX200 AI) has achieved an average compound annual return of 6.9% p.a. Importantly, the existing Fund’s historical returns have been achieved with significantly less volatility and market risk than the ASX200 AI. The existing Fund has also demonstrated historically strong downside protection during periods of market stress, outperforming the ASX200 AI in all months (up until 31 December 2017) where the ASX200 AI fell (17 separate occasions).

Directors and Key Personnel

L1 Long Short Fund Limited is led by a board who have a broad range of experience in investment management combined with financial and commercial expertise.  Key personnel include:

  • Raphael Lamb, Co-founder of the Manager and Joint Managing Director & Chief Investment Officer since the firm was founded in 2007. Raphael has jointly headed up the L1 Capital Australian Equities Fund and L1 Capital Long Short Fund. Prior to L1 Capital, Raphael spent more than five years at Cooper Investors. During that period, Raphael was a portfolio manager of the flagship Cooper Investors Australian Equities Fund.
  • Mark Landau, co-founder of the Manager and Joint Managing Director & Chief Investment Officer since the firm was founded in 2007. Mark has jointly headed up the L1 Capital Australian Equities Fund and L1 Capital Long Short Fund. Prior to establishing the Manager, Mark spent five years at Invesco as an Investment Analyst in the Large Cap Australian Equities team and later as an Investment Manager in the Smaller Companies Fund.
  • Andrew Larke, Independent Chairman - is an experienced financial services executive with over 20 years’ experience in mergers, acquisitions, capital markets and senior executive leadership positions. He is a Non-Executive Director of Diversified Investment Limited, Dulux Group and IXOM, and Chairman of Sand Hill Road Hospitability.

 

As set out in Section 5 of the prospectus, L1 Long Short Fund Limited is subject to a range of risks, including but not limited to investment strategy, market stability, short selling risk, counterparty and collateral risk.

 

Section 734(6) disclosure: The issuer of the securities is L1 Long Short Fund Limited ACN 623 418 539. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).​

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile, investor name or residential address may be cancelled.

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