L1 Capital Long Short Fund - IPO Open
L1 Capital is seeking to raise $500 million for a new listed investment company that will mirror the investment strategy of the existing L1 Capital Long Short Fund.
This shareholder friendly offer has attracted an elite syndicate of brokers, led by NAB as lead arranger. It is anticipated to be one of the largest LICs to come to market.
The LIC will invest in a portfolio of predominantly Australian and New Zealand securities, with up to 30% exposure to global securities. The Company’s objective is to deliver strong, risk-adjusted returns to investors over the long term.
It uses a fundamental, bottom‑up research process to identify mispriced securities with the potential to provide attractive risk‑adjusted returns. It will aim to identify and invest in securities issued by high quality companies with attractive valuations. The manager looks for companies with passionate, honest capable management; attractive industry structure; favourable operating outlook; and strong balance sheets.
The LIC may also take short positions in securities the manager considers to be overvalued, of low quality and/or over‑geared. The LIC may also use derivatives to hedge the portfolio’s market exposure, or to enhance returns (while attempting to limit potential capital losses).
The investment strategy has delivered returns of 36.9 per cent per annum since inception, placing it as one of the top performing long/short funds globally.
The Company is offering up to 250 million new shares at $2.00 per share, to raise $500 million, with the ability to accept an additional 50 million shares, representing $100 million, in oversubscriptions
The prospectus was lodged on 16 February 2018 and the offer opened on 5 March 2018. The broker firm offer will close on 29 March 2018 and the general offer on 6 April 2018. Shares are expected to commence trading on the ASX on 24 April 2018.
"Passion and honesty are core to the success of any business": Q&A with L1 Capital founder Mark Landau on the L1 Long Short Fund LIC
- What is your approach to investing for this fund?
The fund’s objective is to deliver strong, positive risk-adjusted returns to investors over the long-term.
It takes a bottom-up fundamental investment approach. The investment process involves thorough research and due diligence. We conduct meetings with management, competitors, suppliers, board members and other relevant stakeholders to form a view of the long-term outlook for the company and the industry.
- Why did you want to launch a listed version of your long/short fund?
Our existing long/short fund has been extremely successful, returning 36.9% per annum after fees since inception. In 2017, we were awarded Eurekahedge “Best Asian Long Short Equity Fund 2017” and Zenith “Best Australian Equities – Alternative Strategies 2017”. Given such strong endorsements of our investment approach, we were keen to broaden our investor base, which has historically been skewed to high net worth and institutional clients. We were keen to offer the strategy to retail investors in a shareholder friendly and easily accessible ASX-listed vehicle
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