L1 Long Short Fund Ltd. · ASX:LSF
L1 Long Short Fund — Investor Presentation (October 2024)
28 slides from L1 Long Short Fund's investor presentation, Oct 31, 2024
Slide 1: Investor webinar invitation
For personal use only We are pleased to invite all investors and interested parties to join L1 Capital’s Joint Managing Director and Co-Chief Investment Officer Raphael Lamm, and Head of Research Amar Naik for a L1 Long Short Fund Limited (ASX:LSF) investor ABN 21 125 378 145 | webinar AFSL 314 302
Slide 2: L1 Long Short Fund Limited (ASX:LSF)
For personal use only L1 Long Short Fund Limited (ASX:LSF) Rafi Lamm, Joint Managing Director & Co-CIO Amar Naik, Head of Research 31 October 2024
Slide 3: Reflections on 10 years of the Long Short Strategy
For personal use only Reflections on 10 years of 1 the Long Short Strategy
Slide 4: L1 Capital Long Short Fund
L1 Capital Long Short Fund Focused on the core principles of alignment and delivering value for investors Best performing Australian long short fund over the past decade1 For personal use only ▪ Deep valuation and industry research to identify attractive opportunities ▪ Extensive network in Australi
Slide 5: Performance track record for L1 Capital Long Short Strategy
Performance track record for L1 Capital Long Short Strategy Delivered very strong absolute and relative returns since inception Return of LSF Strategy vs. ASX200AI (since launch in September 2014) For personal use only 600% LSF Strategy 19.1% p.a. 10.8% 400% outperformance p.a. (net) ASX200AI 200% 8
Slide 6: Low P/E stocks have dramatically underperformed high P/E stocks over the past decade
Low P/E stocks have dramatically underperformed high P/E stocks over the past decade LSF has delivered strong returns despite enormous factor headwind for ‘value’ investing Relative performance of ‘low valuation’ stocks vs ‘high valuation’ stocks over the past decade For personal use only 0% -60% Lo
Slide 7: Performance summary – Strong absolute returns over all time periods
Performance summary – L1 Long Short Fund Limited (ASX:LSF) Strong absolute returns over all time periods For personal use only Pre-tax NTA Net Performance1 L1 Long Short S&P/ to 30 September 2024 (%) Portfolio ASX200 AI Outperformance 1 year 14.0 21.8 (7.8) 2 years p.a. 17.9 17.5 +0.3 3 years p.a. 8
Slide 8: Market observations
For personal use only 2 Market observations
Slide 9: Economic Trends: U.S. & U.K.
Economic Trends U.S. & U.K. economic activity has been more resilient than expected U.S. U.K./Europe For personal use only ▪ Resilient economic data ▪ Recovery in key U.K. economic indicators ▪ Unemployment rising, but well-below historical levels ▪ Europe more challenged (mixed eco data, weak ▪ Con
Slide 10: Economic Trends: China and Australia
Economic Trends Chinese GDP growth has been weak, with major stimulus to come. Australia growing modestly – higher interest rates persisting. China Australia For personal use only ▪ Step up in fiscal and monetary stimulus ▪ Surge in migration ▪ Aim to correct housing supply, improve sentiment, ▪ Com
Slide 11: Index & Sector Valuations
Index & Sector Valuations Most stock indices appear fully priced, with domestic Technology & Financials looking very stretched versus history Selected markets P/E premium vs. historical average ASX selected sector P/E premium vs. LT historical average For personal use only Premium/discount to 10y av
Slide 12: Why valuation discipline is critical: Woolworths
Why valuation discipline is critical Could Commonwealth Bank be the next Woolworths? Woolworth’s price chart IPO to December 2007 Woolworth’s price chart from December 2007 to today For personal use only $30 $50 $28.51 p/s $40 $20 ~$33 p/s $30 $28.51 p/s $20 $10 $2.70 $10 p/s $0 $0 Market darling
Slide 13: Why valuation discipline is critical: CBA
Why valuation discipline is critical We see some parallels with CBA today CBA 12m forward P/E and consensus EPS revisions CBA 90+ days overdue loans as a % of total assets For personal use only 26x – starting to revert back to trend 12m fwd P/E 1.6% 24x = 24.6x 12m forward P/E (x) 1.50% 22x 12m Cons
Slide 14: Portfolio performance and key themes
For personal use only Portfolio performance and 3 key themes
Slide 15: Key stock contributors and detractors
Key stock contributors and detractors 2024 calendar year-to-date (ending 30 Sep) Company name Company news For personal use only Qantas Strong operational trends, additional ~$400m share buyback program, reinstatement of fully franked dividends from 1H25 Hudbay Rising copper and gold prices coup
Slide 16: LSF portfolio adjustments
LSF portfolio adjustments Portfolio gross and net exposure largely consistent relative to 6 months ago Change in sector positioning vs 6 months ago Geographies – key changes For personal use only Added several attractive Added several new Infrastructure U.K. opportunities positions Sold down given l
Slide 17: Portfolio themes: Summary
Portfolio themes: Summary We are invested in five key themes that we believe offer compelling, asymmetric risk-reward For personal use only Infrastructure Global leaders U.K. Quality Value Gold Uranium Regulated assets Number 1 players in Dominant, high- Ongoing demand for Uranium demand w
Slide 18: Theme: Infrastructure
Theme: Infrastructure Monopoly infrastructure assets with strong dividend profiles For personal use only ▪ Owns and operates Frankfurt Airport alongside a portfolio of ▪ National rail operator with >5,000kms of network assets and International airport stakes largest haulage operations in Australia ▪
Slide 19: Theme: Global Leaders
Theme: Global Leaders Number 1 players with outstanding management teams and an enormous runway of earnings growth For personal use only ▪ Largest building products company in North America ▪ #1 player in U.S. online sports betting/iGaming ▪ Outstanding track record of EPS growth (10yr EPS CAGR of 1
Slide 20: Theme: U.K. Quality Value
Theme: U.K. Quality Value The U.K. stock market is a standout globally, with numerous high-quality companies trading at compelling prices U.K. FTSE All Share forward P/E ratio Major markets 12m forward P/E For personal use only Premium/discount to 10y average 12m fwd consensus P/E +14% 16 30x 28x +2
Slide 21: Theme: U.K. Quality Value – Tesco & Rightmove
Theme: U.K. Quality Value Tesco & Rightmove are high quality, fast growing businesses trading at huge discounts to Australian peers For personal use only ▪ #1 supermarket in the U.K. with ~28% share Dominant U.K. real estate portal – >80% of search traffic & leads ▪ Tesco is ~50% larger than its n
Slide 22: Theme: Gold
Theme: Gold Gold price has continued rising due to structurally higher demand and concerns over rising U.S. debt and ongoing deficits ▪ 2024 rally driven by an acceleration in buying from Central Banks and Asian consumers For personal use only ▪ U.S. fiscal sustainability remains a key concern (U.S.
Slide 23: Theme: Gold – OceanaGold and Eldorado
Theme: Gold OceanaGold and Eldorado offer strong production growth and exceptional value Production growth (Koz)* For personal use only +55% 750 ▪ Long-life producing assets in U.S., Philippines & NZ 800 +32% 700 ▪ Strong cash flow growth from rising production and grades 600 530 485 ▪ Exploration u
Slide 24: Theme: Uranium
Theme: Uranium The outlook for uranium is bright given the world’s desire for reliable, affordable, green energy ▪ Large western nations looking to triple nuclear energy capacity by 2050. China demand expected to grow even faster. For personal use only ▪ Significant new mine supply needed to meet de
Slide 25: Theme: Uranium – NexGen
Theme: Uranium NexGen owns the most prospective undeveloped uranium asset globally For personal use only NexGen average Annual EBITDA at different uranium prices (C$b) ▪ Largest uranium asset under development globally (Rook I) C$6b ▪ Exceptional project scale and quality C$5.2b ▪ In final stages of
Slide 26: Important information
Important information L1 Capital Pty Ltd Disclaimer For personal use only This communication has been prepared for L1 Long Short Fund Limited (ACN 623 418 539) by its investment manager, L1 Capital Pty Ltd (ABN 21 125 378 145 and AFS Licence 314302). L1 Capital Pty Ltd has prepared this publication
Slide 27: Contact Us
Contact Us For personal use only Chris Aman Bryce Alejandro Clayton Kashyap Leyden Espina Head of Distribution Deputy Head of Distribution Investment Specialist Investment Specialist +61 (3) 9286 7021 +61 (0) 477 341 403 +61 (0) 407 876 532 +61 (0) 423 111 531 [email protected] [email protected] b
Slide 28: For personal use only
For personal use only ABN 21 125 378 145 | AFSL 314 302 Level 45, 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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