Antipodes Partners Limited (Antipodes Partners), the boutique Australian investment management firm, has launched a UCITS version of its flagship long/short global equity fund.
The Antipodes Global Fund – UCITS, which was launched with $125m of cornerstone assets, has come to the market in response to strong demand from European and Asian investors. It is the first sub-fund of the Pinnacle ICAV, a Dublin-based UCITS umbrella distributed by Pinnacle Investment Management, a leading Australian multi-boutique platform with over $20bn in AUM across its affiliate managers.
A pragmatic value manager of global equities, Antipodes Partners was founded in 2015 by Jacob Mitchell, former Deputy CIO of Platinum Asset Management, together with a number of former colleagues and like-minded value investors.
The launch of the Antipodes Global Fund – UCITS follows the two-year anniversary of its flagship global long/short strategy, which delivered a 28.9% return since inception on 1 July 2015 to 30 June 2017, in USD terms, against the MSCI AC World Net Index return of 14.4%. Overall, Antipodes Partners manages in excess of $3bn in global equities.
Antipodes Partners builds high conviction portfolios and focuses on capital preservation, with the aim to deliver consistent alpha at lower levels of risk than the overall market. Its investment process seeks to take advantage of the market’s tendency for irrational extrapolation in the identification of investments offering a high margin of safety.
The experienced 13-strong Antipodes Partners investment team includes top sector specialists and a research team with expertise across multiple geographies and industries.
Mitchell explains: “At the core of our investment philosophy, we seek in our long investments both attractively priced businesses that offer margin of safety, as well as investment resilience characterised by multiple ways of winning. The opposite logic applies to our shorts. While the investment case will always be predicated on idiosyncratic stock factors such as competitive dynamics, product cycles, management and regulatory outcomes, we seek to amplify the investment case by taking advantage of style biases and macroeconomic risks and opportunities.”
The Antipodes Global Fund – UCITS, a high conviction portfolio of around 30-60 major long holdings, launched with a highly differentiated portfolio versus the index and peers. Antipodes Partners’ long/short strategy currently has its largest net allocations to Developed Asia, Developing Asia and Western Europe – with a minor net long to the US, the dominant geographic weight in the benchmark and, hence, most other global equity funds.
Mitchell believes today’s market backdrop has created a false sense of security, as investors are confusing the low volatility environment with low risk.
“Central bankers have somewhat cornered themselves. Increasingly, political and economic pressure to normalise interest rates or withdraw stimulus is likely to trigger volatility and widen credit spreads. While the low-volatility regime may endure, investors have grown too comfortable with the central bank reaction function, extending the illusion of stability,” Mitchell adds.
“We are avoiding expensive versions of the bond proxies as long investments, accumulating selective opportunities that have suffered the most from yield curve compression – while increasing our shorts on the beneficiaries of the low rate world.
“We are encouraged by the growing valuation dispersion within and across markets – across region, sector and factor – as we think it is indicative of broadening pragmatic value opportunities, both long and short. Flexible and risk-aware investment strategies seeking idiosyncratic alpha, rather than passive beta, should outperform in an environment where volatility awakens from temporary hibernation.”
Antipodes Partners has also opened a London research office, run by senior investment analyst Chris Connolly, and expects to add further investment expertise to its London office in the coming months.
The Antipodes Global Fund – UCITS includes an early-bird share class, which offers preferential fees for early investors.