The fund rose +2.11%, against fall of between -15bps and -2.1% in the main regional indices.
Disappointing performance from our Philippine holdings (-90bps in aggregate) as foreign liquidation triggered by Duterte accelerates, together with weakness in M3 in Japan, CJ CGV in Korea (jettisoned, fortunately, as latest results are shockingly grim) and Auckland International Airport in New Zealand, left our long book struggling for traction. A renewed surge in Pacific Basin in Hong Kong on the back of better than expected interim earnings, and strength in OOCL, together with a strong showing from Vallourec in France, and reasonable gains in India only partially offset the losses, and the long book was -1.05%. We made +30bps in futures, having re-initiated our index shorts in Hong Kong. The month was rescued by FX gains, +2.83%, the majority of it coming from our short JPY position, with a good contribution from CNH.
It is a little unusual to have a mid-month update; but, after a week of visiting companies in India, and to be honest, a bit bemused by the rather sensational media headlines, we wanted to share with you our thoughts on India’s demonetization program, announced as a complete shock to the markets on November 9, and the adjustments being made in the real economy.
The Tantallon India Fund closed down -1.69% in October, after expenses, with significant intra-month volatility being the stand-out feature as the market absorbed a string of negative global headlines (from prognostication on US Election outcomes and implications for US$ assets, more Fed-speculation as global risk premiums inexorably rise, heightened Brexit antagonism, and very, very high stakes political maneuvering in China), high lined by the very public rift within the Tata Group with the Chairman being summarily ‘replaced.’
There is so little information on Iran you cannot even find the Teheran Stock Exchange on Bloomberg. Yet this is an exchange with a market cap of US170billion, turning over up to US150m/day with zero foreign participation, entirely on the back of domestic mutual fund and retail investors.
In Lv’iv on the morning of my departure I attended the funeral of one of the casualties of the “anti-terrorist operation” in Donetsk. Loudspeakers relayed polyphonic chant from impressively hirsute Orthodox clergy to a cluster of old women and an honor guard, smoking furiously and in no mood to be photographed, waiting to transport the hearse the short distance from the altar to a waiting ambulance.
The Tantallon Fund commenced trading in November 2003 with US5.5m in assets.
In 2005 the Tantallon Fund was named Best Asian Hedge Fund and in 2006 Best Local Hedge Fund (Singapore)
We experienced explosive asset growth, with the fund soft-closing in October 2005 at US450million and hard-closing in January 2008 at US1.5billion. Peak assets, in all products, were US1.7 billion at the end of March 2008
During the financial panic of 2008 we waived 4 consecutive monthly gate-able events and re-paid US1.1billion to clients who needed liquidity, placing our client interests ahead of any business considerations.
The majority of fund AUM is currently internal capital.
Despite this extreme volatility in assets, our commitment to the business has not wavered.
Nick Harbinson and Alex Hill are the principals of Tantallon Capital Advisors, the advisory company to the Fund. We have known and worked with each other since 1990, and have between us over 60 years of investment experience in Asia. Experience in multiple market cycles has honed our ability to identify secular and cyclical economic trends, as well as catalytic triggers. We combine top-down macroeconomic themes with bottom-up stock picking, as well as complementary individual skills with deep sell and buy side industry experience and market knowledge.
Current AUM : US$25 million
YTD results : -8.61%
Lifetime results : +83.39%
Current AUM : US$17 million
YTD results :+6.84%
Lifetime results :+7.09%
In total, our principal investment team has over 80 years of experience in investing and financial markets. On average, our investment professionals have over 27 years of experience. The team today has weathered good times and bad times, bull and bear markets, staying together and remaining committed to our goal of achieving superior investment returns over the long term for our clients. Collectively, we are also significant investors in our funds. Our personal interests and those of our clients are completely aligned.