The Tantallon Fund is a Cayman Island vehicle which invests in listed equities in the Asia Pacific region. The fund targets a concentrated portfolio of 35 names, with a 3-5 year investment horizon. At the portfolio manager’s discretion the fund may hedge its market and currency exposure, and short sell individual securities.
In the 10 years since the fund’s inception the un-hedged long book of the Tantallon Fund has returned an annualised +12.2% compound. The net return is a significantly more pedestrian +7.2%. While the ability to go short protected the fund somewhat in the latter half of 2008, our experience since then, in the face of persistent intervention by regulators and central banks, has been consistently bitter. In mid-2012 we concluded that shorting was detracting from our ability to travel and research companies and resolved to discontinue the practice. However we saw little upside in surrendering the option and we retain the flexibility to hedge. An investor’s equivalent of the Hippocratic Oath, First, Do No Harm, is a discipline we have attempted, with modest success, to apply when looking at either market or individual stocks on the short book since then.
(Click on each month's data below to read the monthly pdf report)
| Return | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inception | +98.95% |
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| 2019 | +1.27% |
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| 2018 | -19.44% |
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| 2017 | +37.04.% |
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| 2016 | -11.32% |
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| 2015 | -3.01% |
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| 2014 | +0.24% |
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| 2013 | +20.14% |
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| 2012 | -0.12% |
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| 2011 | -9.85% |
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| 2010 | -3.54% |
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| 2009 | +29.45% |
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| 2008 | -28.36% |
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| 2007 | +20.24% |
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| 2006 | +12.99% |
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| 2005 | +22.75% |
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| 2004 | +25.40% |
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| 2003 | +2.00% |
The fund eked out a gain of roughly +1%, and we limp to the close of the first quarter +1.27%, lagging the broad market advance significantly.
Having vented my spleen on India last month the market proceeded to confound me by advancing smartly, and gains from Aegis and Reliance contributed the bulk of the returns of the fund in March. Aegis has been sold in entirety, and the Vakrangee position has been raised into one of the largest in the fund, as the miasma of negative publicity surrounding the firm dissipates and a new chief executive, known to us from his days at Blue Dart the air freight operator, begins to address market scepticism as the rebranding exercise in its “kendra” outlets gathers pace. Hong Kong and China, where the bulk of the fund is now invested, by contrast disappointed, with copper stock MMG under pressure as a result of an industrial dispute blocking access to its Las Bambas mine in Chile. Melco and our clutch of Chinese property companies were also lacklustre. Universal Robina in the Philippines was our second biggest contributor, but broadly speaking I am dissatisfied with the beta we are getting from the clutch of South East Asian names purchased in December last year; we have exited our positions in Thailand, principally CPAll, and will do the same in Indonesia.
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.
Portcullis Trust (Singapore) Ltd
Morgan Stanley & Co. International plc /
PricewaterhouseCoopers LLP