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.

The Tantallon Fund: long only performance versus net return. Re-thinking our approach to the short side.

 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.

 

Long/Short Performance Since Inception

(Click on each month's data below to read the monthly pdf report)

 

Latest Investment Report

Tantallon Fund, July 2019

The fund slipped a further 40bps, leaving us -7.1% year to date.

I was modestly upbeat at the performance of our stock selection most of the month, with gains approaching +2% driven largely by an opportunistic purchase of an old favourite in Jakarta (Media Nusantara) which contributed +1.5%, and strength in Gazprom and our US holdings SEA and Alibaba. However poor results from Kering, and more pertinently a profit warning from IRC in Hong Kong, principally due to a non-cash item to do with a refinanced loan facility and higher depreciation charges, led to us losing all of our gains on the final day of the month, a source of massive frustration. Our fx positions cushioned results modestly, although strength in AUD largely offset gains in our long yen position, and we made a few basis points in our futures cover as we lowered net exposure.

Read full report (pdf)

Last Three Months Reports (pdf)

 

For details and performance of our other funds, please check:

The Tantallon India Fund

Tantallon Tech & Sustainability Fund

 

Other News

Post card from Iran

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.

 

News from Ukraine

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.

Previous Performance Data & Reports

Tantallon Fund Details