The fund rose a further +15.71%, taking us +18.2% year-to-date. Too much of a good thing can be wonderful.
Our returns were driven by a strong advance in our equity book (+13%), and reasonable additional contributions from FX positions (+2.7%) principally from the on-going recovery in both the Norwegian krone and the AUD. Our futures trading, which normally detracts from results in rising markets, was mercifully flat. Our largest performance driver were our US positions, with an exceptionally strong performance by both SEA and JD.com. The first quarter’s earning numbers from SEA in particular were extremely strong, as the lockdown across its key regional footprint in Indonesia, Vietnam and Thailand drove revenue in both their gaming division and their e-commerce business, with GMV expanding +74% y/y.
These are extraordinary times; we hope that you and your families are healthy and safe.
The Tantallon India Fund closed down -3.13% in May, another volatile month as the markets weighed a ‘look through to a new normal’ underpinned by ‘at all costs’ fiscal, monetary, and policy support, against the stark economic reality of extended global ‘lockdowns’ and job losses.
Fact: the trade-weighted dollar was the worst-performing major asset, while distressed growth proxies rebounded sharply (Brent crude, US$-denominated emerging market sovereign bonds, US high-yield debt, industrials, materials, financials, developing market and European equities and credit, commodity currencies, and small cap stocks) on the belief that ‘reopening’ in multiple virus-hit geographies would herald a recovery in global risk appetite.
The Fund gained 7% in May and erased the losses for the year, putting it well ahead of global markets YTD. We initiated several new positions and reduced cash from over 50% to a still conservative 40% level.
On the tech side, the continued recovery in eMemory drove our positive results. Revenue and earnings momentum started accelerating for the company’s second generation embedded memory IP. Gen2 looks to generate a multi-year growth wave as more large chip firms are now following the early adopters. The firm’s next gen security product is also generate increasing attention among chip and system companies to extend growth expectations beyond the Gen2 cycle.
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$31 million
YTD results : +18.22%
Lifetime results : +123.68%
Current AUM : US$17 million
YTD results :-23.83%
Lifetime results :-9.03%
Current AUM : US$11 million
YTD results :+0.0%
Lifetime results :+16.5%
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.