THE TANTALLON FUND

Tantallon Fund since inception

 

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.

Tantallon Fund Chart

 

Long/Short Performance Since Inception

(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
+169.33%
                       
2020
+42.34%
2019
-3.69%
2018
-19.44%
2017
+37.04.%
2016
-11.32%
2015
-3.01%
2014
+0.24%
2013
+20.14%
2012
-0.12%
2011
-9.85%
2010
-3.54%
2009
+29.45%
2008
-28.36%
2007
+20.24%
2006
+12.99%
2005
+22.75%
2004
+25.40%
2003
+2.00%
                   

Latest Investment Report

Tantallon Fund, July 2020

The fund rose +6.57%, taking our full year to +42.34%.

Gains in July were driven principally by our positions in Australia (Fortescue), Korea (our fuel cell names, and Samsung Electronics) and the US, where SEA once again trumped returns adding nearly 2% to NAV alone. The total equity book returned +5%, we made an additional +2.5% in FX (EUR and NOK, offset by small losses in the AUD which we have closed), and we frittered away -92bps in futures as our net exposure was reined in modestly to the high 70’s.

July was characterized by vibrant numbers from some of the world’s largest companies, and a corresponding surge in their valuation, with Apple, the world’s largest, leading the way with an 11% surge on its quarterly results which left the S+P barely changed on the day. Having camped out opportunistically in both AAPL and Microsoft for a few months early in the second quarter we have moved on, driven by an increasing conviction that we could find better upside in an albeit fairly limited part of the Asian universe. Earnings from two of our top five positions deserve comment, with Fortescue reporting final quarter numbers of record shipments, record costs (US13/tonne) and record selling prices (US81!). China steel production continues to accelerate, and worsening Covid in Latin America and Africa makes the market skeptical of any supply response, and pushes spot iron ore to US120/tonne, comfortably beating gold as the commodity of the year (and with none of the speculative length).

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

Domicile/Corporate Structure:
Cayman Islands Master Feeder Fund
Established:
2003
Terms Currency:
USD
Minimum investment:
USD 1,000,000
Annual management fee:
1.5%
High water mark:
Yes
Valuations:
Monthly
Subscriptions:
Monthly
Redemptions:
Monthly w 30 day notice, 25% gate
Service providers
Administrator:

Portcullis Trust (Singapore) Ltd

Prime brokers/Auditors:

Morgan Stanley & Co. International plc /
PricewaterhouseCoopers LLP

Lawyers:
Maples & Calder
Shearman & Sterling LLP
Listings
Bloomberg:
TANTALF KY (offshore feeder)