The fund rose +14.03%, returning us modestly to the black, +2.2% year-to-date. Regional indices were all sharply higher, rising between +7, and +11%.
This was one of our best month’s since the fund’s inception. Unusually I managed NOT to detract too significantly from the very strong individual performance of pretty much all 30-odd names in the portfolio. Futures cost -4.5%, principally hedging our large Australian exposure, and also insuring a little prematurely the risk of a roll-over in the S+P. FX gains however largely offset these, with a reversal of some of the costly trades in March. We made +2.5% in the AUD, +1.2% in Norwegian krone (a safer play on the overshoot in energy that the Ruble), and gave back modest amounts being long JPY. FX net contributed +2.93%.
These are extraordinary times; we hope that you and your families are healthy and safe.
The Tantallon India Fund closed up +8.23% in April, with the broad market narrative focused on looking beyond the current economic meltdown (we are carrying a 20% cash position) towards an eventual recovery. The stark disconnect between economies in ‘lockdown’ and equity markets rallying sharply off the March lows, reflect ‘relief’ at global central banks seemingly committed to back-stopping risk assets through massive liquidity interventions, domestic investors anticipating further fiscal, monetary, and policy support, and a sense that Modi’s early decision on a national lockdown had allowed India to hopefully escape the ‘worst.’
The fund gained 5% in April in line with a broad market recovery and cash holdings in excess of 50%. Our technology holdings contributed a majority of the gains and account for 70% of our equity holdings.
We remain suspicious of this rapid tech-led rebound, especially in semiconductors and tech hardware which we follow closely. We may have underestimated that a large proportion of funds need to stay fully invested and identify technology as part of the solution to our new Covid-19 future while the business models of many other sectors have gone from somewhat challenged to severly disrupted.
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$27 million
YTD results : +2.17%
Lifetime results : +93.31%
Current AUM : US$18 million
YTD results :-21.37%
Lifetime results :-6.10%
Current AUM : US$11 million
YTD results :-6.6%
Lifetime results :+8.8%
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.