Antipodes Partners originates – as its name suggests – from down under, which chief investment officer Jacob Mitchell says gives the firm a unique perspective when investing in global equities.
Mitchell, who founded Antipodes in 2015 with five colleagues from Platinum Asset Management, where he was previously deputy chief investment officer, says Australia has “a great tradition of investing in global equities”.
“Australia is a small domestic market so we have had to think globally,” he says. “We have generally have a more global portfolio compared to some of our peers in Europe or the US.”
Indeed, the Antipodes Global fund, a long-short Ucits vehicle, has a net exposure to Australia of -0.4 per cent, while Asia makes up the bulk of the portfolio at 37 per cent.
The global fund is one of three strategies run by the firm – alongside a global long-only fund and an Asia long-short portfolio – and is the firm’s first foray into the UK market.
Launched in July this year and seeded with AUD125m (£72m), which Mitchell says puts it among the largest Ucits launches of the past couple of years – the Global fund is now £103m while the strategy has £2.5bn in assets under management.
“The fund could grow to multiples of its current size across the strategy,” Mitchell says.
Targeting wealth managers, family offices and institutional investors, the fund aims to generate absolute returns in excess of the MSCI All Country World Net index over three to five years by investing in mis-priced stocks. The team uses shorts and currency positions opportunistically and to counter the risks of specific long positions.
“Our process is based on fundamental research across global sectors,” Mitchell says. “We look for companies impacted by short-term uncertainty where the market has become irrational about valuations. We use our resources to test if the market is wrong. If they are, then we invest.”
The fund has a relatively low net position in the US at 9 per cent, which Mitchell says is a long way below the benchmark weighting “as there is more interesting value elsewhere”.
Large software companies such as Microsoft (a top 10 holding at 3 per cent) and retailers such as Michael Kors and Coach are the exceptions.
“US retailers have become cheap in the last six months and are trading at the kind of levels seen in the middle of a recession,” Mitchell says. “This is primarily because of the disruption of Amazon. There was an opportunity to buy Michael Kors, which is a strong brand not impacted by Amazon.”
The fund typically has a net equity exposure of between 50 per cent and 100 per cent with a maximum gross exposure of 200 per cent. The net exposure is currently 60 per cent with 90 long positions and 30 short.
“The fund has a long bias,” Mitchell says. “It’s not a market neutral fund. We use shorting to add alpha and manage risk. Over the long term we think we can outperform our equity benchmark with a smoother ride.”
Now a firm of 14 across the Australian and London offices, Antipodes is growing its presence in the UK market. The company has head of resources and industrials Chris Connolly and senior analyst Andrew Gibson in London and is looking to add to the team.
“We have a clear ambition to build out our resources in London,” Mitchell says. “We want to add to the team on an opportunistic basis. We are looking for differentiated talent.”
“The firm is majority owned by its investment professionals,” he adds. “It is an important feature and the best form of long-term alignment.”