L1 Capital, led by co-managing directors Mark Landau and Raphael Lamm, has expressed concerns about the Australian corporate landscape following a long reporting season. They noted lower top-line growth rates and subdued profit growth among Australian companies, including banks and industrials. L1 Capital is an investment management firm, overseeing billions in assets and employing both long and short strategies. Platinum Asset Management is a funds management company investing in global equities.
Despite recent share price volatility, with former market darlings like Reece, CSL, and Domino’s Pizza facing significant sell-offs, L1 Capital is selectively optimistic. They are betting on ASX-listed companies Aurizon and Viva Energy for potential turnarounds. However, Lamm and Landau are more enthusiastic about stocks benefiting from global tailwinds, such as uranium miner Nextgen Energy, Bluescope Steel’s North American assets, and Fraport, the operator of Frankfurt Airport. They also see potential in Finning, a Toronto-listed distributor of Caterpillar heavy equipment in Canada and South America.
Landau notes that Australia is becoming a less attractive investment destination due to stretched valuations, cost pressures, and regulatory hurdles. This perspective is influencing L1’s proposed merger with Platinum Asset Management, which is progressing towards shareholder approval. While the merger has garnered market support, L1’s plan to take over the management of Platinum Capital faces resistance, particularly from Wilson Asset Management (WAM). WAM has launched a counterproposal, aiming to manage Platinum Capital and appoint its own directors.
The battle for Platinum Capital is intensifying, with both L1 and WAM vying for control. Lamm and Landau emphasise their commitment to long-term growth, while Wilson criticises Platinum Capital’s past underperformance and calls for remediation before performance fees are charged. The fate of Platinum Capital will be decided at an extraordinary general meeting on October 1, with the fundie war of words expected to continue in the coming months.
