L1 Capital is expanding its investment focus to global markets, citing more compelling opportunities abroad compared to Australia’s concentrated banking and iron ore sectors. Co-chief investment officer Mark Landau highlighted the limited growth potential and high valuations of Australian banks, contrasting them with UK counterparts like Lloyds and NatWest, which offer higher earnings growth and dividend yields at lower price-to-earnings ratios.
L1 Capital is in the process of raising $415 million to scale up its L1 Global Long Short Fund, effectively taking over Platinum Capital after a recent merger. The L1 Global fund will mirror the firm’s flagship Australia-focused fund’s approach, which has delivered 19.1 per cent per annum since its inception. L1 Capital is an investment firm that focuses on identifying undervalued assets and employing both long and short strategies to generate returns for its investors.
The global fund will hold around 80 positions, with an average weighting of 3 per cent. Landau noted that while Australia offers opportunities for stock pickers, those investing passively in the Australian index face limited diversification and earnings growth. The fund will focus on materials companies, including Alcoa, CRH, and Heidelberg, as well as Taseko and Zillow.
On the short side, L1 is targeting electric vehicle maker Lucid, citing concerns about its cash burn. Despite the hype around artificial intelligence, L1 remains cautious, avoiding AI stocks trading at high valuations. Lamm believes the combination of factors will create significant growth in the US economy. Lamm says they have been running a private version of the fund since the start of the year, and it returned 67.5 per cent to the start of November.
