Several prominent Australian fund managers are experiencing significant losses after marking down their holdings in Corporate Travel Management. This comes after the company’s shares were suspended from trading in August due to issues with its full-year audit. Corporate Travel Management provides travel management solutions to corporate clients, offering services such as booking flights, accommodations, and transportation. Last month, the company admitted to overcharging UK customers by at least £80 million, raising concerns among investors.
ECP Asset Management and Bennelong Australian Equity Partners are among the firms with substantial exposure to Corporate Travel. ECP’s ASX-listed Emerging Growth Fund, which held a 7.6 per cent stake, reported a 14.1 per cent loss in November. ECP manages over $3 billion in assets. Bennelong, holding Corporate Travel across multiple funds, faced a considerable impact on its returns, with its Australian equities fund declining by 9.3 per cent in November and 14.7 per cent over three months.
Other shareholders, including Forager Funds Management and Wilson Asset Management, have also reduced the value of their Corporate Travel positions by 50 per cent. While some funds with long positions are struggling, hedge funds with short positions, such as Totus Capital, have profited from the situation. Totus Capital’s Alpha Fund gained 8 per cent in November, driven by its short position in Corporate Travel.
QVG Capital also hinted at potential future benefits from a short position in a travel company, widely believed to be Corporate Travel. Despite this, QVG’s Long Short Fund fell 4.8 per cent in November due to a pullback in small-cap shares. The troubles at Corporate Travel Management highlight the risks faced by fund managers in navigating volatile market conditions and company-specific challenges.
