L1 Capital’s Global Long Short fund has delivered exceptional returns in its first year, driven by savvy investment decisions in both long and short positions. The fund, managed by chief investment officers Raphael Lamm and Mark Landau, returned 92.8 per cent net of fees since its launch at the start of last year. L1 Capital is an investment management firm that invests in undervalued assets with long-term growth potential. Their strategies focus on identifying companies with strong balance sheets and sustainable competitive advantages.
The fund has capitalised on the surge in commodity prices through long positions in gold producers, aluminium, and uranium miners. However, its success has been significantly boosted by short positions targeting overvalued technology stocks. L1 navigated the recent tech sell-off by focusing on companies with high price-to-earnings multiples or those not generating profits. One notable short position was against electric vehicle maker Lucid Group, whose shares have fallen 50 per cent in four months amid soft demand and supply chain issues.
Lamm and Landau increased the fund’s exposure to US companies tied to economic growth, believing markets underestimate the strength of the American economy. They also topped up positions in BlueScope Steel and James Hardie, both of which have climbed 20 per cent this year. The global fund returned nearly 70 per cent last year, with major gains from Alcoa, Mineral Resources, Nucor, and Taseko Mines. They also profited from rallies in UK lenders Lloyds Banking Group and NatWest.
The hedge fund is betting on ‘quality value stocks’ over expensive growth stocks, anticipating this trend will continue until 2026. According to the duo, the best opportunities are in infrastructure, gold, and uranium. The global strategy mirrors L1’s flagship Long Short Fund, which focuses on Australia and returned 60.1 per cent in the 12 months through January, outperforming the sharemarket by 52.8 per cent. Both strategies benefited from BlueScope Steel’s rejection of a takeover offer.
