Harvest Lane Absolute Return Fund
Harvest Lane seeks to generate superior, risk-adjusted returns regardless of prevailing market conditions with a particular focus on ‘corporate events’, including mergers and acquisitions.
Harvest Lane Asset Management Absolute Return Fund (Fund) is a high conviction absolute return fund which aims to produce high absolute returns using a conservative yet nimble investment approach.
The Fund has a strong focus on preservation of capital and its trades have almost no dependence on traditional asset class returns.
The Fund invests very selectively in stocks subject to special circumstances, which the manager believes have limited risk of capital loss and a skew towards positive returns.
In practice, the Fund takes advantage of merger arbitrage and other event-driven opportunities in a highly selective manner – and only when its assessment is that these represent a strong return/risk trade-off.
Given its low correlation with other investments and a focus on absolute returns, the Fund may be used in conjunction with other investments as part of a defensive portfolio allocation.
Alternatively, it can be used as a standalone lower risk alternative to growth investments. Considering the Fund’s strategy identifies a large number of opportunities that include fully franked dividends, the Fund may also suit self-managed superfunds and other low tax paying entities depending on their investment objectives.
The manager only charges a performance fee on returns above the RBA Cash Rate and in the event that the Fund underperforms its benchmark, Harvest Lane Asset Management receives no other payment from investors in the Fund. Management fees go to pay costs and service providers.
The principals of the Fund, and their friends and family are also heavily invested in the Fund which further aligns the interests of its staff with that of its investors.
Corporate activity is a rich source of investment returns and encompasses a multitude of opportunities – takeovers, mergers, asset sales, demergers, and restructurings, amongst others. Opportunities are often mispriced as the strategy is viewed as unattractive by larger professional managers (typically owing to capacity constraints) and as such, often ignored.
Within a well-constructed portfolio of such opportunities, the performance of each position becomes largely driven by stock specific factors rather than broader equity market movements and macroeconomic influences.
The benefit of a portfolio constructed entirely from such opportunities is that not only does it exhibit minimal correlation to market indices, but minimal correlation within the portfolio itself. Appropriately managed, it is a strategy characterised by attractive risk adjusted returns, capital preservation, and true diversification.
Over the last decade we have constantly refined a strategy that encompasses everything from opportunity identification though to position crystallisation. The investment strategy works hand in hand with risk management at the portfolio level to ensure each position is risk weighted appropriately to the transaction specifics, which is key to extracting optimised performance.
Our experience and robust investment process sees us well placed to assess all relevant variables for a given transaction and compare available returns against those risks in order to determine if a position should be included in the portfolio and if so, at what level of exposure.
The fund achieved a return of 13.81% for the full FY23. Click here to view historical performance.
Harvest Lane is the investment manager for the Fund. Harvest Lane is an Australian incorporated company owned by its staff.
Harvest Lane has signed an investment management agreement, which is in an industry standard format and provides for termination of the Investment Manager in a number of circumstances including where the Investment Manager becomes insolvent, materially breaches the agreement, ceases to carry on its business or in certain other circumstances. There are no penalty payouts in the event the investment management agreement is terminated. There are no unusual or onerous (from an investor’s perspective) terms in the investment management agreement. There have been no adverse regulatory findings against Harvest Lane or its personnel.
The key investment personnel who have day to day responsibility for the running of the Fund are shown below.
Luke is Lead Portfolio Manager at Harvest Lane Asset Management. Luke has 19 years’ experience trading Australian and international equity markets on both a proprietary basis and on behalf of retail and wholesale clients.
In 2006, Luke co-founded and was Managing Director of successful private client broking and advisory firm HC Securities. Under Luke’s leadership, HC Securities championed performance based brokerage, developed numerous successful trading strategies, and reviewed and underwrote select corporate offerings.
Luke previously worked at ETRADE Australia (since acquired by ANZ) where he was the equities dealing manager. In this role, Luke was responsible for the entire retail dealing function. Luke commenced his career at Platinum Asset Management.
Luke has a Bachelor of Commerce from Macquarie University and numerous industry qualifications.
Ben joined the Harvest Lane Asset Management team in 2016, specialising in position analysis and fundamental valuation. In 2021, Ben was promoted to Portfolio Manager following his increasingly valuable contribution to both the team and portfolio throughout his time with the company.
Ben has a strong understanding of financial analysis and capital markets, and has honed his skills in recent years to supplement and refine the existing strategies employed by the company.
Ben holds a Bachelor of Business (Economics and Marketing) from University of Technology, Sydney.
Chad is responsible for the day-to-day operations of Harvest Lane Asset Management. Chad has over 12 years’ experience in both Australian and international financial markets.
Chad started his career at OptionsXpress providing trading support and execution services to retail and wholesale clients.
Chad subsequently worked at HC Securities as a Private Client Advisor where he continued to mentor and support new and existing clients. Chad was instrumental in creating a night desk where he provided trade execution for various trading strategies targeted at the US Equity, FX and Futures markets.
Having met the founders of Harvest Lane Asset Management during his time at HC Securities, Chad joined the Harvest Lane team in 2014.
As a former Designated Trading Representative, Chad holds a number of industry qualifications as well as a Bachelor of Finance from Newcastle University.
Relevant Documents
You should read the PDS, TMD (if applicable) or any Investment Memorandum (or other offer documents) related to this product before making an investment decision. These documents (if available) can be found at https://harvestlaneam.com.au/, or if this is a "wholesale investor only" investment, can be viewed by contacting the Product Issuer identified on the aforementioned website.
Statutory Statement
The issuer of this product is identified at the top of this page. The PDS and target market determination for the product are available in the Documents section of this listing. Prospective investors should consider the PDS before deciding to acquire the product. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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