Indian Pacific Fund
The Fund has an absolute return focus (long/short with long bias), has no cash limit, and can invest in both large and small cap companies (For Wholesale Investors Only)
The fund was founded in 2018 with the view that whilst equity markets rise in the long-term investors need to be careful to preserve capital at certain points in the cycle. We also believe that managing smaller AUM, and taking selective short positions provides flexibility that many managers don’t have hence broadening the opportunity set and allowing us to be different.
With this in mind The Indian Pacific Fund (The Fund) has an absolute return focus (long/short with long bias), has no cash limit, and can invest in both large and small cap companies.
We personally own 100% of our business, are heavily invested alongside our unitholders in the fund, and do not invest in equities outside of the fund as we want 100% of our time and effort dedicated to making money for unit holders and ourselves via long term unit price appreciation. Our family interests are firmly aligned.
Our investment process is a fundamental bottom up process with a focus on balance sheet risks and identifying companies with strong and reliable cash flows, in good industries, with strong management teams, at attractive valuations.
Our analytical process is both quantitative and qualitative, based around 4 key factors:
- Balance Sheet – set hurdles must be met to enter investable universe
- Business Quality – detailed company and industry assessment
- Management – experience, trustworthiness, competence are key
- Valuation – method varies by sector. DCF, SOTP, multiple analysis
A company is excluded from the long investable universe if there is a negative rating in any of the above categories. Our portfolio typically consists of a concentrated 15-30 long positions in stocks with the most compelling upside to our valuation, along with selective short positions.
In simple terms, the below diagram illustrates stocks we want to own at Indian Pacific Funds Management:
How does the short process work?
The short process is exactly the same as the long process but in reverse. We want to be short companies with:
- Stretched balance sheets – a poor business with a weak balance sheet can unravel quickly
- With negative businesses and management ratings
- That are also over valued Positive/Neutral/Negative rating for each factor
- In addition to this we are looking for downside catalysts in every short position
Combined, this component of the portfolio reduces net market exposure, reduces market correlation, provides hedging opportunities, and broadens the opportunity set.
How many short positions will we hold and what % of the portfolio will it be?
- The size of the short portfolio will vary with (1) prevalence of opportunities (2) our view of the current market levels
- Number of short positions will typically be (but be not limited to) 10-15
- Short portfolio will typically comprise between 10-30% of AUM (but be not limited to that amount)
- Index and other futures may be used at times for protection purposes
Risk management
- All short positions have strict upside alerts set which, if triggered, result in a re-evaluation of the investment case
Industry Structure/ Company Life Cycle analysis
Stocks and sectors are increasingly being exposed to “disruption”. We believe this makes industry analysis an even more important (than normal) component of equity analysis when considering an investment. Below is a simple life cycle chart we consider for all companies as part of the industry analysis component of our investment process.
Information on this website is not to be distributed to any retail clients within the meaning of the Corporations Act 2001 (Ch). This website contains performance figures and information in relation to Indian Pacific Fund Main Series. Actual performance may differ for investments made in different classes or at different times throughout the year. This website is intended to provide general background information only. It does not constitute investment, tax, legal or any other form of advice or recommendation to be relied upon when making an investment or other decision. Past performance is not a reliable indicator of future performance. While all reasonable care has been taken to ensure that the information on this website is complete and correct, no representation or warranty is given as to the accuracy of any of the information provided, including any forecasts. To the maximum extent permitted by law, the Trustee and Investment Manager and related bodies corporate, directors, employees and representatives are not liable and take no responsibility for the accuracy or completeness of this information. No investment in the Fund should be made without fully reviewing the information, the disclosures and the disclaimers contained in the Information Memorandum.
Indian Pacific Funds Management is an independent Australian equities fund manager based out of Perth, Australia, founded by Preston Hamersley in February 2018.
Preston Hamersley is the founder and portfolio manager at Indian Pacific Funds Management.
Preston has over 23 years experience in financial markets. He began his career at JBWere & Son in Perth before moving to Sydney with then Goldman Sachs JBWere (GSJBW) in 2004 as part of their institutional equities team. Over the next 9 years at GSJBW and then Goldman Sachs, Preston advised long only and hedge fund clients across research, corporate, and execution functions. Preston became partner of the firm in 2010.
Preston joined Airlie Funds Management at its inception in late 2012 and spent 5 years helping to build the business to over $7bn in AUM prior to its sale. He has covered a broad range of sectors as an analyst and has an intimate knowledge of companies spanning large and small caps in Australia and offshore.
Preston holds a Bachelor of Commerce (Finance/Business Law) from University of Western Australia in Perth and has completed a Post Graduate Certificate in Applied Finance and Investments at the Financial Services Institute of Australia (FINSIA).
Peter Phillips is responsible for strategy and distribution at Indian Pacific Funds Management.
Peter has over 25 years experience in financial markets spanning London, Hong Kong & Sydney. He began his career at Paterson Ord Minnett in Perth before joining the parent company, Ord Minnett in London in 1998. Working on the institutional desk he advised large European fund managers and hedge funds on Australian equities.
In 2000, Peter joined Goldman Sachs based in Hong Kong to help set up an Australian equities trading presence as well as advising Asian institutions, sovereign wealth funds and hedge funds. This role encompassed risk management, corporate, research and transactional responsibilities.
Peter moved to Sydney in 2002 with Goldman Sachs and was made a partner of the merged entity GSJBW in 2008.
In 2009 Peter joined Bank of America as Head of Execution Services with responsibilities for electronic, portfolio, high frequency and sales trading. In 2015 Peter was appointed Head of Equities for Bank of America in Australia. Within this role Peter had oversight for the institutional equities platform including prime brokerage, stock loan, research sales and trading. He was also the responsible executive for the local franchise.
Peter holds a Bachelor of Commerce ( Accounting / Business Law ) from Curtin University.
Relevant Documents
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