Dalton Asia Pacific UCITS

Investment Objective

The investment objective of the Dalton Asia Pacific UCITS Fund is to seek long-term capital appreciation through a diversified portfolio of long and short positions in equity securities with a primary focus on the Asia Pacific region. The Fund strives to buy shares in companies that Dalton believes are likely to benefit from the dramatic growth and structural changes taking place in Asia while shorting shares of weak companies that Dalton believes have catalysts for declines. In addition to performing on-site due diligence and rigorous fundamental analysis, the investment team engages in active collaboration with management when appropriate

Reference Index

MSCI AC Daily TR Net Asia Pacific Index

Latest Meeting Note

Meeting 10 Mar 2021

Dalton Investments was founded in 1999 and currently has 15 members on its investment team including founding partner and lead portfolio manager James Rosenwald III, with the firm managing approximately $3.2bn across a variety of clients... Read more

Dalton Investments was founded in 1999 and currently has 15 members on its investment team including founding partner and lead portfolio manager James Rosenwald III, with the firm managing approximately $3.2bn across a variety of clients. The UCITS business manages $400m across three funds, Japan long-only, India Equity (with the flexibility to short) and the flagship strategy, the Asia Pacific fund. The investment philosophy focuses around four central pillars; investing in good businesses eg strong cashflows and balance sheets, a “moat’ against competition, and best ESG practices. Secondly, the team seek a significant margin of safety on investments and look for a material discount to intrinsic value across 3-5 years. Thirdly, there’s a focus on the alignment of interests between owners/operators and shareholders. Finally, the team look for companies that can demonstrate a track record of managing capital effectively. Initial idea generation involves a combination of quantitative and qualitative analysis combined with the screening of c. 15,000 companies. This creates a monitoring list of c. 1,000 companies which analysts undertake deeper due diligence and company interaction on. The list is refined further when ESG analysis is considered. There are currently four central investment themes that are reflected in the portfolio; 5G & the digitalisation of society, new entertainment, growing wealth & consumption behaviour, and governance reform & ESG transformation. The long book typically consists of smaller, entrepreneurial companies benefiting from structural change in Asia with managements committed to maximising shareholder value, whilst the short book contains big, bureaucratic (often state owned) enterprises driven by objective other than maximising shareholder value. The fund can have a max net exposure of 70% to Japan & Greater China and 50% to the rest of Asia, with the overall portfolio having a typical net exposure of 30-70%.

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2023 0.3 0.6 1.0 0.5 0.1 0.9 0.3 0.8 0.6 0.9 0.9 0.4 0.5
2022 0.4 0.1 0.6 1.0 0.9 0.3 0.9 0.8 0.8 0.9 0.7 0.4 0.7

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