Carmignac Portfolio Long Short European Equities

Investment Objective

The Fund aims to outperform its reference indicator over a period of at least three years, using an active, discretionary investment strategy. The net exposure will typically range from -20% to +50%.

Reference Index

15% EuroStoxx 600 + 85% EONIA

Latest Meeting Note

Meeting 25 Jun 2020

The Carmignac Long-Short European Equities Fund is a pure bottom up, stock picking equity long short fund with a pan-European focus, managed by Malte Heininger. Malte Heininger joined Carmignac in 2014 and was appointed lead PM of the fu... Read more

The Carmignac Long-Short European Equities Fund is a pure bottom up, stock picking equity long short fund with a pan-European focus, managed by Malte Heininger. Malte Heininger joined Carmignac in 2014 and was appointed lead PM of the fund in January 2016. Prior to Carmignac he ran a similar strategy at SAC Global Investors, while also working previously in distressed debt which is evident in his investment process, which has a focus on balance sheet analysis. The portfolio is constructed with differing time horizons with core long positions typically held for 3-5 years, with short to mid term trades used opportunistically. There is a focus on non-macro driven sectors, so the portfolio typically excludes banks, oil & gas, airlines and other sectors where stock prices can be significantly impacted by non-fundamental factors, resulting in a bias towards more consumer driven sectors, healthcare and technology where stock specific factors are the key drivers. The portfolio is run in a concentrated manner with large position sizes for the highest conviction stocks, there’s typically 40-60 stocks held with 40% of the book within the top 10 positions. When analysing stocks the team undertake deep fundamental analysis and follow a four-step process. Firstly, the team look to develop a clear investment thesis based around revenue growth and margin expansion prospects. The second step is to evaluate whether the investment team’s view is non-consensus, to ensure they are adding value and not following the crowd. Thirdly, the team look to identify a catalyst which can support their revenue and margin targets, this could include a new product, new management or M&A activity. Finally, analysis is combined to determine the risk reward nature of each trade, with long positions requiring a minimum of a 30% upside target to reach the portfolio. From here the portfolio is constructed via four buckets; core longs (high conviction and strong business models, 50% of portfolio, 3-year+ horizon), trading longs (good companies with near term opportunities), relative value / special situations (very short term, e.g. M&A candidates, <5% portfolio) and alpha shorts (structurally challenged or grossly overvalued companies). The portfolio has a net exposure range of -20% to 50% and the PM is not afraid to use it, though it is important to note changes to the net are not made based on macro calls, but always via changes due to underlying holdings.

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2019 1.0 0.1 0.3 0.0 0.2 0.5 0.7 0.8 0.3 0.6 0.2 0.2 0.3
2018 0.6 0.7 0.1 0.9 1.0 0.8 0.9 0.5 0.0 0.3 0.8 0.5 0.8

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