The Perpetual Pure Equity Fund is a new Australian equity long/short product that has an internal target of 10% p.a. (net of fees). The fund aims to achieve this objective over the market cycle without losing capital.
The Fund invests in Perpetual’s highest conviction bottom-up long and short stock ideas, regardless of the stock’s size or index weighting. The Fund’s default position is to hold cash and then opportunistically invest in stocks that are likely to rise (i.e. invest long) or fall (i.e. short sell) in value. The gross and net market exposure ranges for the Fund are wide at 0% – 200% and -20% to 100% respectively (net is expected to typically be 20% to 60%). Net and gross market exposures are an outcome of the volume of long and short stock ideas the Manager sees in the market, rather than the portfolio managers making top down market calls.
Fund facts:
• Highly regarded investment team with expertise in long/short equities.
• Flexible investment approach with ability to opportunistically invest in stocks long and short or alternatively sit in cash when opportunities are scarce.
• Fund capacity capped at $350m (soft close) to allow the flexibility to invest long and short across the market cap spectrum (Fund is market cap unaware).
Zenith’s View
While the Fund is new, Zenith has a high degree of conviction in not only Perpetual’s seasoned team and research process, but also the individual portfolio managers responsible for the Fund. As portfolio managers, Paul Skamvougeras and Anthony Aboud both have experience in managing long/short portfolios and have strong track records. We are far more comfortable endorsing a long/short fund that is run by seasoned long/short professionals, as opposed to long only managers applying their skills to long/short.
Zenith rates the Fund Recommended.
The product assessment report for the Fund can be found under the “Funds Research”/“Alternative Fund Reports” section of our website.