I also am of the belief that Long short funds are one of the biggest fund manager scams of the last 10 years. An excuse to charge higher fees on FUM and an opportunity to be wrong on both the long and short side.
L/S is incredibly hard to do well, and even harder to beat the index given the volatility in theory should also be greatly reduced. In reality, I'm aware of only 1 global fund that has managed to meaningfully outperform using L/S over what is still probably only a medium time frame.
The FUM for platinum seems to be stickier than I anticipated given the poor relative performance and the loss of the team to Antipodes. I'm of the belief that the team from Antipodes will ultimately fail so I'm not sure it will turn out to be that big of a loss anyway.
Notwithstanding I think an investment in PTM offers fairly attractive risk to return opportunity so long as they can work out a way to offer an attractive investment proposition to their current clients. One of the biggest challenges in funds management is getting the FUM in the first place, they have already done that hard work, so they just need to work out how to generate a return that doesn't lead to more causalities.
I think it's a huge mistake to be too rigid with ones investment thesis as the world changes. You don't need to compromise on all of your values or rules, you just need to understand what redefining value and growth truly mean in 2020. Being nimble is a quality that MFG have embraced and it has resulted in meaningful long term outperformance. If the pendulum shifts don't forget that MFG don't have to buy mega-cap growth stocks, they can just as easily pivot towards value if they define them as pragmatic growth opportunities, just as PTM have anchored themselves to over the years.
PTM Price at posting:
$3.19 Sentiment: None Disclosure: Not Held
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