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Transcription of Finance News Network Interview with Antares High Growth Shares Fund, Senior Investment Manager, Richard Dixon



Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from the Antares High Growth Shares Fund is its Senior Investment Manager, Richard Dixon. Richard welcome to FNN.



Richard Dixon: Thank you for having me.



Lelde Smits: What does the Antares High Growth Shares Fund aim to do?



Richard Dixon: The High Growth Shares Fund aims to significantly outperform the ASX 200 index over the medium to longer term. There are three key strategies that we employ to achieve that, that differentiate it from traditional Australian Share Funds. Firstly there’s short selling, secondly enhanced long positions or larger overweights and thirdly, active trading.



So the Fund can short sell up to 25 per cent of the Fund value and in stocks that we feel are going to underperform, or fall in value. We can then reinvest those proceeds into stocks that are preferred, that we like to take larger overweight positions. And this really diversifies and increases the opportunities set that we can invest in. And thirdly, we employ some active trading to take advantage of shorter term opportunities, such as pairs trading and the like, to add value of shorter term situations.



Lelde Smits: How do you choose stocks for the Fund?



Richard Dixon: We have a large and experienced equity investment team, which undertakes detailed bottom up valuation analysis and a very extensive company visitation program. We believe there are eight key factors that influence company valuations over the long term. And some of these include such things as earnings trends, balance sheet strength and quality of management, and industry structure, would be some of the key factors that we focus on. Once we put all those inputs into our valuations, we then come up with a valuation and a target price for where we think that stock is likely to trade to, in the following 12 months. And we then combine this with our own market insights to derive, to construct the portfolio.



Lelde Smits: So Richard, what makes this Fund different?



Richard Dixon: Well there are three things that make this Fund different. Firstly, I think that the Fund provides exposure to high quality and diversified Australian share portfolio, based on our proven investment process. Secondly, I think the strength of the team; we have a very stable and diversified experienced team. I’ve been working on the Fund for 13 years and have been a lead manager for the last seven. And I really think that stability through different cycles and conditions helps to deliver the outcomes. And I think thirdly, the performance. The Fund has delivered a return of 11.4 per cent, net of all fees per annum, since inception 14 years ago.



Lelde Smits: Can you explain the investment philosophy behind the Antares High Growth Shares Fund?



Richard Dixon: We employ a style-agnostic approach where we aim to deliver a strong performance, in different market conditions. So we really feel that we are trying to have a contrarian bias in the way that we invest, with a strong valuation focus. And we really want to protect peoples’ capital as much as we can in more difficult market conditions. So we’re very focussed on strong risk adjusted returns for clients.



Lelde Smits: Finally Richard, which stocks have you recently added to the portfolio and why?



Richard Dixon: So one stock we’ve added to the Fund in recent months has been Sydney Airport Holdings Limited (ASX:SYD). So we initiated a position in the stock late last year. And really we’re attracted to the strong valuation appeal in the stock, the long life monopoly asset of Sydney Airport, which is the core asset. And really we saw some healthy upside towards, for that valuation to be closed. Now some of the catalysts for that to close included, there was a sell down occurring, Macquarie Group Limited (ASX:MQG) was going to distribute their stake in Sydney Airport Holdings Limited (ASX:SYD). So we took that as an opportunity to actually increase our stake, as that stock came onto the market.



Secondly we saw some other opportunities for that gap to close, there’s strong interest in infrastructure assets from Pension Funds all around the world. And we felt that yeah; with that sort of valuation discount that that would close in the preceding months. There is also an opportunity for them to potentially buy back some of the leased assets, that are owned by Qantas Airways Limited (ASX:QAN) that would be accreted to the valuation for Sydney Airport as well. So all of these factors are contributors to add it in and continue to own the stock.



Lelde Smits: Richard Dixon, thank you for the introduction to the Antares High Growth Shares Fund.



Richard Dixon: Okay, thanks very much.





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