This investment team has been exposed for a bout of greed and...

This investment team has been exposed for a bout of greed and hubris. What other result can we draw? I am so furious. I invested a large stake with a 600m FUM in mind, and then they took 1.3 billion. I also convinced family members with no stock market experience to invest their limited funds based on their prior track record of outperformance in down markets. Even the most elementary investor knows that too large a FUM will produce substandard results, especially if you sell short.

L1's decision to more than double the initial intake - a cut and dry example of placing a manager's own interests over that of shareholders (compare this decision with Ophir, for example) - was then compounded by needlessly rushing to invest in a falling market, rather than cautiously averaging in over time. Still no mea culpa has followed. I have no faith that given the amount of money being managed, they will be able to achieve meaningful outperformance. 

The excuses by the team and/or their supporters have mounted. First, it was that value stocks have chronically underperformed. Then it was that the fund will do better in a falling market. Then it was a series of unforeseen negative developments in investee companies. Then it was that stock selection has been trimmed and limited to their 'best ideas' (one wonders why best ideas weren't focused on in the first instance). 

Now us long suffering shareholders are trapped. The NTA has fallen so far we have no choice but to hang on. To sell would be irrational. As we wait, it infuriates me further to know they are taking a healthy 'management fee' for burning our capital. The only thing I'll give them credit for is buying on market themselves. We can only hope this continues, stock selection improves, and management rises to the challenge of cleaning up their own mess over the next 1-3 years. It would also help to see a bit of humility in their monthly and quarterly letters. They might be millionaires, but they have been entrusted by ordinary people to grow their limited capital. I hope they remember it.