Majedie Tortoise

The Majedie Tortoise Fund is a variable net long short global equity fund aiming to generate positive absolute returns in all market conditions. The strategy launched in UCITS format in August 2007 and is managed by Matthew Smith (lead PM) and Tom Morris. It's investment philosophy is best described as value contrarian, and while this is a stock picking fund there is generally a significant macro influence (credit, industrial and consumer cycles analysis) driving the portfolio sectorial/thematic positioning. The fund employs a simple common sense investment approach seeking to capitalise on opportunities in stocks with significant upside or downside potential. On the long side, the fund aims to identify companies trading at low valuation (relative to their peers/historic range) where operational performance is improving but the market’s expectations for medium-term profit potential are low. On the flip side, the fund seeks to short positions where market’s expectations are too high and valuation too rich. The final portfolio is relatively concentrated comprising 30-50 long and 20-40 short positions. The fund exposures have varied over time. The historic range for the net exposure has been between -20% and +90% (21% on average); gross exposure range has been 60% to 150% (112% on average). After a challenging 2017-2019 period for the strategy (and for most value focussed managers) the fund was able to fully capitalise on the ‘Value’ rebound, with the team expanding the long book through investing in high quality cyclical names during the March/April chaos (predominately European industrials and banks) whilst also running a small single short book, which led the fund’s net exposure to average over 80% in H2 2020. In recent months, net exposure has come down notably towards its long-term average driven by the addition of two US futures short positions (as the opportunity set for single shorts remains unappealing).