Investment Objective

The fund implements a long/short equity strategy focused on the US consumer sector. Prentice seeks to produce strong risk-adjusted returns with little or no correlation to global equities by applying a fundamentally driven approach to companies that are lightly covered by sell-side research (typically mid caps). The portfolio is concentrated with the aim of generating alpha on both side of the book. Net exposure ranges from -10% to +30%.

Latest Meeting Note

Meeting 08 Nov 2019

The research team met with Michael Zimmerman, portfolio manager of the InRIS Prentice Fund. Micheal is a US consumer specialist with over 20 years of experience managing long/short equity portfolios (previously at SAC, Omega, and Lazard)... Read more

The research team met with Michael Zimmerman, portfolio manager of the InRIS Prentice Fund. Micheal is a US consumer specialist with over 20 years of experience managing long/short equity portfolios (previously at SAC, Omega, and Lazard). The strategy provides exposure to the broad US consumer sector (historically about 20% of the S&P500) with a primary focus on less trafficked, lightly covered names often ignored by larger buy-side firms, with a market capitalisation between 1 to 10bn. On the long side, the manager uses fundamental analysis and proprietary data intelligence-based research (data scraping of google searches, custom surveys, etc) to invest with high conviction in companies that have experienced periods of prolonged underperformance (trading at historically cheap valuations, depressed margins, negative sentiment) and that are deemed to be close to an inflection point (new strategic plans, new products, new management). These positions should offer at least a 3:1 risk-reward; the holding period for longs is reasonably short (6-9 months on average). On the other hand, the manager takes short positions in companies generally trading at historically rich valuations facing business or financial difficulties, including cost pressures, slowing growth, and competitive challenges. Portfolio concentration is expected to be high (30-60 stocks in total), 20 longs and 30 shorts on average. The average holding period for shorts is 3-6 months. Portfolio turnover is above 4x (2-3x in terms of names). Gross exposure is typically 80-140%, while net exposure ranges from -10% to +30%.

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2019 0.8 0.2 0.8 0.6 0.7 0.4 0.2 0.8 0.2 0.4 0.1 0.3 0.3
2018 0.3 1.0 0.7 0.8 0.4 0.9 0.3 0.6 0.8 0.2 0.2 1.0 0.7

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