AGS Select Long Short Fund is a long/short Australian
equities fund, with a long bias. The investment
manager of this fund is Sydney-based Tricom Investment
Management Limited (TIML). The investment manager
draws on the experience of Albert Landman, in
managing the AGS fund's assets. Albert Landman
has over 11 years' experience in financial markets,
previously working as derivatives dealer for Macquarie
Bank, Equities Advisor and Chief Equities Strategist
for Tricom Equities Limited.
Launched in June 2002, The AGS Select Long Short
Fund has returned 69% since inception with an
annualised return of 18% and annualised volatility
of 7%. The fund currently has US$3 million in
- Could you tell us briefly about
your investment strategy?
The fund has a long bias but reserves the right
to return holdings to cash or short stocks during
times of market weakness, or when individual
stock weakness is seen. The concept is to smooth
market returns. We offer exposure to a generally
rising market while protecting capital and potentially
profiting from a falling market.
- How do you go about selecting
your investments? Any preference for small,
mid or large-cap stocks?
Stock selection is a combination of fundamental
research and technical factors for measurement
of market sentiment and for timing purposes.
As a rule there is no attempt to pick highs
or lows on stocks. Sentiment confirmation is
sought before investing. The fund will usually
hold a core group of medium-term holdings (10
to 25 stocks) but will trade around these positions
as well as take short-term views on the market.
Core holdings will usually equate to 30 to 70%
of total funds under management.
- Investment timing is one of the
most crucial factors for making a successful
investment decision. How do you take care of
Investment timing is largely technical and news
driven. The overall direction of the sector
and the market is also considered critical.
We are cautious about swimming against the tide.
- What is the exit strategy for
your investments? Do you have any predefined
standards for that?
Capital protection is considered vital and as
a result downside is pre-determined on individual
trades and managed in accordance with those
limits. These will only be over-ridden when
there is an exogenous, all encompassing market
shock. In relation to profits, shorter-term
trades will usually have target levels while
core positions will be handled more via trend
- How strong is your research on
companies in which you invest? How often do
you conduct company visits, attend industry
Fundamental research is used largely
through individual company records and broker
reports. Company visits are conducted and we
leverage off the expertise of our three in-house
analysts. However we remain highly conscious
of becoming too close to individual situations.
The fund is more concerned with robust risk
management controls rather than one-off stories.
- Your fund has generated an annualised
return of 18% since inception. What would you
attribute as the most crucial factors for this
Capital protection, discipline, a variety
of information sources, relationships with other
fund managers, flexibility.
- Could you tell us about your
prior investment experiences and how does the
fund benefits from it? Who are the other key
members in your team? What experiences/skill
sets do they bring with them?
Original market training was purely
in the derivatives markets, hence the fact that
the concept of shorting stocks to profit during
market declines is seen as second nature. I
have been practicing professionally in the Australian
equities market for over ten years as an investor,
advisor and fund manager.
Tricom Investment Management has built an experienced
team of managers, analysts and support staff.
We are able to leverage off the expertise of
these individuals enhancing all facets of the
fund and allowing me to focus on what I do best.
- What makes you different from
other Aussie long/short hedge funds?
The belief that the stockmarket is inherently
a wealth creation vehicle means that in general
the fund will maintain a long bias. It is not
'market neutral'. Shorting is used sparingly
as a rule and the fund will rarely be net short
unless we are in a protracted period of negative
market returns, ie 2001 and 2002.
- You have a lot of open capacity
in your fund size. How do you plan to fill it?
Apart from local Australian investors, are you
targeting other markets to raise additional
capital? Any plans to travel in this regard?
Up to this point no active marketing of AGS
fund has been in place. We have felt it important
to build a solid foundation before seeking large
sums of capital. We have used this base building
period to develop our track record and importantly
the systems and people to support a rapid move
to the next phase in our development, which
we are now undertaking.
In the coming months we intend to build momentum
with our marketing, speaking to local and overseas
investors, FOFs, family offices and other sources
- Going forward, what are your views
on the Australian equities market for the rest
The market remains reasonably attractive
in comparison to other domestically available
asset classes such as bonds, property and cash.
As a result we continue to have a positive disposition
and wish to stress that we do not attempt to
pick market tops and bottoms. A positive bias
will be maintained until returns evaporate.
Having said that, we are conscious that the
last reporting season contained many areas of
weakness which are not fully reflected in the
current strength of our top-heavy weighted indices.
Tricom Investment Management Ltd
61 2 9210 7853