Lanyon is reopening its flagship fund as market volatility creates opportunity

Markets have been volatile in the wake of the COVID-19 crisis, but Lanyon Asset Management sees opportunities amid the chaos.

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Lanyon Asset Management is reopening its flagship fund to new investment, seeking to raise $45 million.

The equities investment firm, with offices in Adelaide and Sydney, closed its Lanyon Australian Value Fund to new investment in 2013, but managing director David Prescott said some “compelling opportunities’’ had been identified, motivating the move to reopen to new money.

The fund, which invests solely in listed equities, has delivered an 11.8 per cent annualised return since it started on July 1, 2010, against the All Ords’ 7.8 per cent, and over the past 12 months has returned 8.6 per cent against a 7.2 per cent decline in the benchmark.

“In terms of the amount of capital, we’re aiming to raise about $45 million, which we think is the right level for the opportunity we are seeing in the markets,’’ Mr Prescott said.

This would bring the fund up from about $110 million currently to more than $150 million.

“In short, we’ve seen a return to volatility in markets and volatility can create opportunity,’’ Mr Prescott said.

“We’re seeing opportunities in a number of sectors in the market and we’re keen to put some capital to work, but it’s not specifically focused in any single sector. We’re getting a strong level of inbound inquiry.’’

David Prescott speaking at an investment conference.

Overall, Lanyon manages about $365 million across various entities. Mr Prescott said the client base included institutional investors such as superannuation funds but also not for profit organisations, family offices and private investors across Australia.

Retail investors also have the opportunity to invest with a minimum $25,000 allocation.

The fund is open-ended with no lock up periods or entry and exit fees. Mr Prescott said the fund was targeting investments which delivered long-term returns for clients.

In a letter to clients Mr Prescott says the firm’s investment philosophy is “somewhat unique in the Australian market and is based on the key tenets of capital preservation, aiming for superior long-term compound growth and concentration of our funds in our best ideas. Our focus is on deep fundamental research and high conviction long-term investing.

“We are a long-only, actively engaged investor and we hold cash when suitable opportunities are not available.’’

Mr Prescott said the aim was to compound capital at 10-15 per cent per annum.

“If we can do that over the long term we’ll be really pleased. We’ve had a pleasing 12 months given the market environment and hopefully we can continue to generate those types of returns going forward.’’