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PM Capital shows conviction and patience pay off

Winner of the Money Management/Lonsec Fund Manager of the Year Award in the Long/Short Equities Category, the PM Capital Global Companies Fund is a concentrated portfolio, with its listed equity component typically holding 25 to 45 securities diversified across global equity markets.

The investment process is built around the simple principle that the best way to preserve and enhance wealth over the longer term is to “buy a good business at a good price”.

Commenting on the win, Lonsec said: “Paul Moore has been a mainstay of Australia’s funds management industry over three decades. Moore’s determined, longterm, contrarian perspective has rewarded patient and stoic unitholders.”

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Paul Moore, the founder and chief investment officer of PM Capital, believes what sets his shop’s investment process apart from peers is that it truly invests with conviction and patience.

“If we don’t have conviction that an investment will provide a reasonable rate of return, we don’t invest in it – period. We have a small, focused team that only looks for the genuine anomalies in markets - no matter where they occur around the world,” Moore says.

“A little bit of knowledge can be dangerous in investment. We prefer to know a lot about the 20 per cent of companies that are likely to be anomalies, rather than knowing a little about all the stocks in an index.”

Moore also says PM Capital’s longer-term investment horizon of seven to 10 years makes a big difference to the process and also results in lower portfolio turnover compared to peers.

“In many cases, genuine investment anomalies play out over an extended period of time and often offer multiple ways of being played across difference geographies,” he says.

“Provided you’ve done your work and have identified a strong business at an anomalous value, then what’s required is patience and conviction.”

As at December 2017, PM Capital’s global long/short strategy had been the number one performer in its peer group over five, six, seven, eight and nine years.

“All of our funds were started to answer problems we ourselves had when investing capital. Later on, we invited other investors to invest alongside us so there is a considerable alignment of interests there,” Moore says.

“Our investment philosophy and process has been consistently applied at PM Capital for 20 years. It’s been successful for our co-investors.”

Nominated as finalists alongside winner PM Capital were the L1 Capital Long Short Fund and the Platinum International Fund.

 




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