Firetrail set to launch LIC

Investment management boutique, Firetrail has announced the launch of its listed investment company (LIC), Firetrail Absolute Return Limited, which would be undertaking an initial public offer (IPO) that would open today.

The firm said the investment strategy would reflect that of the Firetrail Absolute Return Fund which was launched earlier this year and would be a market-neutral portfolio of both long and short Australian equities.

The company would aim to deliver an “alternate” source of returns for investors, independent of movements in the underlying share market, the firm said.

At the same time, the strategy would be largely uncorrelated to both Australian and global equities, Firetrail said.

The investment strategy would be co-led by Patrick Hodgens and James Miller, who previously worked together at Macquarie for over a decade.

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According to Hodgens, having an allocation to equities always delivered a good return for long-term investors, however, since the Global Financial Crisis (GFC) investors were looking for alternate ways to diversify their returns away from traditional allocations to equities and bonds.

“Essentially, what you are getting exposure to is Firetrail’s skill in picking stocks that it expects will go up and down in value. The direction of the share market is largely irrelevant to this investment strategy,” he said.

“We are aiming to deliver a meaningful return to investors above the RBA Cash Rate over the medium to long term. At times we will underperform if we get the stock calls wrong. But over the long term, if we are able to get more stock calls right on average, we will be able to deliver meaningful returns in excess of the cash rate.”