Lennox Capital Partners has said it would not consider investing in Nuix as the company lacks both a management team and future growth strategy.
In a webcast, the two managers, James Dougherty and Liam O’Donohue were asked about IPOs it had considered over the past year.
Nuix listed on the Australian Securities Exchange in December but almost immediately saw its share price fall after missing forecasts and allegations of insider trading by its former chief financial officer. Shares in Nuix were down 72% since it listed versus returns of 12% by the ASX 200.
The pair said: “It is too early in the turnaround to look at Nuix. We have spoken to people in the industry and the technology is strong, they do have some intellectual property there which is a differentiator. But that IP is only worth so much.
“We would also need to have confidence in the management and their strategy to monetise the IP and Nuix don’t even have the management let alone a strategy.
“There has been brand damage done and that has led to a confidence decline. From our point of view, we can’t build an investment thesis because it is missing management and governance which is crucial so we will wait and watch.”
The Lennox Australian Microcap fund had returned 72% over one year to 31 May, 2021, according to FE Analytics, versus returns of 37% by the Australia small and mid-cap sector within the Australian Core Strategies universe.
