Australian Equities
Australia All Cap
Investment Philosophy and Process
Investment Philosophy
The TAMIM Australia All Cap strategy uses a value based approach to identifying companies that meet our fundamentals based investment process. We aim to generate long term capital growth by targeting companies exhibiting strong financial capabilities of growing earnings, cash generation and industry tailwinds.
“Replicating a market index ultimately does not make sense for individual investors, why would you invest in a company simply because it is listed on the stock market. Expanding the universe of possibilities can provide investors with the ability to invest in companies right across the Australian share market from Commonwealth Bank right down to the micro-cap space. Through taking an unconstrained approach to our investing we believe we can provide superior risk-adjusted returns.”
Ron Shamgar, TAMIM Australian All Cap Portfolio Manage
Investment Objectives
Generate absolute returns above long term equity market returns.
Investment Process
We use a bottom up investment approach that can be broken down into 5 steps:
Idea generation:
ASX company news flow, broker research and company roadshows, news publications and social media forums.
Company research:
We conduct a company analysis on its business model, industry structure and future catalysts.
Financial analysis and modelling:
We are looking for businesses that meet our key investment criteria.
Management meeting and analysis:
We look at management historical track record and alignment with shareholders (remuneration/incentives/shareholding)
Valuation and portfolio allocation:
Each company is valued using a range of valuation approaches. Portfolio allocation based on margin of safety and financial strength of the business.
Portfolio Construction & Risk Control
To mitigate the key risks, risk control is built into the investment process:
- Flexible cash holding (0-100%)
- Allocate bigger positions into businesses we understand best, have a large margin of safety and exhibit strong financial characteristics
- Leverage, liquidity, quality of management, competitive threats and execution risk.
- Diversified portfolio – by company and industry. Targeting 20 to 50 stocks.
- Active management visitation and careful monitoring of holding news flow.
- Adjustment of holding exposure to reflect conviction and valuation.
Key Investment criteria include:
- Revenue visibility – recurring or contracted revenue
- Industry leadership
- Earnings growth 10%+ over next 2 years
- High cash conversion and free cash generation
- Low capex
- Conservative balance sheet (interest cover, debt/equity)
- ROE and ROIC 10%+
- Management with track record and aligned to shareholder interest
- Discount to Intrinsic valuation
- Identifiable catalysts for share price re rate
We use a strict criteria on when to sell:
- Fundamentals have changed
- Share price exceeds our valuation
- Better opportunities with larger upside elsewhere
Downside Protection: Option Overlay
If deemed appropriate, we may utilise options over Australian and Global equities and indices to provide protection to our Australian equity portfolios. This is designed to reduce market risk while still allowing portfolios to take on the stock specific risk they seek.
We will typically hold out of the money options (strike 10% or more away from spot) with a 3 to 6-month duration.
This does two things for the Portfolio Manager:
- Provides cash to the portfolio in a large downside market move.
- Allows the portfolio to buy positions in companies it would like to own while removing the market noise from the
decision.
Fund Facts
Investment Parameters
| Management Style: | Active |
| Reference Index: | ASX 300 |
| Number of Securities: | 20-50 |
| Single Security Limit: | 10% (typically 5%) |
| Investable Universe: | ASX (focus on ASX300 ex20) |
| Market Capitalisation: | Any |
| Derivatives: | Yes |
| Leverage: | No |
| Portfolio Turnover: | < 25% p.a. |
| Cash Level: | 0% – 100% (typically 5 – 30%) |
Fund Profile
| Investment Structure: | Unlisted Unit Trust (available to wholesale investors) |
| Minimum Investment: | $100,000 |
| Management Fee: | 1.25% p.a. |
| Admin & Expense Recovery: | Up to 0.35% |
| Performance Fee: | 20% of performance in excess of hurdle |
| Hurdle: | Greater of RBA Cash Rate + 2.5% or 4% |
| Entry/Exit Fee: | Nil |
| Buy/Sell Spread: | +0.25% / -0.25% |
| Applications: | Monthly |
| Redemptions: | Monthly with 30 days notice |
| Investment Horizon: | 3 – 5 years + |
| Distributions: | Annual |
Invest via TAMIM Fund
Request additional details by using the form or if you’re ready to invest select the apply now button.
Invest via IMA
The TAMIM Australia All Cap strategy is available as an Individually Managed Account (IMA). Please see the Strategy Summary for terms or request Investment Documentation via form.