Platinum increases $6b International fund's cash levels
The opportunities in markets are less “mouth-watering” than people expect, according to Platinum, which is leading its flagship International fund to hold almost a quarter of the portfolio in cash.
The $6.7 billion Platinum International fund had a low invested weighting at 56.2% and 23.7% in cash, up from 18.5% in May, which had been steadily rising over the year, last June it had 79% invested and 14.7% cash.
The firm said the cautious positioning, which also included a reduction in short positions from 28% to 20%, reflected concerns about the impact of rising interest rates and future volatility as markets moved away from a near-zero interest rate environment.
It did not feel this was the time to be buying assets and indicated it would hold this cautious allocation for the timebeing.
Co-chief investment officer, Clay Smolinski, said: “I would say there are more opportunities than there were, but they are not mouth-watering yet as we still have this hangover from the very distorted COVID-19 spending. You can point to some big falls in these hot areas, but given that the starting valuations were so wild, there is less opportunity than you might first think.
“There are also still opportunities to short. There are some incredibly dubious companies running lossmaking business models that are completely reliant on capital market funding, and we think that funding will be much harder to come by over the next 12 months.
“On balance, while things are starting to get interesting, we're not quite ready to phase out the short book and cash entirely just yet, but we are ramping up our buying activity.”
AUTHOR
Laura Dew
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
