Alium Capital Management’s decision to identify niche opportunities in the market is paying off handsomely for the fund and its investment clients.
The Sydney-headquartered investment fund specialising in unlisted companies and public equities, has continued to record significant returns on investment since entering the market in late 2016, with a strong 15% return for September, despite the ASX closing down 0.7%.
The company, which is currently recording a remarkable 39% return for the year, is also kicking goals with its chosen investment vehicles.
Rajeev Gupta, a partner at the firm says that as per Alium’s mandate and strategy, the firm continues to provide uncorrelated returns to the market by finding companies in the technology and innovation sectors in the early stage, pre-IPO and listed arena which it feels represent attractive valuations and are often mispriced to offer exceptional return potential over the short to medium term.
The firm highlights two key investments that have been strong drivers for the company’s recent success in building return on investment.
One of those was one of the company’s first investments titanium additive manufacturing specialist Titomic (ASX: TTT) which has successfully completed a $6.5 million IPO.
Titomic focuses on advanced materials used in a variety of product applications and reserves the exclusive right to exploit and commercialise the co-developed CSIRO technology in industries such as aerospace, automotive, building and construction, industrial equipment, marine, medical equipment, military and sporting goods.
“In the medium term we view Titomic’s $48 million market capitalisation as being attractive relative to the revenue opportunities available to the company,” Jason Rich, an Alium partner said. The other significant recent contributor to Alium’s performance was investment it made earlier in the year in the cryptocurrency/blockchain space.
“As a fund, we are big believers in blockchain and feel strongly that the ‘distributed ledger’ will impact institutions and will effectively marginalise the ‘middleman’ in transactions between two parties,” Rajeev Gupta said.
“Furthermore, we believe that cryptocurrencies, as an asset class, have become too big to ignore as names like Bitcoin and Ethereum have attracted too much capital to be simply dismissed as a high risk ‘fad’ as the market cap of the cryptocurrency universe is now approaching US$150 billion.”
These two examples exemplify the Alium philosophy.
“We are focused on emerging technology and innovative companies, covering the spectrum from Series-A-to-Z fund raisings, as well as investing in large liquid stocks and themes, and we allow our investors to co-invest in select deals,” said partner, Michael Considine.
Alium’s success to date is no fluke. The team behind the company has a combined 75 years of industry experience and relationships which they leverage to identify alpha generating deals.
That team includes:
Michael Considine who has over 16 years of equity market experience predominantly in Asia and Australia after starting out as a private client advisor with Salomon Smith Barney before moving to Singapore and working for Morgan Stanley.
Mr Gupta who has 20 years of experience analysing, investing and building technology companies after beginning his investment career Goldman Sachs in Hong Kong, Singapore and New York ; and
Jason Rich, whose 18 years of experience in equity markets includes a stint with at Goldman Sachs in London, and starting his own hedge fund in Singapore before returning to Australia.
“In addition, the managers have experience in research, stock selection and portfolio & risk management to be active in the market segment that is overlooked by larger funds with restrictive mandates,” Mr Gupta said.
“Importantly, our experience in managing risk and avoiding draw-downs bodes well to protect capital during times of heightened volatility.”
Alium Capital Management is an investment manager catering to sophisticated investors seeking family office style flexibility and exposure. Its specialisation of investing in listed and unlisted emerging companies, with a particular emphasis on technology and innovation seems to be paying off.