QUARTERLY REPORT

DECEMBER 2021

onlyuse personalShifting sands of For

value and growth

Market moves reinforce our convictions

.1 Video insight

PM Capital Global Opportunities Fund Limited

PM Capital Asian Opportunities Fund Limited

ACN 166 064 875 (ASX Code: PGF)

ACN 168 666 171 (ASX Code: PAF)

CONTENTS

Video Insight

1

PM Capital Asian Opportunities Fund

4

PM Capital Global Opportunities Fund

2

Important information

6

  • PM CAPITAL QUARTERLY REPORT | DECEMBER 2021

Quarterly video update

In this video Paul Moore, Chief Investment Officer

only

and Portfolio Manager, Global strategies, and John

Whelan, Portfolio Manager, Global and Australian

Strategies, discuss:

• The next major leg up in the growth to value

rotation

• How increasing rates are impacting expensive

sectors of the market.

• How the Omicron variant provided an

opportunity to invest in Airbus

use

Access the video here.

Access all market updates and insights here.

"With respect to markets, I think the most interesting aspect of

the last quarter is the fact that despite record increases in daily

COVID-19 cases, interest rates actually started to go up and there

personal

was another major leg up in the growth to value rotation."

Listed Company Overview

PM Capital Global Opportunities

PM Capital Asian Opportunities

Fund Limited

Fund Limited

ASX Code

PGF

PAF

Asset Class

Global equities

Asian (ex-Japan) equities

ForListing Date

11 December 2013

21 May 2014

Suggested Time Frame

Seven years plus

Seven years plus

Shares on Issue

390,784,759

57,330,012

Share Price

$1.58

$1.11

Market Capitalisation

$617.4 million

$63.6million

NTA before tax accruals (per share, ex-dividend)

$1.6615

$1.0522

Company Net Assets before tax accruals

$649.3 million

$60.3 million

See page 6 for Important Information. As at 31 December 2021.

  • PM CAPITAL QUARTERLY REPORT | DECEMBER 2021

PM Capital Global

Opportunities Fund

Paul Moore

Global Portfolio Manager

only

PM Capital is delighted to have its global investment strategy named the winner of the

International Equities - Alternative Strategies, 2021 Zenith Fund Award.^ We congratulate

the nominees, and thank Zenith for their recognition of our rigorous discipline of focusing

on genuine long term valuation anomalies.

Simple ideas, simple businesses

Building long term wealth by finding and exploiting investment anomalies around the world

use

Net Tangible Asset (NTA)

Company

3

5

7

Since

backing per ordinary share

December

performance

3

1

Total

Gross Dividend

Years

Years

Years

inception

(After fees and expenses, all

2021

Months

Year

Return

Yield (p.a.)3

figures are unaudited)

1

(net of fees)2

p.a.

p.a.

p.a.

p.a.

NTA before tax accruals

$ 1.6615

PM Capital Global

4.1%

28.2%

20.5%

14.6%

13.1%

13.2%

171.3%

9.0%

NTA after tax (excluding

$ 1.5363

Opportunities Fund

deferred tax assets)

1. Past performance is not a reliable indicator of future performance. 2. Performance adjusted for capital flows including those associated with the payment of dividends and tax, share issuance as a result of option exercise and the dividend reinvestment plan. 3.Based on share price as at 31 December 2021, and the dividend guidance issued to the ASX on 12 August 2021.The intended fully franked dividend is subject to there being no material adverse changes in market conditions and the investment performance of the Company's portfolio.The C mpany's ability to continue paying fully franked dividends is dependent on the payment of tax on investment profits and there can be no guarantee that such profits will be generated in the future.

KEY POINTS

towards simplification with a focus on free cash flow

generation. Its net cash, fortress balance sheet should

• Opportunity to acquire a position in European

lead to a more resilient company going forward.

aerospace company Airbus presented itself

Providing a little bit of history, the Airbus Group began

• Sold out of position in Nordic base metals

life in 1970 as the Airbus Industries consortium, an

initiative between France, West Germany and the UK

miner & smelter Boliden

and emerged as a competitor to Boeing in the late

Copper companies Freeport and First

1980's. Today, while the Boeing 737 remains the most

personal

Quantum continue to outperform

popular aircraft in the sky, the Airbus A320 is the world's

best-selling aircraft with a backlog of orders close to

50% higher vis-à-vis the 737. While some of this recent

PERFORMANCE

success is the result of the grounding of the Boeing 737

Max, another important factor is Airbus' development

The portfolio returned 4.1% over the quarter. The main

of the A321 XLR (XLR being an acronym for "extra-long

p sitive contributors were our positions in the copper

range"). This new aircraft (part of the A320 family) greatly

companies Freeport McMoRan and First Quantum

increases its range to the highest of any narrow body

Minerals in addition to our position in alternative asset

aircraft which in turn opens a vast range of new routes for

manager Apollo Global Management.

airlines. The benefit of this cannot be understated due to

For

PORTFOLIO ACTIVITY

the huge cost saving flying narrow body aircrafts versus

the more commonly used wide body for medium to long

We initiated a position in Airbus, the European aerospace

haul routes.

company, during the December quarter. The resurgence

of COVID-19 due to the emergence of the new Omicron

Turning to our commodity positions, we exited our

position in Boliden in December, a stock we originally

variant caused the shares to sell off sharply in late

bought in May 2020 when the stock was trading below

November, providing us the opportunity to acquire the

200 SEK versus today in the mid 300's SEK. Boliden is

position at an opportunistic price. Our investment thesis is

today as it was over 18 months ago - a well-managed,

based around Airbus becoming the market share leader

lowly-indebted diversified based metals miner& smelter

in the world's largest duopoly in a structurally growing

with a good track record. However, several factors

market with increasing profit margins. In addition, the

clouded the investment thesis and led us to exit the

global COVID-19 pandemic has reinforced Airbus' drive

position.

Bank of America MGM China holdings Apollo Global Management Siemens Freeport-McMoRanRoyal Dutch Shell Howard Hughes
Current stock examples

3 PM CAPITAL QUARTERLY REPORT | DECEMBER 2021

PM Capital Global Opportunities Fund

First, high electricity prices make the European heavy industry uneconomic. Boliden is better hedged than European peers in the short-term, however longer-term Boliden will have to roll contracts at higher cost while remaining competitive in a global market. We do not

know where European electricity prices might settle although the current surge is not just in spot prices but

onlyare sensitive to outages. Lastly, it is clear Boliden stock caught some short-term momentum from the Chile p litical-risk trade as traders sold down Chile-exposed mining names and bought Boliden instead. Such flows can quickly reverse if sentiment changes.

also in one- and two-year forward contracts. Second, Boliden had several recent operational issues including

mine stoppages (due to tighter COVID management) and the odd flooding or fire-related outage. Being naturally

lower grade mines, Boliden depends on world-class operational efficiency to keep costs down, so earnings

useAs of the year end, Boliden remains attractively valued at pot commodity prices, and the stock may move higher. But, given strong commodity prices, this is true of nearly

all resource companies and relative to the sector Boliden stock is no longer compelling. We maintain our large positions across other mineral resource names.

OUTLOOK

Copper positions were a key contributor to returns for the quarter with several catalysts supporting strong

sh re price performances. Supply disruptions have again come into focus with MMG's Peruvian Las Bambas mine forced to cease production given community protests along its primary transportation routes. Las Bambas

c ntributes between 1-2% to annual copper supply when fully operational. Supply disruptions are of heighted importance given the physical copper market remains very tight with inventories at historically low levels. An

Portfolio investments

Weighting^^

Housing - Ireland and Spain

8.7%

Cairn Homes

Global Domestic Banking

34.0.%

Gaming - Macau

7.7%

Alternative Investment Managers

7.5%

personal

Industrial - Europe

9.9%

Materials

17.8%

Energy

9.8%

Other

11.7%

Long Equity Position

107.1%

Direct Short Position

-3.9%

For

increased focus on inflation and inflation beneficiaries also buoyed copper/ gold producers over the month.

While we continue to maintain a constructive outlook concerning commodities, with copper our preferred exposure, we actively reduced our position during the quarter through the sale of call options in Freeport McMoRan which effectively halves our position at a share price of $47.5 and as discussed above, we exited our position in Boliden.

Another stronger performer over the quarter, Apollo Global Management hosted its investor day in October. The stock had traded sideways from May to the end of September as the market grappled with the change in management and the proposed merger with Athene. The investor day allowed Apollo to showcase both the strategic and financial benefits from the merger, complemented with attractive 5-year growth targets. At the end of September Apollo was trading on 10x pro- forma 2022 earnings. While it has now moved to 12x earnings post the ~17% jump in the share price over the quarter, we continue to believe Apollo stock represents compelling value for a high margin business, growing 15-20% pa with one of the best investment records in the industry. Upcoming catalysts to close the valuation discount include giving the market time to digest the completion of the Athene merger which completed earlier this month, and the potential inclusion of the shares in the S&P500 index with the shift to a single share class structure.

We continue to hold a large position in the Australian dollar which has meaningfully underperformed the rise in commodity prices over the last couple of years. A period of higher commodity prices and higher interest rates will benefit the Australian dollar over the medium term.

Currency exposure*

100%

AUD49.2%

USD29.1%

EUR10.1%

GBP7.5%

Other4.1%

* Stated as effective exposure.

Index Short Position

-17.3%

SPX, NASDAQ

Net Invested Equities

85.9%

Total holdings

45

The Company aims to create long term wealth through a concentrated portfolio of generally 25-45 global companies that we believe are trading at prices different to their intrinsic values.

The Company's investment objective is to provide long-term capital growth over seven-year plus investment horizon through investment in a concentrated portfolio of undervalued global (including Australian) equities and other investment securities.

Paul Moore - Chief Investment Officer & Global Portfolio Manager John Whelan - Contributing author

  • PM CAPITAL QUARTERLY REPORT | DECEMBER 2021

PM Capital Asian

Opportunities Fund

Kevin Bertoli

Asian Portfolio Manager

Profiting from hand-picked business operating in the world's growth engine

Net Tangible Asset (NTA)

Since

backing per ordinary share

December

Company performance

3

3 Years

5 Years

7 Years

Total

1 Year

inception

(After fees and expenses, all

2021

(net of fees)2

Months

p.a.

p.a.

p.a.

Return

only

1

p.a.

figures are unaudited)

NTA before tax accruals

$ 1.0522

PM Capital Asian

-5.5%

4.0%

6.2%

5.3%

5.6%

5.2%

46.8%

NTA after tax (excluding

Opportunities Fund

$ 1.0436

deferred tax assets)

1. Past performance is not a reliable indicator of future performance. 2. Performance adjusted for capital flows including those associated with the payment of dividends and tax, share

i uance as a result of option exercise and the dividend reinvestment plan.

use

placed to benefit from the investments being made by the

Chinese government in improving China's airport network,

KEY POINTS

• Omicron weighs on positions leveraged

not just with respects to the construction of new airports

to economic reopening, while Freeport

but also an upgrading of the existing network.

McMoRan advances with the copper price

After a period of sustained strong performance from its

• PAF.ASX corporate activity negatively impacts

COVID-19 lows, oil took a breather during the quarter,

NTA

again as investors digested the impact on demand

from the most recent rise in infections. This negatively

• Cash weighing remains elevated, providing

impacted our position in CNOOC. We believe the impact

flexibility to add new positions

will be short lived with the market refocusing its attention

on the potential for material supply shortages driven by

PERFORMANCE AND POSITIONING

underinvestment, which we view as structural in nature

and likely to drive sustained higher prices in the medium

The emergence of the Omicron variant, which was

term.

announced as a 'variant of concern' by the World Health

Conversely Freeport McMoRan contributed positively to

Organisation in late November, dictated that COVID-19

performance with several factors helping drive copper

was again the central issue impacting markets over the

producers over the past three months. Supply disruptions

quarter. Portfolio positions leveraged to the reopening

have again come into focus with MMG's Las Bambas mine

of global borders and a corresponding acceleration

forced to cease production given community protests

personal

in economic activity were most impacted. Travelsky

along its primary transportation routes. Las Bambas

Technologies was the most consequential detractor

contributes between 1-2% to annual copper supply when

f om performance amongst our reopening plays with

fully operational. Supply disruptions are of heighted

the market contemplating a slower recovery in air travel,

importance given the physical copper market remains very

particularly internationally, than previously anticipated.

tight with inventories at historically low levels. An increased

We continue to hold a constructive mid to long term

focus on inflation and inflation beneficiaries also buoyed

copper producers late in the period.

view on TravelSky predicated on the growth outlook for

For

While we continue to maintain a constructive outlook

the Chinese aviation sector where per capita penetration

remains well below the levels seen in more mature

towards commodities, with copper and oil our preferred

developed markets. As the incumbent GDS infrastructure

exposures, we actively reduced our position during

provider within China with deep-seated relationships with

the quarter selling options over Freeport McMoRan

each of the local airline operators, TravelSky is a direct toll

which effectively halves our position at a share price

on the growth in commercial passenger volumes, not just

of approximately $47.5. We also exited our position in

domestically within China but internationally. In the last

Turquoise Hill Resources.

decade (2010-2019), China's domestic and international

passenger volumes compounded at over 10% per annum

iCar Asia was also a positive contributor after the

and we expect these growth rates to return as authorities

Carsome's takeover offer became binding. The deal which

learn to better live with COVID-19. As a major provider

is structured as a Scheme of Arrangements is set to be

of airport software infrastructure TravelSky is also well

voted on by shareholders in late January.

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PM Capital Global Opportunities Fund Ltd. published this content on 21 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 January 2022 03:31:04 UTC.