Nice idea in concept. But difficult to translate into a robust, actionable investment strategy. The premise was ok, there are all these great ideas coming out of the Sohn H&M Conference, can we turn it into a great fund? Well, not really.
The H&M conference ideas encompass long and short. The H&M LIC will be long only and only part of the portfolio will be the ideas floated at each years conference (40%). The remaining 60% of the book is best ideas from the managers who's ideas are tabled at the conference, not just the stocks tabled. So ultimately, while the media always seize on how amazingly well the Conference ideas have performed, don't expect the LIC to do the same. It is a diluted version.
Once a stock is tabled and invested into, as I understand it, the LIC will hold it for a year then sell it to make way for the next idea. There is no analysis being undertaken as to when is the optimal time to exit. This to me flies in the face of fundamental investing. None of the managers involved would do this in their own funds. So why invest like this? To me, it makes no sense.
Also, to me it sounds like too many chiefs and not enough indians. Whose going to run this thing and engage with the market? This is the lifeblood of a LIC
Ultimately, for me its a no. Yes, the charitable aspect is fantastic and yes the managers involved are very high caliber. And from an absolute return perspective, it may generate some decent portfolio returns. But if you want to blend philanthropic with investing, I'd use FGX/FGG or if you like unlisted, Third Link.
