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| Fund Overview | Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives. |
| Manager Comments | Harvest Lane saw a resurgence of M&A activity in the first three days of June alone, while successful completion in some legacy holdings came as welcome news (much to the portfolio's benefit). They noted that, at the same time, some much needed confidence has been reinjected back into the domestic M&A market, however, they added that deal spreads continue to remain elevated reflecting the market's cautionary bias. The deal breaks Harvest Lane saw in recent months have largely been backed by private equity; Abano Healthcare, Metlifecare, CML Group, Olivers' Real Foods and Village Roadshow have all had bidders that are either entirely or majority backed by private equity, whereas completed deals in the last few months have typically come from strategic/corporate buyers. Harvest Lane noted they now view 'binding' transactions with the same level of suspicion as they have long viewed 'non-binding and indicative' approaches from private equity. Harvest Lane remain active with each new opportunity that presents itself. They believe current market conditions warrant an increased focus on risk management, however they noted they won't hesitate to transact where they recognise a favourable risk/reward opportunity. |
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