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King Tide first invested in LHC in February 2014 and they have been a core holding ever since. LHC is now closed to new money which enables them to manage risk and maintain performance, aligning them with their investors.  This is something we value at King Tide.  Six of our underlying managers are now closed to new investors.

LHC has emerged as the top performing hedge fund in 2018-19, but now it’s selling some of its hottest stocks because prices are too high.

 

LHC Capital, the Sydney-based hedge fund which topped the returns table in 2018-19, says it is responding to a “valuation conundrum” caused by lower interest rates by selling its winning trades.

The fund manager is taking advantage of the strength in markets to offload its holdings in Pro Medicus and IPH, which it said were now “more than fully valued”.

Low interest rates have created a “valuation conundrum” and it was not clear if declining cash rates were in fact a buy or sell signal, Mr Hughes and Mr Aboud explain in their investment letter.

Read more: https://www.afr.com/business/banking-and-finance/hedge-funds/why-lhc-capital-is-selling-its-biggest-winners-20190723-p529t2