The 15 of 15 Alternative Fund managed by Portland Counsel has exited its holdings of Meta Platforms stock and reacquired shares in luxury brand LVMH, which owns Hennessy and Louis Vuitton.
Meta Platforms Inc, which owns Facebook, Instagram and WhatsApp, is currently attempting to explore the next generation of the internet, referred to as the metaverse, but Portland is sceptical of the project.
The 15 of 15 fund is relatively small, with a net asset value of US$20 million, but it is one of four mutual funds managed by Portland Investment Counsel Inc, or Portland Counsel for short, for which billionaire investor Michael Lee-Chin is CEO and portfolio manager.
The 15 of 15 fund invests in global equities and debt-like securities. It considers 15 principles or attributes prior to buying a stock.
The top contributors to the fund’s performance at half-year ending March 2023 were Telix Pharmaceuticals, conglomerate Berkshire Hathaway, and home construction company D.R. Horton. The bottom contributors were cable TV provider Altice USA, Meta Platforms, and Indian conglomerate Reliance Industries.
Portland’s reinstatement of its investment in LMVH, the largest global luxury business, is linked to what it said was the “growth in mass affluence” in emerging markets.
Its exit of Meta Platforms was due, it said, to the Mark Zuckerberg-controlled company’s “increasingly aggressive capital allocation decisions towards a, as of yet, highly uncertain metaverse project”, which Portland said “dramatically skewed the risk profile” of its investment.
Meta’s stock currently trades at 31 times its annual earnings even after doubling in price this year. It started the year at a low of US$124 and steadily rose over the months to US$255 on Thursday. LVMH has a price-to-earnings of 29 times after starting the year at US$694.10 and gaining 18 per cent to US$823.40 on Thursday.
At the end of March, LVMH accounted for 2.8 per cent, or about US$560,000, of the portfolio’s US$20-million net asset value.Meta previously accounted for 2.6 per cent or about US$470,000 of the portfolio, which in September 2022 stood at US$18.12 million, according to Portland’s December financials.
The founder of LVMH, Bernard Arnault, is among the world’s wealthiest people, surpassing Mark Zuckerberg, the co-founder of Facebook, after technology stock valuations cooled in 2022.
During the six-month period, the 15 by 15 fund also added to its investments in Brookfield Asset Management and Brookfield Corp of Canada, Altice, and conglomerate Danaher Corp.
The fund’s main investment is in Telix Pharmaceuticals stock, which accounts for 30.5 per cent of the portfolio’s net asset value, while rounding out the top five are Berkshire Hathaway Inc Class B, 20.1 per cent; and Brookfield Corp, 8.8 per cent; Horizons Cash Maximizer, 6.9 per cent; and Purpose High Interest Saving, 6.0 per cent.
Along with the 15 by 15 Alternative Fund, Portland Counsel also acts as investment manager for Portland Global Alternative Fund, Portland Life Sciences Alternative Fund and Portland North American Alternative Fund.