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HM1


nipper
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HM1 is an offshoot from the successful Sohn Hearts and Minds Conference, where investment manager get together in November to pitch their best ideas. The Sohn conference has been running for four years, and attracts a loyal following. As well as the pitches, some of which Blacksheep has listed elsewhere, the conference attracted Luminaries such as Ray Dalio and Howard Marks (who you could be sure had a full agenda elswhere, while in the country).

 

HM1 is a Listed Investment Company and was IPO'ed a year ago at $2.50 a share. An aspect of the LIC is that administrative work is done pro bono, both the contribution of the ideas and the registry and other back room work. There is a management fee of 1.5%pa based on the NTA, and this flows to medical research institutes; so far $20 million has been gifted. The FUM is now close to $600 million and the one-year return has been 25.6%. Currently the LIC is trading a few cents above its NTA.

 

The concentrated portfolio, of between 25-35 stocks, can be both Australian and International assets and comprises the best ideas of both 5 (soon to increase to 6) Core and 13 Conference Fund Managers. Approx 65% of investments are based on quarterly recommendations of the Core Managers while the other 35% are securities based on the annual recommendations of the Conference Managers. At present, about 10% is in cash but the LIC expects to be fully invested by end-December.

 

One of the recommendations doubled the money in a year, most report solid returns in excess of 50% while only one went backwards.

 

Some of the tips for the coming year (more can be found in individual threads) include

Nickel Mines (NIC)

Mineral Resources (MIN)

PolyNovo (PNV) .. short

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raising some capital; taking on a new Core Manager (now #6):

....1 new share for every 8 existing shares held on the record date. (last week)

 

Due to the strong performance of HM1 since listing just over a year ago, this offer price of $2.50 per New Share represents a discount of 20% to HM1âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s closing price of $3.13 on 22 November 2019, a 19% discount to our most recently announced Post Current Tax NTA of $3.09 per share and a 18% discount to TERP of $3.06.

 

The Entitlement Offer is renounceable. Accordingly, if you do not wish to take up your Entitlement, you may sell all or part of your Entitlement on ASX between Friday 29 November 2019 and Monday 9 December 2019 (inclusive) or sell or transfer all or part of your Entitlement directly to another person.

 

Overview

The net proceeds raised from the Entitlement Offer will be used by HM1 to allocate funds to our new Core Fund Manager, TDM Growth Partners. As with our other Core Fund Managers, the allocation will be invested in the three highest conviction investment ideas of TDM.

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  • 8 months later...

The philanthropic listed investment company Hearts and Minds Investments delivered a portfolio return for 2019-20 of 26.1 per cent, ahead of the MSCI World's 4.8 per cent in Australian dollar terms.

 

The board will consider a dividend payment following the realisation of the 2019 conference portfolio which will occur at the end of 2020, the LIC said.

 

The 2019 conference portfolio contributors , with a 35 per cent allocation, were Tesla (Catherine Wood from ARK Invest), Spotify (Hamish Corlett from TDM Growth Partners), GDS Holdings (Beeneet Kothari from Tekne Capital), The Trade Desk (Nick Griffin from Munro Partners), The A2 Milk Company (Jun Bei Liu from Tribeca) and Mineral Resources (Emma Fisher from Airlie).

 

The core portfolio return leaders, with 65 per cent allocation, were Appen, Zillow, Microsoft, Alibaba and Alphabet Inc (selected by Caledonia, Cooper, Magellan, Paradice, Regal and TDM).

 

Only two stocks in the 2018 conference portfolio were sold at a loss.

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  • 1 year later...

market cap of HM1 is close to $1 Billion

Since inception (November 2018) the compound annual investment return stands at 27.5%, compared to 18.4% for the MSCI World Net TR Index (AUD). The post tax Net Tangible Asset value increased by 2.6% in August and has increased at a compound rate of 20.2% since inception.

 

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