15 Apr 2015
Pleasingly, the Cyan C3G Fund delivered another solid month of performance, gaining 4.6% to be up 19% after all fees in the 8 months since inception
Download full report here: Cyan C3G Monthly Mar 15
Importantly, the monthly volatility for the C3G Fund, at just 8.7% p.a, remains far lower than the All Ords at 12.9% reflecting our conservative investment philosophy.
THE CYAN C3G PORTFOLIO
We maintained the majority of our key positions in March and were rewarded with continued momentum after impressive results in February. Some of the strongest contributors were:
Financial services software provider Praemium (PPS) and organic baby food supplier Bellamy’s (BAL) both returned more than 20% over the month as the market supported the growth outlook for both business.
The two major consolidation plays we own are diagnostic imaging services business Capitol Health (CAJ) and vehicle collision repair company AMA Group (AMA). Both have recently entered new regions through acquisition and are in the early life cycle stage of their growth plans. Through March they both enjoyed share prices of around 15%.
International satellite service provider Speedcast (SDA) continued its recent rise on solid numbers and a mid-month acquisition, delivering 16% price appreciation by month’s end.
We took a new position in transport, logistics and rural products company, Lindsay Australia (LAU). Our entry point was at a discount to market by participating in a sell-down by an exiting substantial shareholder. We see Lindsay as well positioned on the basis of its growth initiatives over the next couple of years.
THE OUTLOOK
Since inception, the Cyan C3G Fund has held an average cash position exceeding 30% of our investment capital. We continue to hold the view that, on a broader market basis, the majority of company specific valuations look stretched when compared to the domestic economic outlook and growth forecasts in the underlying industries.
For that reason we still hold a relatively high cash balance whilst still seeking company specific opportunities. This approach has already been rewarded, evidenced by our low volatility in returns relative to market. We reiterate our current strategy, based on the following key themes:
Invest in companies that earn through the cycle – these include a number of positions in the financial services, telco and healthcare sectors (eg. BLA, MTU, VTG, CAJ).
Invest in companies with specific growth drivers – these include those exposed to structural changes within industries, those growing market share, or with significant geographic expansion plans, either organically or through acquisition. (eg. BAL, AMA, CAJ, VTG, PPS, SDA).
Avoid high risk and volatile sectors – including any direct resources exposure, highly leveraged businesses or unproven business models.
We look forward to keeping our investors updated with the Fund’s progress.
Download full report here: Cyan C3G Monthly Mar 15
Graeme Carson and Dean Fergie
Cyan Investment Team
