News

Lonsec awards 'Recommended' to Bennelong Kardinia fund

14 November 2012

The Bennelong Kardinia Absolute Return Fund (the Fund) has been awarded a ‘Recommended' rating by Lonsec. The Fund is managed by Bennelong Funds Management's boutique, Kardinia Capital, which is headed-up by investment professionals Mark Burgess and Kristiaan Rehder.

In Lonsec's report, the Fund is described as "an attractive offering for investors seeking an absolute return focused strategy, with a strong focus on capital preservation".

The underlying strategy was launched in May 2006 by another trustee and managed by Portfolio Managers Burgess and Rehder before they established Kardinia in August 2011. In addition to their combined 38 years' experience in the financial services industry, both Portfolio Managers are co-invested into the Fund.

Logical and disciplined research and portfolio construction

The report stated that Lonsec was pleased to observe relatively clear linkages between the research process and portfolio construction. Long-term core positions stem from "the Manager's fundamental research efforts", with short selling used to enhance the Fund's flexibility and opportunity.

The team's top-down approach was identified as a significant driver of the Fund, "not only from an asset allocation perspective but also in identifying key investment thematics or trends through macro-economic analysis".

Lonsec's review also highlighted that Kardinia's aim to deliver double digit annual rates of return through an investment cycle is strongly supported by a robust risk management framework. Applied at both the portfolio and individual stock level, Lonsec considers this to be a prudent and appropriate approach.

Mark Burgess was very pleased with the initial Lonsec rating, in particular their acknowledgement of Kardinia's robust research and portfolio construction process. "By partnering with Bennelong, as investment managers we can focus on the stock picking and day-to-day running of the Fund, which is a powerful model. We're co-invested with other investors in the Fund, so our interests are completely aligned. It ensures our focus is on maximising returns for our investors," Mark said.