In the wake of the significant COVID-induced stimulation that has occurred in the past couple of years, public markets are seeing “the early parts of a hangover”, according to Altor Capital.

Altor Capital’s co-founder and chief investment officer Benjamin Harrison said the market is pricing in the uncertainty around where inflation and interest rates will head, but added it was a headache not shared by all.

“The markets will go where the markets will go,” he said. “We’re not in the business of predicting the markets; we’re in the business of investing in good businesses that can weather the storm.”

Altor Capital’s investment decisions are based on factors such as whether a business is able to pass on cost increases so it is more protected against inflation, or if a company’s business model allows it to attract and retain quality staff so the company can actually capitalise on the growth.

“We’re seeing the current market shakeout, particularly in the listed space, as more of a buying opportunity where we’ve got cash to deploy in those opportunities that oversold because of the market’s short-termism.”

“A key aspect to our mandate is finding that pricing mismatch in the market – and adopting a longer-term view.”

The investment team of six behind Altor Capital – which operates its alternative asset management business in growth-orientated emerging companies – takes a macro-driven and platform-based approach to the way it invests.

“We’ve only invested in businesses that have very strong structural tailwinds behind them,” Mr Harrison said.

“Every business goes through hard times or experiences operational challenges, but strong tailwinds can effectively drive their way through those periods, whether it’s months or years.

“We’re also very macro-driven in terms of the thematics we’re picking – infrastructure services, health care, financial services, advanced manufacturing, and technology as examples.”

The CIO – who has experience across corporate strategy, capital markets, M&A and investment management – said Altor Capital also considers environmental impacts, investing in ESG companies covering renewables and waste management.

“And we do all this via a flexible platform that spans a number of assets, whether it’s equity, hybrids or credit, listed or unlisted.

“That’s really how we think about the world differently to, say, your fund manager that’s just doing purely Aussie equities or purely private credit. We find the best ideas and then have a diversified funds management platform that can invest across the cap structure in the best ideas.”

Personally driven by helping businesses achieve their objectives, Mr Harrison said now was an interesting time to be looking at the market.

“Because we’re taking a long-term view on businesses and their ability to make money through this cycle, we’re able to find stories that tick our mandates and investment process, buy them and effectively take advantage of market mispricing.”

Join Benjamin Harrison this Friday, 20th May, at 12pm (AEST) on our weekly The Insider: Meet the Fund Manager webcast to hear him talk about his favourite stocks, investment strategy, market insights and more. There will also be an opportunity to ask questions during the session. To book yourself in, click here.

Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position

Sources:

All information, including the quotes, are taken from a private interview and have been approved by Benjamin.