Asset Allocation
Luke Cummings

Reading through Patrick Poke’s article yesterday analysing Seth Klarman’s annual letter for Baupost Group ("Klarman: A Buying Opportunity"), a particular passage stood out. Unsurprisingly, not least because of our history in championing the strategy, the passage focused on reducing correlation to broader equity markets. Show More

Luke Cummings

Even those new to investing would be familiar with Warren Buffett. His investment philosophy has inspired generations of investors and the mere mention of his name is synonymous with value investing. The purpose of this article isn’t to shine yet another light along the overly promoted path of value investing,... Show More

Luke Cummings

Ata Resources returned to Universal Coal (UNV.ASX) last week, not only stepping up its offer to binding (something we always love to see) but also provided colour around its ability to finance its proposal. The message was clear; the intent to acquire the business is real and Ata is willing... Show More

Luke Cummings

With a headline value of just under $2.2b, investors awoke to news on Monday morning that accounting software provider MYOB Group Limited (MYO.ASX) had yet again attracted the interests of a private equity group; KKR & Co had submitted an initial non-binding proposal at $3.70 per share having lightened Bain... Show More

Luke Cummings

Yesterday morning, Universal Coal (UNV.ASX) announced receipt of an indicative, non-binding acquisition proposal at $0.35 per share from Ata Resources Pty Ltd. Given the conditional non-binding nature of the bid, it is not quite yet the asymmetric arbitrage opportunity that we would normally trade with conviction. Somewhat fortunately for us... Show More

Equities
Livewire Exclusive

Mergers and acquisitions activity has picked up in the last 12 months, as sentiment has finally allowed more deals. Luke Cummings, CIO at Harvest Lane Asset Management, explains that M&A tends to increase later in the cycle as confidence is essential for successful deals. But where will the next one... Show More

Equities
Livewire Exclusive

There are no free lunches in finance, but for Australian investors, franking credits can be the next best thing. Luke Cummings, Chief Investment Officer at Harvest Lane Asset Management, says that many M&A transactions are structured to include a fully franked dividend as part of the headline price. Australian investors... Show More

Education
Livewire Exclusive

An unconditional offer is the holy grail of mergers and acquisitions, but such deals are rare, says Luke Cummings, CIO at Harvest Lane Asset Management. In this short interview, Luke runs through his checklist for finding the perfect deal and outlines three live deals that he thinks could get sweetened.... Show More

Luke Cummings

Regular readers of Livewire may recall some of our previous comments on Fairfax Media early last year, then subject to multiple private equity bids from both a TPG consortium and Hellman & Friedman. Last week, the market awoke to news of a Nine Entertainment (NEC.ASX) and Fairfax Media (FXJ.ASX) merger... Show More

Thanks Ashford. As you correctly state, all three of the opportunities mentioned in the article have largely passed however, there are many others that remain available at the time of writing. Best Regards - Luke

On The Little Known Buffett Strategy -

Hi Carlos, Thank you for taking the time to offer your thoughts. The first point I think should be necessary to make is that we’re not passing judgement on who should or shouldn't own Healthscope (or any other companies for that matter). We manage a market neutral fund that specialises in trading 'events' (including M&A) and hence our analysis of the situation is based solely on the likelihood of the current offer succeeding and/or the likelihood of the offer terms being improved. For this reason, we are very much focused on the ‘short term’ and whilst we appreciate this approach is not for everyone, it has generally served our investors well. In the case of Healthscope specifically, we would note that the transfer of ownership does not necessarily mean that the underlying assets disappear, evidenced by the fact that Healthscope had been previously owned by private equity before returning to public markets in 2014. The inclusion of Australian Super in the bidding consortium (who would most likely have a very long-term investment horizon) indicates to us that BGH are very much taking a view to the long term with their offer. Of course, at this stage the BGH/Australian Super consortium are yet to even be granted due diligence access, let alone make a binding offer so, the situation has some way to play out yet. Luke

On Healthscope talk of the town again -