New Caledonia?

It's a big day in Australian funds management when Caledonia, the seesawing wealth vehicle of Sydney's harbourside set, introduces a new core long position to its highly concentrated portfolio.[[The last was Caledonia's September 2020 investment in Scientific Games (now Light & Wonder).]]

And so in May, it was a big day twice in the same month. Post-Liberation Day turmoil clearly presented some terrific buying opportunities.

On May 8, Caledonia's co-chief investment officers Mike Messara and Will Vicars wrote to fund investors touting a new "core" holding in biotech financier Royalty Pharma. Then on May 28, they unveiled a second new core long: the world's largest non-state uranium miner, Cameco Corp of Canada, already accounting for 11 per cent of Caledonia's flagship fund.

While your prototypical active global equities fund might hold 25 or more positions relatively evenly across a portfolio, Caledonia goes untethered into its best investment ideas, behaving like private equity in the public market. Back in 2018 – halcyon days for Caledonia clients! – almost 85 per cent of its portfolio was invested in three stocks: US property marketplace Zillow, US food delivery company Grubhub and online poker company Stars Group.[[That year, Caledonia changed its structure so that no stock could be more than 15 per cent at cost (or 25 per cent after share price appreciation) of the main fund; excess holdings in those stocks would be shifted to a new "co-invest" fund, allowing clients to maintain outsized exposure to core longs – though the notion that Zillow or Grubhub were ever 'set and forget' investments was arguably misconceived.]]