L1 Long Short Fund reported a 7.2% net return for FY2024-25 and announced a shift to quarterly dividends, reflecting confidence despite a challenging market environment.
- 7.2% net return for 2024-25, trailing ASX200AI's 13.8%
- Five-year annualised return of 21.0%, outperforming ASX200AI by 9%
- Total dividends increased 8.5% to 12.75 cents fully franked
- New quarterly dividend payments starting December 2025
- L1 Capital merged with Platinum Asset Management to form L1 Group
Navigating a Complex Market Landscape
In the 2024-25 financial year, L1 Long Short Fund Limited (ASX – LSF) faced a turbulent investment backdrop marked by fluctuating interest rates, inflation concerns, and heightened geopolitical tensions. Despite these headwinds, the fund managed to deliver a positive net return of 7.2%, a respectable outcome though notably below the 13.8% gain of the ASX200AI benchmark.
The fund's investment manager, L1 Capital, highlighted the challenges posed by speculative interest rate movements and the volatile enthusiasm surrounding artificial intelligence stocks. Additionally, passive equity flows favored large-cap stocks globally, creating divergent market trends that tested active management strategies.
Strong Long-Term Performance and Dividend Growth
While the latest annual return lagged the benchmark, LSF’s longer-term performance paints a more compelling picture. Over five years, the fund has achieved an impressive 21.0% annualised net return, outperforming the ASX200AI by more than 9% per annum. Since its 2018 IPO, LSF has delivered an 11.0% annualised return, beating the benchmark by 1.6% per annum.
Reflecting confidence in the fund’s prospects, LSF increased its fully franked dividends by 8.5% to 12.75 cents per share for the year. Notably, the company announced a strategic shift to quarterly dividend payments starting December 2025, with a recently declared 3.5 cents per share dividend payable in early December. This move signals a commitment to providing shareholders with more regular income streams.
Management Confidence and Corporate Developments
Senior management and board members have reinforced their faith in LSF by increasing their personal shareholdings through on-market purchases. This alignment of interests is a positive sign for investors seeking assurance in the fund’s governance and long-term strategy.
On the corporate front, L1 Capital’s recent merger with Platinum Asset Management to form the L1 Group represents a significant industry development. Importantly, the merger is not expected to alter LSF’s investment approach or management team, suggesting continuity amid broader structural change.
Chairman Andrew Larke expressed gratitude to shareholders for their ongoing support, underscoring the company’s focus on delivering consistent returns and growing dividends despite a challenging macroeconomic environment.
Bottom Line?
LSF’s steady long-term outperformance and new dividend cadence set the stage for closer investor attention in 2026.
Questions in the middle?
- How will the L1 Group merger influence LSF’s strategic opportunities over the next year?
- Can LSF sustain its dividend growth amid ongoing market volatility?
- What factors contributed to the recent four-month outperformance versus the ASX200AI?