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Our Investments
BLK Capital Management is structured as a long/short equities fund, benchmarked to the MSCI World Mid Cap Index. The fund aims to replicate similar sector exposure to the index. As at 30 June 2024, index constituents mainly represent Industrials, FInancials, Information Technology, and Consumer Discretionary. As reflected in our house view, we highlight some of these areas as attractive in light of the current macroeconomic backdrop.
BLK Fund Structure
The organisation of sector teams will follow a generalist approach where portfolio managers will be assigned flexible specialist sectors which fit trends outlined in the investment memorandum and pitch a company which they believe best executes on our industry-level view. This model allows BLK to drive a sector focused portfolio and encourages PM’s to be creative to produce the best pitches possible. Portfolio managers are expected to pitch quality companies that can withstand global economic uncertainty.
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1. REIT Revival
As the interest rate environment changes, REITs and the real estate space will likely benefit the most. Although it's been hard to predict when rate cuts will happen, as soon as they do the companies in the real estate space should see more growth potentially to pre-pandemic levels. We see a long term “REIT Revival”.
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2. High-Quality Small Caps
We believe that due to impending rate cuts globally in high interest rate markets, companies which had little to no access to debt for the past 2 years will now have an opportunity to use debt and pursue accretive projects.
3. AI Implementation
Creating operating leverage through AI/ML & data tools. AI can increase efficiency and has the potential to reduce the cost to produce in certain situations. AI is still hard to predict and there are many unknowns, therefore there is room for views that might be different then the Street.
4. Valuable Consumer Cyclicals
The valuable consumer cyclical theme is a play at predicting whether the economy is going to be strong going forward or not. If we do see a soft landing these companies will benefit. For this theme it's more targeting which of these companies have strong competitive advantages and will be able to outperform street expectations when the economy doesn't have anymore recessionary fears.
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