L1 Long Short Fund (LSF) Status Update summary

Investment Philosophy, Strategy, and Alignment

• L1 Long Short Fund is structured for long-term alignment, with over 90% of co-founders' investible wealth and staff bonuses invested in the fund, and a cap on funds under management to prioritize returns.

• The fund leverages deep valuation research, a contrarian approach, dynamic market exposure, shorting, and global investing to achieve absolute returns.

• The Long Short Fund, launched in 2014, has been the top-performing Australian long short fund over the past decade.

Performance Highlights

• Since inception in September 2014, the fund has delivered 19.1% annualized net returns, outperforming the ASX 200 Accumulation Index by 10.8% per annum.

• Strong absolute returns across all periods, including 14.0% for 1 year and 18.4% for 5 years per annum.

• Outperformance achieved despite significant value headwinds, as low P/E stocks underperformed high P/E stocks by 116% over the decade.

Macroeconomic and Market Outlook

• U.S. and U.K. economies remain resilient, with the U.S. GDP growth at 3% in Q2 and 2.5% expected for the year, and the U.K. showing signs of recovery.

• Europe faces stagnation and tax hikes, while China is implementing major stimulus to address weak growth.

• Australia benefits from high migration and commodity prices, supporting modest growth amid high interest rates and stable unemployment.