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L1 L1 CAPITAL L1 Long Short Fund Limited Quarterly Report | SEPTEMBER 2021 • The L1 Long Short Fund portfolio returned 12.1 % ( net ) ¹ for the September quarter ( ASX200AI 1.7 % ) . Over the past year , the portfolio has returned 78.1 % ( net ) ¹ ( ASX200AI 30.6 % ) and the LSF share price has increased 93.0 % . Performance was strong due to numerous positive company updates , along with portfolio positioning designed to benefit from the reopening trade and higher inflation . Global markets were mixed over the quarter with positive performance in July and August largely offset by a pull- back in September driven by ongoing fears around high inflation , risks around the potential default of Evergrande ( one of China's largest property developers ) and a more hawkish turn from the U.S. Federal Reserve ( the ' Fed ' ) . The ASX200 had a small gain ( + 1.7 % over the quarter ) , while most global stock markets were relatively flat ( NASDAQ + 1.1 % , S & P500 + 0.6 % , MSCI World -0.0 % ) . Portfolio performance was particularly pleasing over the quarter given the volatility in global markets , with numerous positive company updates contributing to broad - based stock gains ( 23 stocks contributed 0.5 % or more to returns ) . 3 Months 6 Months 1 Year Returns ( % ) ( Net ) ¹ L1 Long Short Portfolio S & P ASX 200 AI Out- performance 12.1 1.7 +10.4 22.0 10.1 +11.9 78.1 30.6 +47.6 34.9 8.3 +26.6 23.8 9.7 +14.1 14.3 10.6 +3.6 23.8 8.2 +15.6 2 Years p.a. 3 Years p.a. LSF Since Inception p.a. Strategy Since Inception² p.a. Whilst the sharp rebound in markets has meant that we currently see less upside in equities relative to 12 months ago , we believe markets should remain supported in the near term driven by continued fiscal and monetary stimulus , rising M & A activity and further economic reopening . Key Stock Contributors for the Quarter Qantas ( Long + 22 % ) rallied as investor sentiment significantly improved for the ' reopening trade ' . Vaccination rates across Australia accelerated in the September quarter , while case numbers in NSW peaked , providing improved confidence that Australia was on track to reopen for both domestic and international travel . Qantas brought forward the re - start of its key Sydney - Melbourne route to early November and also its recommencement of international travel from mid - November . While it will take some time for Qantas ' flight activity to return to 2019 levels ( given lingering quarantining restrictions and some states remaining closed to interstate travel ) , we believe the outlook for Qantas on a medium - term view is extremely positive . We believe Qantas will re - emerge from the pandemic even stronger than before , given its $ 1b cost out program , improved market position and the massive pent - up demand for leisure travel . Refer to page 10 where we have included an overview of our Qantas investment thesis . Imdex ( Long + 14 % ) shares rose strongly after reporting FY21 earnings well above market estimates and providing a robust outlook on exploration spending . Imdex is the global leader in exploration drilling technology for the mining sector , with 80 % of the business exposed to gold , copper and iron ore . The company has spent significantly on R & D over the past five years ( fully expensed through its P & L ) and is now in the early stages of launching the industry's best suite of new and improved products . We expect earnings growth of more than 20 % p.a. for many years to come , which is not reflected in the current multiple of ~ 10.8x consensus FY22 EV / EBITDA . Finally , we believe Imdex's secure , cloud - based portal for providing access to validated field data ( IMDEXHUB - IQ ) , will become a major contributor to client retention , will increase product penetration per site and is being quickly adopted across the client base . 1 All performance numbers are quoted net of fees . Net returns are calculated based on the movement of the underlying investment portfolio . Figures may not sum exactly due to rounding . Past performance should not be taken as an indicator of future performance . 2 Strategy performance and exposure history is for the L1 Long Short Limited ( LSF : ASX ) since inception on 24 Apr 2018. Prior to this date , data is that of the L1 Capital Long Short Fund - Monthly Class since inception ( 1 Sep 2014 ) . Quarterly Report | SEPTEMBER 2021 | L1 Long Short Fund Limited 1