L1 Long Short Fund Announces Net Tangible Asset Value of $4.12 Per Share as of 16 July 2026

Insights into L1 Long Short Fund’s Investment Approach and Structure

L1 Long Short Fund Limited operates from Level 45, 101 Collins Street, Melbourne, Victoria, and follows a long-short investment strategy. This approach involves holding both long positions, anticipating price rises, and short positions, expecting price declines, across its portfolio. The dual strategy aims to generate returns in varying market environments by capitalising on both upward and downward asset price movements. As a closed-end fund listed on the Australian Securities Exchange (ASX), LSF regularly provides NTA updates to ensure investors have transparent access to the underlying value of their investments.

Unlike open-ended funds where shares are issued or redeemed at NTA, LSF’s shares trade on the ASX at market-determined prices influenced by supply and demand. This structure can lead to shares trading at a premium or discount to the fund’s net asset value. Therefore, investors must monitor both the NTA backing and market share price to evaluate the investment’s fair value. The periodic release of NTA figures, such as the 16 July 2026 update, facilitates accurate price discovery and enhances market efficiency for LSF shares.

Net Tangible Asset Backing Per Share as of 16 July 2026

The fund reported an unaudited NTA before tax backing of $4.1241 per ordinary share as at 16 July 2026. This figure represents the net asset value prior to accounting for deferred tax on unrealised portfolio gains and losses. The before-tax NTA offers investors insight into the portfolio’s raw market value and investment performance without tax adjustments, serving as a useful benchmark when comparing the fund’s share price to its intrinsic value.

Additionally, the unaudited after-tax NTA was $3.8271 per ordinary share on the same date. This measure accounts for all applicable taxes, including deferred tax liabilities on unrealised gains and losses within the portfolio. The difference of approximately $0.297 per share between before-tax and after-tax NTA reflects the deferred tax provision maintained by the fund. The after-tax NTA provides a conservative estimate of net asset value and is commonly used by investors to assess whether shares are trading at a premium or discount.

Understanding the Difference Between Before-Tax and After-Tax NTA

The distinction between before-tax and after-tax NTA is vital for investors evaluating L1 Long Short Fund’s true net asset value. The before-tax NTA of $4.1241 per share reflects the gross asset value without considering deferred tax liabilities on unrealised gains and losses. This snapshot highlights the portfolio’s market value independent of tax effects, offering transparency on investment performance.

Conversely, the after-tax NTA of $3.8271 per share factors in estimated deferred tax liabilities that would arise if all unrealised gains and losses were realised. The $0.297 per share difference indicates the scale of these deferred tax obligations embedded in the portfolio. This after-tax figure is generally regarded as the more relevant metric for investors comparing market share price to net asset value, representing the amount shareholders might receive upon full liquidation after tax payments. Regular provisioning for deferred taxes ensures the fund’s balance sheet accurately reflects its financial position.

Importance of Regular NTA Reporting for Investors

L1 Long Short Fund’s unaudited NTA release as of 16 July 2026 exemplifies its ongoing commitment to shareholder transparency regarding underlying asset values. Closed-end funds typically provide monthly or periodic NTA updates, enabling investors to monitor changes in net asset backing over time. These updates serve as a vital communication tool between fund management and shareholders, offering insights into portfolio performance and share value fluctuations. Consistent disclosure fosters investor confidence and supports efficient secondary market pricing.

Since these NTA figures are unaudited, they are calculated internally by fund management based on portfolio valuations and have not yet undergone external audit verification. The company’s clear statement that all figures are "unaudited and approximate" ensures transparency about their provisional nature. This practice is standard for interim NTA disclosures, with fully audited figures provided in annual financial reports. Investors should consider the unaudited status when making decisions and may cross-check with audited statements for valuation changes.

Using NTA Figures to Evaluate Fund Valuation

For shareholders in L1 Long Short Fund, NTA figures are essential benchmarks to determine whether shares are attractively priced. Shares trading below NTA (at a discount) imply purchasing assets below intrinsic value, potentially representing buying opportunities. Conversely, shares trading above NTA (at a premium) may indicate market optimism about the fund’s prospects or management quality. Monitoring both NTA and market price enables investors to make informed valuation assessments. This comparison is a fundamental tool for closed-end fund investors.

Tracking NTA trends over time also reveals the fund’s investment strategy performance. Rising NTA per share suggests portfolio appreciation and shareholder returns, while declining NTA may indicate portfolio depreciation or challenging market conditions for the long-short strategy. The 16 July 2026 NTA figures contribute to a longer-term performance record that investors should consider.

Deferred Tax’s Role in Long-Short Fund Management

Deferred tax liabilities arise naturally from L1 Long Short Fund’s long-short investment approach and portfolio management. Holding both long and short positions generates unrealised gains and losses across securities. Tax accounting requires recognising deferred tax liabilities on unrealised gains, which would be taxable upon realisation, and deferred tax assets on unrealised losses, which could offset taxable income. Fund management estimates these deferred tax positions based on portfolio composition and tax rates, incorporating provisions into NTA calculations to reflect future tax obligations.

The $0.297 per share difference between before-tax and after-tax NTA highlights these deferred tax considerations. This gap is significant for investors as it represents a real liability borne by shareholders. Realising substantial gains may result in tax distributions or NTA reductions as deferred taxes become payable. Conversely, realising losses can reduce tax liabilities. Deferred tax positions materially impact shareholder returns, especially in funds with high turnover or significant realised gains. Investors should factor deferred tax effects into assessments of after-tax returns and long-term value.

Distinctive Long-Short Strategy in Portfolio Management

L1 Long Short Fund’s simultaneous long and short positions represent a unique investment strategy within asset management. Long-short strategies aim to capture market opportunities regardless of direction by profiting from both rising (long) and falling (short) markets. This approach can reduce sensitivity to broad market swings and potentially deliver more consistent returns across market cycles. For investors seeking alternatives to traditional long-only equity funds, long-short funds like LSF offer a differentiated risk-return profile.

Executing a long-short strategy demands active management and disciplined risk controls. Fund managers must identify overvalued securities to short and undervalued ones to long, continuously adjusting positions as markets evolve. The strategy’s success heavily depends on stock selection and timing. LSF’s reported NTA figures reflect the cumulative outcomes of these decisions, with before-tax NTA indicating portfolio performance. Prospective investors should evaluate the manager’s historical ability to generate consistent returns through this approach alongside current NTA valuations.

Considerations for Investors in Closed-End Funds

Investors in L1 Long Short Fund should understand factors specific to closed-end funds. Unlike open-ended funds where shares are issued or redeemed at NTA, LSF shares trade on the secondary market at prices driven by supply and demand. This can create opportunities to buy at a discount or sell at a premium but also introduces price volatility independent of fund performance. Share prices may fluctuate due to investor sentiment, liquidity, and market conditions, separate from NTA changes. Monitoring both NTA and market price is essential for a comprehensive investment view.

Additionally, the long-short strategy’s performance varies with market conditions. During strong rallies, short positions may reduce returns compared to fully long portfolios. In downturns, short positions may provide downside protection, enabling positive returns when long-only funds decline. Investors should assess their market outlook and risk tolerance to determine if a long-short fund suits their objectives. LSF’s regular NTA disclosures offer transparent insights into strategy performance over time.