Melbourne-based L1 Capital’s flagship Long Short Fund, which has delivered a 20% annual return since its inception, is banking on a swift recovery for uranium producer NexGen Energy, according to a report by Bloomberg.
Despite a challenging year for NexGen’s stock following a 53% surge in 2023, L1’s head of research Amar Naik told Bloomberg: “It’s such a strategic asset that once they get their final approvals, it’s a very high likelihood that it would be a good takeover candidate for one of the majors.”
L1 became NexGen’s largest shareholder after initial investment in 2021. While the fund has maintained its uranium positions despite market volatility, it has reduced its copper-related holdings, according to Naik. NexGen’s shares in Canada have increased by 0.7% this year.
The uranium sector has already seen significant M&A activity, highlighted by Paladin Energy’s recent CAD1.14bn ($833m) offer to acquire Canadian mining firm Fission Uranium.
L1 Capital, founded by Raphael Lamm and Mark Landau in 2007, initially focused on long-only stocks before launching the Long Short Fund in 2014, which has now grown to approximately AUD4.6bn. The firm manages around AUD7.5bn.
