Melbourne-based boutique hedge fund VP Capital, run by John So and Tom Lambeth, is known for its aggressive thematic investments, resulting in both significant wins and notable losses. The fund, which manages around $50 million, focuses on high-conviction bets in sectors such as Chinese AI start-ups, Australian uranium, and US technology. VP Capital’s strategy, while volatile, has seen it outperform the S&P/ASX All Ordinaries Index by 4.1 percentage points annually since its February 2018 inception, achieving substantial gains in years like 2020 (21.4 percentage points) and 2021 (33.5 percentage points).
Despite its long-term success, VP Capital has faced recent setbacks, currently lagging the index by 9.1 percentage points this year. The fund incurred significant losses from two local medtech companies: Saluda Medical, which saw its shares plummet after debut, and Immutep, whose value crashed following abandoned clinical trials. Consequently, Mr. So confirmed an exit from the healthcare sector by June. However, these losses were partially offset by successful short positions on ASX-listed firms like furniture retailer Temple & Webster and job advertisement platform Seek.com, capitalising on economic downturns and AI disruption fears.
In response to market shifts, VP Capital has strategically rebalanced its portfolio, increasing exposure to the resources sector with holdings in Lynas Rare Earths, alongside uranium and copper assets. Concurrently, the fund has found considerable success in Chinese technology stocks, notably with its largest position in CATL, the world’s leading battery maker, yielding a roughly 40 per cent paper gain. Investments in Hong Kong-listed AI firms like Zhipu and Minimax also proved fruitful amidst a buoyant Hong Kong IPO market. VP Capital is now closely monitoring the anticipated Hong Kong IPO of Xiaohongshu, also known as RedNote, a popular Chinese social media app, anticipating its potential for strong performance given current AI-related market momentum.
