Janus Henderson Absolute Return Fund on Anglo American plc
Thesis
Anglo American became a new core holding and benefited during August from a weaker US dollar and stronger commodity prices. The fund's investment case is centred on value creation from the proposed combination with Canadian miner Teck, where the managers see a compelling strategic fit and synergy opportunity. The long therefore depends less on the month's commodity move and more on successful value creation from the transaction. ([London Stock Exchange][15])
“our investment case remains centred on the value creation potential of its proposed combination with Canadian miner Teck.”
Key risks
- Mining mergers have historically produced mixed outcomes
- The proposed combination with Teck may fail to realise expected strategic synergies