Global long-short manager System Capital marks three-year milestone, with the strategy returning 20% p,a (before fees)1
28 November 2025: Investing in structural disruption can help deliver portfolio diversification, overcome market unpredictability, and boost returns, according to global long-short manager System Capital.
Marking System Capital’s third anniversary, Founder and Portfolio Manager Lev Margolin, said understanding how structural shifts will reshape companies and sectors is key to outperformance, irrespective of whether markets continue to drive higher.
It is an approach that has delivered, with the System Capital strategy returning 20% p.a. (before fees) since inception*. The System Capital Long Short Fund (the Fund) also recently received a ‘Recommended’ rating by Zenith Investment Partners.
Bottom-up, fundamental analysis is crucial to identifying structural tailwinds, changing industry dynamics, and broadening the investment circle of confidence.
“To identify businesses that will be structurally stronger in five years, you must analyse their fundamentals and trajectory. This includes suppliers, customers, regulators, and social license. It’s a disciplined, repeatable process that helps keep us focused.”
This process reveals both structural winners and losers. By combining long and short positions within the same industries, investors can maximise exposure to companies driving disruption, while profiting from those falling behind.
“Our process reveals long-term winners and those at risk of disruption and changing industry dynamics. Incorporating short positions – about 20% of our portfolio – adds both protection and opportunity for investors.”
Separating opportunity from hype
Technology, information services, media, infrastructure and industrials are all set to see strong structural changes over the coming five years.
Focusing on these sectors allows the Fund to target attractive returns, good diversification, and a durable advantage outside of the AI super cycle. It also alleviates any portfolio biases towards the US and Australian markets, with Europe offering significant structural opportunity.”
Valuation concerns drive appetite for alternatives
Fidante’s research revealed valuations were the primary concern for advisers. Almost 40 percent of advisers noted valuation concerns in Australian equities, while valuations overtook Trump as the primary concern in global markets (30%).
This search for alpha has driven demand for alternatives, with 77 percent of advisers allocating up to 10 percent of client assets to alternatives. Yet, liquidity concerns deterred almost 40 percent of advisers from investing in the opportunity.
“It’s a common misconception that alternatives mean sacrificing liquidity in portfolios. Absolute return strategies, like our long-short approach, provide daily liquidity allowing investors maximum flexibility.
“A focus on structural disruption can also reveal quality companies at the right price. With a long bias, we can take advantage of structural decline while using market dislocations to reinvest at attractive valuations at a time that suits us.”
“Amidst stretched valuations, persistent economic uncertainty, and deafening market noise, it’s a strategy that has allowed us to deliver consistent performance and position for the long-term.” Mr Margolin said.
Important Information
1 As at September 2025
2 As at June 2025
The results of the survey are based on responses provided by 201 financial advisers or authorised representatives of a licenced financial adviser, who completed an online survey between 23 September and 6 October 2025. These views are their own and do not represent the views of Fidante or any company within the Challenger Group
Media release issued by System Capital Pty Ltd (ABN 14 657 739 323) (System). System Capital is an Authorised Representative (No. 001309928) of Fidante Partners Limited ABN 94 002 835 592 AFSL 234668 (Fidante) and is authorised to provide financial services to wholesale clients only (within the meaning of the Corporations Act 2001 (Cth)). System is the investment manager of System Capital Long Short Fund (ARSN 683 513 948) (the Fund). The information in this Media release should be regarded as general information only and is not intended to be financial product advice. It has been prepared without taking account of any person’s objectives, financial situation or needs. You should read the Target Market Determination and Product Disclosure Statement for the Fund available at www.fidante.com before making any decision in relation to the Fund(s).
Past performance is not a reliable indicator of future performance. Source: Fidante Partners Limited ABN 94 002 835 592 AFSL 234668 (Fidante). Fidante is a member of the Challenger Limited group of companies (Challenger Group) and is the Responsible Entity and issuer of interests in the Fund(s). Other than information which is identified as sourced from Fidante in relation to the Fund, Fidante is not responsible for the information in this publication, including any statements of opinion.
Investments in the Fund are subject to investment risk, including possible delays in repayment and loss of income or principal invested. Accordingly, the performance, the repayment of capital or any particular rate of return on your investments are not guaranteed by any member of the Challenger Group.
The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (HOW9939AU assigned November 2025) referred to in this piece is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual, including target markets of financial products, where applicable, and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product. Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on its Product Assessments and at https://www.zenithpartners.com.au/our-solutions/investment-research/regulatory-guidelines/