Shorting US old-media companies, real estate companies and financials has stood UK-based long/short manager Artefact Partners in good stead over the past few months.

The manager, whose main portfolio was seeded by Australia’s Macquarie Bank, has returned 12.5 per cent since inception in May 2006 to the end of February this year in its ‘global opportunities’ fund, against an MSCI Total Return World Index figure of 9.5 per cent and a CS Tremont Investible Long/Short Equity Index return of 3.1 per cent in the same period. Visiting Australia last week, Richard Boon, Artefact founder and senior portfolio manager, said the major short positions of US newspaper groups, real estate and financials had contributed to an overall short position to the US of 36 per cent at the end of February. The manager continues to like its largest long position, of Nokia, although it has shorted European ‘infotech’ in general. Other longs include cigarette consumer staple Altria (Phillip Morris) and healthcare through Merck. Boon said that US newspapers looked “cheap enough” on the surface but not on a debt-adjusted basis. “They are mostly highly indebted and with further opportunities for further cost-cutting,” he said. Boon was a managing director of Merrill Lynch Investment Management and before that the global equity portfolio manager for Morgan Stanley Asset Management prior to starting Artefact in early 2006.