By Joanne Tran
New York-based Global Fund deputy portfolio manager William Liu tips a fund platform as a hidden bargain and thinks Google parent Alphabet will be the AI winner..
William Liu is deputy portfolio manager of Wilson Asset Management’s Global Fund in New York. The Australian firm oversees $6 billion in assets.
What were your key takeaways from the US earnings season?
It has been quite an upbeat earnings season, and the resilience of US businesses in the face of economic uncertainty has been impressive. However, the combination of management teams having previously set conservative guidance amidst tariff uncertainty and the run-up in equity prices has led to an environment where beats are expected and misses are severely punished.
William Liu says wealth technology company Allfunds Group is “too cheap” for the market to ignore. Louise Kennerley
Generative artificial intelligence continues to be a dominant theme. Investment into the data application and infrastructure layers in technology continues to be a priority.
In cyclical industries, the recovery has been pushed out in areas such as housing, transportation and capital goods. Uncertainty on tariffs and high interest rates have led to a “wait and see” mode for many companies unwilling to make major decisions until the environment stabilises.
The consumer also appears to be reasonably stable in the US, and we have not observed major changes to spending behaviour.
Google parent Alphabet is a ‘magnificent seven’ stock in your portfolio. Why?
We increased our position in Google when there were overblown fears in the market that the company would face existential risk in the face of generative AI. Our view is that Alphabet is an AI winner.
The company has a unique full-stack approach to AI that includes infrastructure, world-class research, and models and tooling that enables AI to its customers all over the world.
This is a sustainable competitive advantage that has been validated with significant demand for its comprehensive AI product portfolio and the fact that almost all generative AI unicorn companies are using Google Cloud.
We believe Alphabet has many pathways to winning. Its Gemini model is very strong, its silicon advantage with tensor processing units and access to proprietary data remain underappreciated.
Which stock in the fund is being most undervalued by the market?
Allfunds Group is a leading wealth technology platform in Europe with approximately €1.5 trillion ($2.7 trillion) in assets under advice.
It essentially connects asset managers with wealth managers and provides a third-party open architecture platform enabling better access, analytics and a more efficient operating model for all parties.
This secular shift to open architecture models is still early and has been driven by rising regulatory complexity and growing demand from end investors for greater choice. In the near term, Allfunds is a beneficiary of improved risk appetite and inflows of capital into Europe.
For a company with sustainable structural growth, high operating margins and net cash balance sheet, we see its current valuation as too cheap.
In fact, a hostile takeover attempt in February 2023 was made for Allfunds at €8.75 per share, which represents a premium of over 40 per cent to today’s share price. This is despite the business being in a much stronger position today!
Which stock in your fund has the most near-term upside?
We own Genius Sports in the portfolio, which has incredibly exciting future prospects. It is a business-to-business technology company that owns the exclusive data rights to major sports leagues such as the National Football League in the US and connects them to global sportsbook providers.
The company recently expanded its partnership with the NFL to gain exclusive rights to in-game advertising inventory.
This unique inventory can be accessed through FanHub, which is Genius’ marketing and advertising platform designed specifically for the sport.
At its latest earnings result, the company highlighted that this inventory had been sold out ahead of the upcoming NFL season – a clear signal of demand for this type of offering.
We believe the media business has substantial long-term growth potential and is starting to gain significant traction.
Are there any podcasts that you’d recommend?
No Priors is a podcast I am currently listening to. It provides some great insight into the world’s leading AI engineers, researchers and founders on the current technology landscape.
What is your favourite local bar/restaurant?
In New York, 12 Matcha is a local favourite. I highly recommend the Matcha Basque Cheesecake. Closer to home, Goodfields Eatery in Lindfield does great coffee and breakfast.
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