Willy Packer’s $2 billion investment fund sells down in the US, reweights to ‘cheaper and safer’ Asia

WA fund manager Willy Packer has reweighted his $2.1 billion Investigator Trust closer to Asia after selling down in the US because of persistent concerns about overvalued stocks and a “precarious economic outlook.” Packer & Co’s half-year update also reveals the State’s biggest homegrown investment fund has halved its holdings of US bonds to reduce risk and substantially sold down its oil and gas interests. The contrarian fund manager has long been an investor in the US, its early success at least partly linked to winning bets on big-name US consumer brands and tech stocks. However, Packer & Co’s concerns about overvalued US stock markets and the country’s soaring budget deficit are now being exacerbated by fears US President Donald Trump’s tariffs will spark a “painful” trade reversal that would slash corporate earnings. “With such a disconnect between expensive US stocks and the precarious economic outlook, we have reduced our exposure to the US stock market and have repatriated the bulk of our US bond holdings to Australia,” it said. “Our equity holdings today are primarily in Asia, a region that is on the rise and attractively valued.” Having jumped into Asia by buying Chinese telcos in 2021, Investigator is now buying elsewhere in the region. Its recent investments include conglomerates Jardine Matheson and CK Hutchison, and SK Telecom and noodles giant Indofoods. At the same time, the long-time backer of fossil fuels has cut its exposure to oil and gas to 17 per cent at the end of December from 27 per cent a year ago by selling out of US producer Hess and reducing its holding in Chinese group CNOOC to 6 per cent of the portfolio from 9.4 per cent. Some of the proceeds were redeployed into Brazilian oil and gas company Petrobas, and the fund is still also sitting on holdings in a collection of Russian energy stocks, outside trading in which has been frozen since the 2022 invasion of Ukraine. The stocks are independently valued in the books at a 50 discount to their trading prices. Packer & Co has been worried about lofty share valuations since 2020 when it sold down its equity holdings ahead of COVID-19. As of December, most of the Investigator portfolio — 52.4 per cent — remained in safer US and Australian government bonds, gold and cash. But that means that Packer & Co has missed out on fully capitalising on the post-pandemic rebound in equities, with lower recent returns diminishing its longer-term success. It returned 8.8 per cent for the past 12 months, down from the S&P-ASX200’s 9.9 per cent gain and the Australian dollar-denominated MSCI World Accumulation Index’s 19 per cent return. Over 25 years, it leads both indices with an 11.4 per cent return. Packer & Co said its 2025 financial year performance was aided by strong gains by its Chinese investments and record gold prices — 10 per cent of the portfolio is invested in bullion — offset by a hefty loss on its Energy Resources of Australia play after the Federal Government last year revoked the company’s uranium mining licence at Jabiluka in the Northern Territory. “During these precarious times, preservation of capital is our priority,” it said in the update.