The largest detractor from the Fund’s performance for the past quarter was LSL Property Services (LSE:LSL). Despite a year-long rebound in the U.K. housing market, the share price of LSL declined during the quarter due to concerns about slowing transactional growth as a result of the rapid appreciation in U.K. home prices, coupled with the possibility that the Bank of England will increase interest rates. Although this may be true after the growth of the past year, over the medium- to long-term the U.K. housing transactional volumes remain well below normal, and LSL should continue to benefit from increased transaction volumes. Currently LSL is trading at less than 10x current years earning, and in our opinion it remains one of the Fund’s most compelling investment opportunities.
From Oakmark Intl Small Cap (Trades, Portfolio)'s Second Quarter 2014 Letter.
