Fund Manager Summary on Lynas Rare Earths Ltd (ASX:LYC)
In December 2025, Paradice Investment Management commented that it sold Lynas Rare Earths Ltd (ASX:LYC) because rare earth pricing and near‑term earnings visibility remained uncertain and the portfolio was prioritising positions with clearer demand and margin support. Across fund managers the consensus recognises Lynas as a strategically important, non‑China rare earth producer with structural tailwinds from government support and rising NdPr market dynamics, but recent commentary increasingly flags actionable concerns: valuation and price volatility prompted Ten Cap to take profits in April 2025 despite believing in government backing, Yarra remained underweight through August and September 2025 even as NdPr prices were reported to rise materially (examples cited to US$75.39/kg and US$69/kg) and the company completed a A$750 million equity raise to fund processing expansion and resource development, and Paradice exited in December 2025 citing uncertain pricing and earnings visibility and the company’s recent removal from the ASX Mid Cap 50 Index; investors should therefore monitor NdPr price trajectory and margin clarity, progress and timing of capacity expansions and use of A$750m proceeds, potential dilution and valuation readjustment, and policy or government support signals as the key factors that will determine whether structural demand translates into durable cash‑flow improvements.
Commentary From The Managers
There are 5 insights from 4 fund managers regarding their investment in Lynas Rare Earths Ltd (ASX:LYC) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
16 Mar 2026
$20.99
Summary
- Pendal Group continues to hold Lynas Rare Earths Ltd because a new long-term offtake agreement with Japan significantly de-risks the earnings outlook.
- Lynas secured a long-term supply agreement for up to 7,200 tonnes per annum of neodymium-praseodymium through to 2038.
- The deal is structured to ensure no opportunity loss to Lynas, meaning the company is well-compensated under the agreement.
- The agreement reinforces Lynas strategic position as a critical rare earths supplier outside of China, underpinning long-term value.
Paradice Investment Management
31 Dec 2025
$12.44
Summary
- Paradice Investment Management believes Lynas Rare Earths Ltd. faced an uncertain outlook and sold their investment because rare earth pricing and near-term earnings visibility remained uncertain, and the portfolio prioritised positions with clearer demand and margin support.
- Pricing uncertainty: volatile and uncertain rare earth prices reduced confidence in near-term revenue and margins.
- Earnings visibility: lack of clear short-term earnings visibility hindered reliable forecasting of cash flow and profitability.
- Portfolio emphasis: preference for holdings with clearer demand fundamentals and stronger margin support guided the exit decision.
- Index implication: Lynas’s recent exit from the ASX Mid Cap 50 Index reduced index-related investor flows and influenced reassessment of the position.
Yarra Capital Management
30 Sept 2025
$16.81
Summary
- Lynas Rare Earths (LYC) has outperformed recently due to a 26% increase in NdPr prices to US$69/kg.
- The company raised A$750 million to fund expansion efforts, including increased processing capacity and resource development.
- LYC maintains a strong position as a major producer of rare earths outside of China.
- Yarra Capital Management continues to hold an underweight position in LYC as they struggle to identify value.
- The fund prefers exposure to rare earths through peer Iluka Resources (ILU.AX).
Yarra Capital Management
31 Aug 2025
$14.30
Summary
- Lynas Rare Earths (LYC) has outperformed due to a 15.3% rise in Neodymium (NdPr) prices, reaching US$75.39/kg.
- The company completed a $750 million equity raise aimed at funding expansion, including increased processing capacity and resource development.
- Lynas maintains a strong position as a major producer of rare earths outside of China.
- Yarra Capital Management continues to hold an underweight position in LYC as they struggle to identify value.
- The fund prefers exposure to rare earths through peer Iluka Resources (ILU).
Ten Cap
30 Apr 2025
$8.58
Summary
- Ten Cap took profit in Lynas Rare Earths (LYC) as their investment thesis played out.
- They recognized Lynas as a globally significant asset base likely to receive direct government support amid trade tensions.
- As the market reflected this support in the share price, Ten Cap identified valuation concerns.
- Consequently, they exited the position due to these valuation concerns, despite the underlying commodity prices not reflecting the same increase.
Greencape Capital
30 Sept 2024
$8.02
Summary
- Lynas Rare Earths (LYC) is the largest and only significant producer of separated rare earth materials outside of China.
- Currently has a market capitalisation of approximately $7bn.
- Rare earths have unique magnetic and electrochemical properties, enabling technologies to perform better.
- There is a strong demand outlook for rare earths, driven by growth in automobiles, wind turbines, and robotics.
- The global rare earth supply chain is dominated by China, producing about 90% of separated rare earths.
- LYC owns the Mt Weld rare earth mine in Western Australia, noted for being one of the largest and highest-grade mines.
- LYC's concentrate is processed at its facilities in Kalgoorlie and Malaysia.
- LYC is nearing completion of its Lynas 2025 plan to expand production by over 50%.
- Greencape Capital has been a shareholder in LYC since 2018, rating it the highest among Resources stocks on the ASX.
- LYC has a strong net cash balance sheet, enabling funding for expansion through operating cash flow.
- CEO Amanda Lacaze is highly rated, transforming LYC into a leader in the rare earths sector.
- LYC's culture and employee care contribute significantly to its success over the past decade.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Lynas Rare Earths Ltd (ASX:LYC)?
Fund managers including Greencape Capital, Ten Cap, Yarra Capital Management and Paradice Investment Management have invested in Lynas Rare Earths Ltd (ASX:LYC).
Why do fund managers invest in Lynas Rare Earths Ltd?
Fund managers invest in Lynas Rare Earths Ltd due to its significant asset base and growth potential in the rare earths sector. As a leading producer outside China, the company benefits from geopolitical support and rising demand for Neodymium and Praseodymium, evident in price increases. Recent equity raises aim to enhance processing capacity and resource development, appealing to investors considering the risk/reward profile. However, some managers express valuation concerns and prefer alternatives like Iluka Resources for exposure.
What happened to Lynas Rare Earths Ltd (ASX:LYC)?
Fund managers highlight Lynas Rare Earths Ltd's strong performance driven by a 26% rise in NdPr prices and a significant A$750 million equity raise aimed at expanding processing capacity and resource development. Despite its position as a key global player outside China, some managers, like Yarra Capital Management, remain underweight on the stock due to challenges in identifying value, favoring alternative investments in the rare earth sector.
What is the short interest in Lynas Rare Earths Ltd (ASX:LYC)?
The short interest in Lynas Rare Earths Ltd (ASX:LYC) is 5.87% which makes it the 33rd most shorted stock on the ASX. Of the 1.0B shares that Lynas Rare Earths Ltd has on issue, 59.1M have been sold short.
What does Lynas Rare Earths Ltd (ASX:LYC) do?
Lynas Rare Earths Ltd. engages in the production of rare earth minerals. It focuses on the exploration, development, mining, and processing of rare earth deposits. The company was founded by Nicholas Anthony Curtis on May 23, 1983 and is headquartered in Perth, Australia.