Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 20.5% | -5% | 36.1% |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 20.5% | -5% | 36.1% |
Atai Capital Management declined 5.0% in Q4 2025 net of fees, underperforming benchmarks but delivering strong full-year returns of 36.1%. The concentrated micro and small-cap strategy naturally diverges from indexes, with ~60% of the portfolio in sub-$500M market cap businesses. Key portfolio moves included selling Bel Fuse after nearly three years of ownership, adding to Kitwave Group before its acquisition, and exiting EG7 at a loss. The fund maintains a larger than normal cash position due to strong 2025 performance and difficulty finding attractive opportunities at the required pace. Recent macroeconomic shocks have created price declines that could present new investment opportunities. The manager continues evolving toward higher quality names while maintaining core investment philosophy of favoring lost opportunity cost over potential capital loss from mediocre ideas. The fund increased its AUM cap from $50M to $100M to accommodate larger allocations without hindering the ability to invest in smaller opportunities.
Concentrated micro and small-cap investing focused on quality businesses trading below intrinsic value, with patient capital deployment and rigorous idea selection prioritizing opportunity cost over mediocre investments.
The manager maintains the same views over the past three years and will continue to favor lost opportunity cost over potential capital loss from mediocre ideas. While diligently working to find new ideas, the current market environment is far from fertile for idea generation, but when good ideas eventually arise, excess capital will be deployed.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Mar 10 2026 | 2025 Q4 | BELFB, BKTI, EGAM, HAI.TO, KITW.L | Concentration, Microcap, Objectivity, Philosophy, Quality, small caps | - | Atai Capital's concentrated micro-cap strategy delivered strong 2025 returns despite Q4 underperformance. The fund maintains elevated cash levels due to limited attractive opportunities but stands ready to deploy capital as recent macroeconomic volatility creates potential investments. The manager continues evolving toward quality names while prioritizing selectivity over forced deployment in an unfertile market environment. |
| Dec 2 2025 | 2025 Q3 | ALOT, BELFA, BKTI, MSI, TP | concentrated, defense, Microcap, small caps, technology, value | - | Atai Capital's concentrated micro-cap strategy delivered 10.7% in Q3, led by BK Technologies' transformation under exceptional CEO John Suzuki. BK manufactures mission-critical radios for first responders, expanding beyond wildfire niche to compete with Motorola at half the price. Management targets 10% market share from current 3.5%, offering substantial growth runway at attractive valuation. |
| Aug 14 2025 | 2025 Q2 | ALNT, ALOT, BELFB, CABO, HAI.TO | activism, Concentration, Governance, small caps, value |
CABO ALOT |
Atai Capital posted 32.8% Q2 returns through concentrated small-cap value investing, significantly outperforming benchmarks. The manager increased cash to 17% amid challenging market conditions, exited failed positions Cable One and trimmed AstroNova after value-destructive acquisitions. Focus remains on patient capital deployment with higher hurdle rates given elevated market valuations. |
| May 20 2025 | 2025 Q1 | ALOT, BELFB, CXI, EN7.ST, HAI.TO, QUIS, TPB | Concentration, Manufacturing, Quality, small caps, tariffs, Trade Policy | - | Atai Capital's concentrated micro/small-cap strategy outperformed in Q1 despite tariff volatility, establishing largest-ever position while evolving toward higher-quality businesses. Portfolio now most concentrated in fund history at 67% in top five holdings. Manager navigating trade policy uncertainty with elevated cash position, seeking overseas opportunities given high U.S. valuations while maintaining long-term confidence in portfolio quality. |
| Feb 18 2025 | 2024 Q4 | ALOT, BF, NVDA, SXI, TPB, TSLA | AI, Concentration, Microcap, small caps, valuation, value | ALOT | Concentrated microcap fund underperformed in 2024 despite portfolio refinement efforts. Manager maintains disciplined valuation approach amid elevated market multiples, with 58% holdings under $250M market cap. AstroNova acquisition disappointment offset by confidence in new CFO's operational expertise. AI disruption and tariff uncertainty create market headwinds, but selective opportunities remain for patient capital deployment. |
| Nov 12 2024 | 2024 Q3 | BELFB, GOOGL, HAI.TO, META, MSFT, TPB | defense, growth, Microcap, small cap, Streaming, Video Technology | HAI.TO | Atai Capital outperformed in Q3 with a 6.5% return, driven by a new position in Haivision Systems, a video streaming infrastructure company benefiting from protocol migration trends and defense spending. The microcap-focused fund maintains concentrated positioning with 54% in top five holdings while actively seeking new opportunities despite temporarily elevated cash levels. |
| Aug 22 2024 | 2024 Q2 | ALOT, EG7.ST | gaming, Microcap, small caps, technology, value |
ALOT EG7.ST |
Atai Capital's concentrated microcap strategy faced headwinds in Q2 with a 0.6% decline, but the manager remains optimistic given strong business fundamentals. Key holding AstroNova doubled EBITDA while stock stayed flat, creating compelling value at 5x EBITDA. Small caps trade at historic discounts to large caps, presenting attractive opportunities for patient capital. |
| May 16 2024 | 2024 Q1 | EG7 SS, TPB | - | - | |
| Jan 16 2024 | 2023 Q4 | ALOT, BELFB | Cash, Concentration, EBITDA, small caps, value | ALOT | Small-cap value manager returned 20% in 2023 while holding substantial cash. Portfolio now at peak concentration with 60% in top five positions. Key holding AstroNova surged on unexpected margin expansion, trading at 5.5x EBITDA with $34 target. Deploying remaining 17% cash by Q1 end through new systematic idea generation process. |
| Nov 29 2023 | 2023 Q3 | ATVI, BELFB, CTG, EG7.ST | Concentration, Quality, risk management, small caps, value, volatility | - | Atai Capital's concentrated value strategy declined 5.8% in Q3 but remains positive year-to-date. Manager emphasizes volatility as opportunity rather than risk, using Bel Fuse's 100%+ price swings as example of market inefficiency. Portfolio focuses on quality businesses trading below intrinsic value, with position sizing based on permanent loss risk assessment rather than return potential. |
| Dec 7 2023 | 2023 Q2 | ALOT, ATVI, BELFB, CDR.WA | Electronics, gaming, industrials, small caps, value |
ALOT BELFB ATVI |
Small-cap value fund targeting undervalued companies with clear catalysts. Largest position AstroNova expected to see EBITDA nearly double over 12-24 months. Bel Fuse margins expanding dramatically under new management. Large cash position ready for deployment. Avoiding Big Tech AI bandwagon, viewing current concentration as unsustainable given high valuations and risk-free rates. |
| Apr 13 2023 | 2023 Q1 | ALOT, ATVI, CABO | aerospace, Broadband, gaming, Monopoly, Rural, small cap, value | - | Small-cap value manager targeting monopolistic businesses at deep discounts. Largest position AstroNova benefits from aerospace recovery through cockpit printer monopoly. Activision merger arb with standalone upside. Contrarian Cable One position despite broadband headwinds. High cash from selectivity, not macro fears. Focus on business fundamentals over market timing. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Small CapsThe fund operates a concentrated Micro and Small-Cap strategy that naturally diverges from market indexes. Portfolio consists of ~60% businesses with market caps below $500M, with top five positions accounting for ~60% of the portfolio. |
Microcap Small Cap Concentration |
| 2025 Q3 |
Small CapsAtai Capital operates a concentrated Micro and Small-Cap strategy with 58% of portfolio consisting of businesses with market caps below $500M. The manager acknowledges this strategy will naturally diverge from market indexes and anticipates periods of both outperformance and underperformance. |
Microcap Small Cap Concentrated Divergence Outperformance |
DefenseBK Technologies manufactures Land Mobile Radios primarily for Fire and Police Departments, operating in a mission-critical environment where products cannot fail during first-responder situations. The industry is dominated by Motorola with high barriers to entry driven by brand loyalty and switching costs. |
Land Mobile Radios First Responder Mission Critical Police Fire | |
| 2025 Q2 |
Small CapsThe fund operates a concentrated Micro and Small-Cap strategy with approximately 66% of the portfolio consisting of businesses with market caps smaller than $500M. The manager notes finding the current market environment difficult for idea generation in small caps. |
MicroCap SmallCap Concentration Valuation Opportunity |
ValueThe manager emphasizes maintaining a higher-than-normal hurdle rate for new investments, describing U.S. markets as not cheap today. The fund sold Allient as it approached fair value estimates, demonstrating disciplined value-based selling. |
Valuation Hurdle Rate Fair Value Discipline | |
| 2025 Q1 |
Trade PolicyManager extensively discusses tariff impacts following Liberation Day, noting 10% across-the-board tariffs with Chinese rates fluctuating from 145% to 30%. Emphasizes uncertainty around policy consistency and implementation, with businesses likely to wait out the administration rather than relocate manufacturing to the US. |
Tariffs China Manufacturing Supply Chain USMCA |
QualityManager has evolved strategy to focus on higher-quality businesses, raising the bar and willing to pay more for quality. Notes that best-performing investments have been high-quality companies with solid leadership, leading to more favorable outcomes and upside surprises. |
High Quality Leadership Business Quality Standards Concentration | |
Small CapsPortfolio maintains concentrated Micro/Small-Cap strategy with 51% of holdings having market caps smaller than $250M. Manager acknowledges this strategy will naturally diverge from market indexes with periods of relative outperformance and underperformance expected. |
Micro Cap Small Cap Concentration Market Cap Divergence | |
| 2024 Q4 |
ValuationManager extensively discusses market valuation concerns, noting S&P 500 trades at 22x earnings with top 10 stocks at 29x earnings. Historical analysis shows when paying 20x+ earnings for S&P 500, following 10-year returns have never exceeded 5% annually since 1988. Current market concentration at 38% in top 10 stocks exceeds dot-com era levels. |
Multiples Earnings Historical Concentration Returns |
AIAI space experienced significant disruption in late January with DeepSeek R1 open-source model release, reportedly trained at fraction of cost compared to OpenAI's O1 model. NVDA dropped 17% in one day on this news, with ongoing debate about actual impact on AI revolution among industry experts. |
DeepSeek OpenAI Cost Disruption Revolution | |
Small CapsPortfolio consists of 58% businesses with market caps smaller than $250M. Manager focuses on microcap investing with concentrated approach where top five positions make up 55% of portfolio. Strategy involves buying good-to-great businesses at attractive prices when opportunities present themselves. |
MicroCap Concentration Opportunities Businesses Attractive | |
| 2024 Q3 |
StreamingHaivision provides video networking infrastructure for live streaming, particularly through their SRT protocol which is gaining adoption over legacy protocols like RTMP. The transition from legacy to modern IP-based protocols is expected to intensify over the next 3-5 years, creating growth opportunities. |
SRT Protocol Video Streaming IP Networks Live Video Protocol Migration |
DefenseHaivision serves government and defense customers including NASA, U.S. Department of Defense, and U.S. Navy. The company was recently awarded a large CAD 82M defense contract with the U.S. Navy over five years, representing significant growth potential in this segment. |
Defense Contracts Government Military Navy Contract Mission Critical | |
| 2024 Q2 |
GamingEnad Global 7 operates multiple gaming studios including ToadMan (work-for-hire), Daybreak Games (live service portfolio), and recently acquired Singularity 6 with their cozy game Palia. The gaming industry experienced widespread layoffs and project cancellations this year, impacting ToadMan's performance. |
Live Service Game Studios Free-to-play Gaming Platforms |
Small CapsThe Russell 2000 experienced its worst half in history relative to the S&P 500 and is on track for its third consecutive year of underperformance. Small caps appear undervalued with multiples near the lower end of their historical range, while large caps may be overvalued. |
Russell 2000 Underperformance Valuations Market Dislocation | |
| 2023 Q4 |
ValueManager focuses on companies trading below intrinsic value with substantial upside potential. AstroNova trades at 5.50x normalized EBITDA with clear path to $34/share target. Emphasizes finding businesses worth more than current market price without relying on overly optimistic assumptions. |
Intrinsic Value Undervalued Upside EBITDA Multiple Valuation |
Small CapsPortfolio consists entirely of small-cap companies including AstroNova and Bel Fuse. Manager notes concentration in top five positions at 60% of portfolio with several LSD-MSD positions. Focus on smaller companies with potential for material growth in cash flows over 2-3 years. |
Small Cap Concentration Position Sizing Cash Flows Growth | |
| 2023 Q3 |
ValueManager emphasizes purchasing shares at a discount to intrinsic values as the core investment strategy. Discusses the value arbitrage opportunity when share prices disconnect from business fundamentals, using Bel Fuse as an example where the stock experienced 100%+ volatility while fair value remained stable. |
Intrinsic Value Discount Value Arbitrage Fair Value Undervalued |
VolatilityExtensive discussion on volatility as a mechanism for opportunity rather than risk. Manager argues volatility allows purchasing shares at discounts and should be viewed as a friend of long-term investors, not a measure of risk as taught in business schools. |
Price Fluctuations Short-term Pain Market Timing Beta Academic Theory | |
QualityEmphasizes business quality as a critical component of margin of safety alongside price. Manager discusses the importance of cash flow quality and how minority shareholders benefit from those cash flows, warning against investing in poor businesses even at low prices. |
Business Quality Cash Flows Margin of Safety Fundamentals Minority Shareholders | |
| 2023 Q2 |
ValueManager emphasizes buying companies at substantial discounts to intrinsic value, focusing on businesses trading cheaply for identifiable reasons that can be corrected. Portfolio concentrated in undervalued small-cap names with clear catalysts for value realization. |
Value Discount Intrinsic Cheap Undervalued |
Small CapsFund focuses on small-cap opportunities where illiquidity and lack of institutional coverage create pricing inefficiencies. Manager notes that in small-cap land, Mr. Market doesn't give out free lunches often, requiring deep analysis to identify genuine opportunities. |
Small Cap Illiquid Coverage Institutional Inefficiency | |
AIManager views current AI hype as a bandwagon fueled by FOMO, with investors piling into AI-related names despite decade-high valuations. Compares situation to historical manias and suggests the bandwagon will eventually come to an end. |
AI Hype Bandwagon Valuations FOMO | |
| 2023 Q1 |
AerospaceCommercial airplane production is recovering from COVID lows, with Boeing expected to deliver 800 planes in 2025 and Airbus guiding to 1,000 by mid-decade. AstroNova benefits from this recovery through its monopoly position in cockpit printers, which are standard on all Airbus A320s and purchased directly by airlines for Boeing 737s. |
Commercial Aviation Aircraft Production Cockpit Printers Boeing Airbus |
GamingVideo game industry benefits from secular tailwinds and valuable intellectual properties. Activision Blizzard owns some of the most valuable gaming IPs including Call of Duty, which continues to break sales records despite minimal innovation between releases. |
Video Games Intellectual Property Call of Duty Gaming Franchises | |
BroadbandRural broadband providers face headwinds from fiber overbuilds and Fixed Wireless Access competition, but these threats may be overstated. Cable One maintains essential monopoly status in 65% of its markets while providing internet service that is practically a necessity. |
Rural Broadband Cable Fiber Competition Fixed Wireless |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 14, 2025 | Fund Letters | Atai Capital Management | CABO | Cable One Inc. | Communication Services | Cable & Satellite | Bear | NYSE | ARPU, broadband, cable, Fiber Competition, HFC Network, leverage, Rural Markets, Subscriber Losses, turnaround | Login |
| Aug 14, 2025 | Fund Letters | Atai Capital Management | ALOT | AstroNova Inc. | Information Technology | Technology Hardware, Storage & Peripherals | Neutral | NASDAQ | activist campaign, Data Acquisition, earnings inflection, governance issues, Management Change, MTEX Acquisition, Poor Capital Allocation, Specialty Printers, turnaround | Login |
| Feb 18, 2025 | Fund Letters | Atai Capital Management | ALOT | AstroNova Inc. | Technology Hardware & Equipment | Electronic Equipment, Instruments & Components | Bull | NASDAQ | Aerospace, aircraft production, capital allocation, Data Acquisition, EBITDA multiple, Equity, Industrial, Management Change, Specialty Printers, technology integration, turnaround, Value | Login |
| Nov 12, 2024 | Fund Letters | Atai Capital Management | HAI.TO | Haivision Systems Inc. | Information Technology | Technology Hardware, Storage & Peripherals | Bull | TSX | Canada, Decoders, Encoders, enterprise, Government Defense, growth, Hardware, live sports, SRT Protocol, technology, turnaround, Video Streaming | Login |
| Aug 22, 2024 | Fund Letters | Atai Capital Management | ALOT | AstroNova Inc. | Technology | Electronic Equipment, Instruments & Components | Bull | NASDAQ | acquisition, Aerospace, EBITDA growth, margin expansion, Portugal, Printing Equipment, Test Measurement, Value | Login |
| Aug 22, 2024 | Fund Letters | Atai Capital Management | EG7.ST | Enad Global 7 | Communication Services | Interactive Media & Services | Bull | Stockholm Stock Exchange | acquisition, EBITDA margins, Free-to-Play, game development, Gaming, Live Service, Multi-Platform, Sweden | Login |
| Jul 12, 2023 | Fund Letters | Atai Capital Management | ALOT | AstroNova Inc. | Technology | Technology Hardware, Storage & Peripherals | Bull | NASDAQ | Aerospace, EBITDA growth, illiquid, Monopoly, Printers, small-cap, turnaround, Value | Login |
| Jul 12, 2023 | Fund Letters | Atai Capital Management | BELFB | Bel Fuse Inc. | Technology | Electronic Equipment, Instruments & Components | Bull | NASDAQ | Aerospace, Electric Vehicles, Electronic Components, manufacturing, margin expansion, Networking, turnaround, Value | Login |
| Jul 12, 2023 | Fund Letters | Atai Capital Management | ATVI | Activision Blizzard Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | entertainment, Gaming, Merger Arbitrage, Microsoft Acquisition, Mobile Gaming, Regulatory risk | Login |
| Jan 16, 2024 | Fund Letters | Atai Capital Management | ALOT | AstroNova Inc. | Technology | Technology Hardware, Storage & Peripherals | Bull | NASDAQ | Aerospace, Consumables, EBITDA multiple, Label Printers, manufacturing, margin expansion, Product Identification, restructuring, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| BELFB | The portfolio's top contributor for the quarter was Bel Fuse, which we subsequently sold out of entirely after owning shares, in varying sizes, for nearly three years. If given the opportunity to own Bel Fuse at a more reasonable price, we would not hesitate to be shareholders again. |
| BKTI | Notable detractors for the quarter included our largest position, which we are not disclosing at this time, and BKTI. |
| EGAM | Additionally, we sold out of our remaining position in EG7 at a loss, as our thesis has not played out as expected. |
| HAI.TO | Additionally, we are off to a strong start this year, with Kitwave being acquired, Haivision rallying significantly, and selling out of a few smaller positions. |
| KITW.L | During the quarter, we added to our position in Kitwave Group, a previously undisclosed position that has since been acquired and is no longer in the portfolio. While we are happy to have one of our larger positions acquired, the premium at which it was acquired significantly undervalued the business in our opinion. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||