| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.0% | - | 6.2% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 6.2% | 36.7% | 7.0% | -35.8% | 16.1% | 61.9% |
LVS Growth Portfolio gained 6.2% in 2025 but underperformed the S&P 500's 17.9% return after losing 8.2% in Q4. Netflix remains the largest holding at 18% weight despite declining 21.8% in Q4 due to its $83 billion Warner Brothers Discovery acquisition. The manager maintains conviction in Netflix as the global category killer in scripted entertainment, trading at attractive 20x forward earnings with 20%+ expected growth. The portfolio was hurt by not owning semiconductors, which contributed 8% of the S&P 500's return. Software positions were liquidated due to AI disruption concerns, while tech platforms like Google, Amazon, and Meta performed well. The power basket delivered strong returns with Talen Energy doubling. Interactive Brokers appreciated 48% while fintech holdings face stablecoin disruption risks. The manager launched a levered Event-Driven strategy to capitalize on improved M&A conditions and believes it's time to diversify from concentrated S&P 500 exposure. Several promising new investments are being evaluated for 2026.
Focus on tech platforms with durable competitive advantages while avoiding sectors vulnerable to AI disruption, maintaining conviction in Netflix despite Warner acquisition concerns, and diversifying away from concentrated S&P 500 exposure through event-driven strategies.
The manager is energized to make 2026 a great year and excited to expand with the Levered Event-Driven strategy. Several promising new investments are in the pipeline that will be discussed in future letters.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 10 2026 | 2025 Q4 | AMZN, CW, GOOGL, IBKR, META, NFLX, TLN, WISE | AI, energy, Fintech, growth, software, Streaming, technology | NFLX | Netflix remains the largest holding at 18% weight, viewed as the global category killer in scripted entertainment rapidly eroding linear TV market share. The company is expanding into live entertainment, sports content, video games, and advertising capabilities. Despite the Warner Brothers Discovery acquisition concerns, Netflix trades at attractive 20x forward earnings with 20%+ expected earnings growth. Artificial intelligence is creating significant disruption across software companies, with fears that AI will create competition and reduce switching costs. The manager liquidated software exposure due to concerns that AI will impair terminal values of most public software companies. However, tech platforms with physical economies of scale should benefit from AI by better serving customers and reducing costs. The power basket performed well in 2025 with Talen Energy doubling and the manager maintaining a positive longer-term view on power trends despite volatility in the stocks. The fintech basket includes Interactive Brokers and Wise, facing volatility from interest rate changes and consumer spending sensitivity. Stablecoin risk emerged as a new theme in 2025, particularly for cross-border payments, though current stablecoin costs remain higher than traditional payment rails. |
| Oct 19 2025 | 2025 Q3 | GLNG | Electricity, energy, infrastructure, LNG, Power | - | The fund underscores a global energy thesis centered on surging electricity demand driven by AI, EVs, and emerging market consumption. Investments in Talen Energy, Curtis-Wright, and Golar LNG reflect conviction in the power generation and LNG infrastructure build-out. The manager expects rising electricity prices and capacity constraints to sustain long-term sector returns. |
| Jul 8 2025 | 2025 Q2 | CW | aerospace, Defense Spending, energy security, industrials, nuclear power | CW | Nuclear power and defense electronics represent a durable growth theme driven by rising military spending, modernization, and energy security needs. Curtiss-Wright is positioned as a critical supplier with entrenched market share, benefiting from secular growth in aerospace, naval defense, and nuclear reactor components. The manager views nuclear power as an inflection-point industry with long-duration growth optionality. |
| Apr 2 2025 | 2025 Q1 | ICLR | - | - | |
| Jan 9 2025 | 2024 Q4 | MEDP | - | - | |
| Oct 15 2024 | 2024 Q3 | MEDP | - | - | |
| Jul 23 2024 | 2024 Q2 | TLN | - | - | |
| May 3 2024 | 2024 Q1 | BAH, CACI | - | - | |
| Oct 18 2023 | 2023 Q3 | - | - | - | |
| Jul 18 2023 | 2023 Q2 | - | - | - | |
| Apr 13 2023 | 2023 Q1 | - | - | - | |
| Jan 4 2023 | 2022 Q4 | - | - | - | |
| Nov 10 2022 | 2022 Q3 | - | - | - | |
| Jul 17 2022 | 2022 Q2 | - | - | - | |
| Apr 5 2022 | 2022 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Energy TransitionThe portfolio maintains significant exposure to electrification themes through companies like Bloom Energy, which provides clean, reliable power solutions for AI data centers. The energy transition represents a structural opportunity as companies race to build power infrastructure to support growing electricity demands from AI workloads. |
Electrification Clean Energy Power Generation Fuel Cells Grid Infrastructure | |
FinTechThe fund continues its growth approach to investing in financial and financial-related companies, including payment businesses, financial exchanges, and data providers that enable financial transactions. The common denominator across all holdings is the use of technology and data to better serve customers and grow at above-average rates. |
Payments Digital Banking Financial Technology Data Analytics Financial Software | |
StreamingNetflix represents the fund's exposure to global streaming entertainment, despite near-term headwinds from subscriber growth concerns and content spending. The fund continues to view Netflix as the dominant global streaming platform with durable competitive advantages through its content library, technology infrastructure, and growing advertising business. |
Content Global Advertising Platform Entertainment | |
| 2025 Q3 |
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure |
LNGNatural gas exports represent a key growth driver for the midstream sector. However, concerns about LNG supply/demand fundamentals weighed on some stocks, and potential Russian gas returning to Europe could negatively impact US natural gas exports. |
Exports Natural Gas Global Supply Demand | |
Power |
||
| 2025 Q2 |
DefenseThe team initiated a position in Curtiss-Wright, believing the company is entering a period where multiple near-term growth drivers are converging, including rising defense budgets, commercial aerospace production ramps, nuclear power plant life extensions and new builds, and submarine production. |
Defense Budgets Aerospace Nuclear Submarines |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 8, 2025 | Fund Letters | Luis V. Sanchez | CW | Curtiss-Wright Corporation | Industrials | Aerospace & Defense | Bull | New York Stock Exchange | Aerospace, Data-Center Power, Defense, Nuclear, SMR | Login |
| Feb 10, 2026 | Fund Letters | Luis V. Sanchez | NFLX | Netflix, Inc. | Communication Services | Movies & Entertainment | Bull | NASDAQ | acquisition, advertising, Content, earnings growth, market share, media, Streaming | Login |
| TICKER | COMMENTARY |
|---|---|
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| CW | We initiated Curtiss-Wright, consistent with our high-quality growth orientation. We believe Curtiss-Wright is entering a period in which multiple near-term growth drivers are converging, including rising defense budgets, commercial aerospace production ramps, nuclear power plant life extensions and new builds, and submarine production. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| IBKR | Interactive Brokers saw weakness amid interest-rate uncertainty. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
| TLN | Our power basket performed well with Talen Energy doubling. |
| WISE | Wise is more vulnerable given that cross-border pay is considered a strong use case for crypto and stablecoins. To date, stablecoins do not have much traction in cross-border transfer due to much higher costs than traditional payment rails. Wise has continued to post strong financial performance, which gives us some solace that the risk is still theoretical. I believe Wise still has an opportunity to adopt stablecoin technology and retain its reputation as a disruptor. Wise has an outstanding track record of execution, and I trust management to make the right decisions. |
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