| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 16.07% | - | -9.78% |
Emeth Value Capital returned -9.78% net in H1 2026 versus +11.65% for MSCI ACWI, bringing the one-year return to -17.30% versus +23.92% for the index. Since inception in December 2015, the fund has returned +16.07% annualized versus +12.45% for the index. The manager has spent the last three months building AI-enabled workflows across the investment process, improving quality and efficiency more than the prior decade. These tools ingest thousands of daily regulatory filings globally to surface high-signal insider purchases, buybacks, ownership changes, and company-specific data. The manager initiated a position in Shift4 Payments, a vertically integrated payments company with leading positions in restaurants, hotels, stadiums, and luxury retail. Shift4 has compounded EBITDA at nearly 50% annually since IPO while keeping share count growth to only 2% annually. The company trades at less than 7x EBITDA despite having nearly $1 trillion in payment cross-sell opportunity. Base case valuation implies 162% upside. The manager believes Shift4 is well-positioned against AI disruption given its bundled offering and structural switching costs.
The manager is building an AI-native investment process while maintaining a concentrated portfolio of high-quality businesses trading at significant discounts to intrinsic value, exemplified by the new position in Shift4 Payments.
The manager expects Shift4 Payments to continue growing significantly without acquiring a single new customer by converting its existing $1 trillion cross-sell pipeline. The company is also acquiring new customers at scale, with SkyTab POS deployments exceeding targets. The scaffolding being built today with AI-enabled workflows will be ready-made for tomorrow's still more powerful models, and the benefits to the investment process are becoming material.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 12 2026 | 2026 Q2 | DRVN, FOUR, TOST | AI, Buybacks, Capital Allocation, payments, Restaurants, Vertical Software | FOUR | Emeth Value Capital underperformed in H1 2026 but has built AI-native workflows that dramatically improve process efficiency. The manager initiated Shift4 Payments, a vertically integrated payments company trading at 7x EBITDA with $1 trillion in cross-sell opportunity. Shift4 has compounded EBITDA at 50% annually since IPO with minimal dilution. Base case valuation implies 162% upside. The company is well-positioned against AI disruption. |
| Feb 4 2026 | 2025 Q4 | SPB.TO | Canada, CNG, Consolidation, Distribution, energy, Propane, Transformation, value | SPB CN | Emeth Value Capital underperformed significantly in 2025 but maintains focus on businesses with durable competitive advantages. Superior Plus represents the investment philosophy through its dominant propane distribution platform with sticky customer relationships and ongoing operational transformation targeting $70 million EBITDA improvement. Portfolio positioned in physical activity businesses protected from AI displacement while benefiting from infrastructure growth. |
| Jul 14 2025 | 2025 Q2 | ADBE, AMZN, BN, BRK-B, BYTZ.L, CDW, CTG.L, DHR, GOOGL, IBM, INTC, META, MO, MSFT, NOW, NSIT, ORCL, SWON.SW | Cloud, Enterprise, Leverage, Microsoft, Operating Leverage, software, technology |
SWON SE SWON.SW |
Emeth Value Capital focuses on businesses with one-sided operating leverage, combining downside protection with upside growth potential. The primary holding, SoftwareOne, experienced significant challenges in 2024 but is positioned for recovery through new leadership, cost reduction, and the strategic Crayon merger, creating substantial value creation opportunities in the expanding enterprise cloud market. |
| Feb 7 2025 | 2024 Q4 | DRVN, SEAT, UA | Concentrated Portfolio, Entertainment, Event Ticketing, Expectations, marketplaces, Reflexivity, Value Investing | - | Emeth Value Capital's concentrated value approach delivered 28.51% returns in 2024, outperforming by 12.08%. The portfolio offers superior earnings yields compared to concentrated S&P 500 indices. Extensive analysis of Vivid Seats highlights secondary ticketing opportunities at attractive valuations. The manager leverages inverse reflexivity dynamics where low expectations create strategic flexibility for portfolio companies. |
| Aug 14 2024 | 2024 Q2 | BDEV.L, MO, RDW.L | Capital Cycle, Homebuilders, regulation, supply, Tobacco, United Kingdom, value | - | Capital cycle analysis drives investment in UK homebuilding leader Barratt Developments, where regulatory complexity creates oligopolistic returns despite declining volumes. Barratt-Redrow merger enhances multi-branding capabilities with eighty-five percent upside to intrinsic value. Similar to tobacco case study, supply-side constraints generate exceptional returns for incumbents with structural competitive advantages. |
| Jan 30 2024 | 2023 Q4 | DRVN | Automotive, Consolidation, Franchising, small cap, value | DRVN | Value investing has been damaged by passive flows, but this creates extraordinary opportunities for remaining practitioners. Emeth targets companies at 5x earnings that return cash through dividends and buybacks, building portfolios so cheap success is nearly inevitable. Driven Brands exemplifies this approach - trading at 9x EBITDA despite 40% discount to peers and superior growth from Take 5 Oil Change expansion delivering 45% returns on new locations. |
| Jan 8 2023 | 2023 Q2 | BBU, BEP, BIP, BN, DKS | Alternative Asset Managers, Brookfield, infrastructure, insurance, real estate, Renewable Energy, Value Investing | ABBN SW | Concentrated value fund focused on Brookfield Corporation, a leading alternative asset manager trading at a significant discount following its asset management spin-off. The manager sees 79% upside potential driven by Brookfield's diversified real asset platform spanning renewables, infrastructure, and real estate. The thesis centers on long-term value creation in high-quality businesses with strong management ownership. |
| Dec 2 2023 | 2022 Q4 | DESP | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager has built AI-enabled workflows across the investment process over the last three months, including insider purchase tracking, buyback monitoring, unified ownership tracking, and company-specific diligence. These tools ingest thousands of regulatory filings daily across global markets, structure data, and surface high-signal opportunities. The manager believes the quality and efficiency of the process have improved more in the last three months than in the last decade. |
Workflow Automation Data & Analytics Process Efficiency |
PaymentsThe manager initiated a position in Shift4 Payments, a vertically integrated payments company with leading positions in restaurants, hotels, stadiums, and luxury retail. Shift4 has compounded EBITDA at nearly 50% annually since IPO while keeping share count growth to only 2% annually. The company trades at less than 7x EBITDA despite having nearly $1 trillion in payment cross-sell opportunity from recent acquisitions. Base case valuation implies 162% upside. |
Merchant Acquiring FinTech Vertical Software Restaurants Hotels | |
BuybacksThe manager tracks share repurchase activity globally in real time by ingesting regulatory filings across multiple markets. Companies report buyback activity daily in the UK and Australia, weekly in France, and monthly in Canada. The workflow scores management on historical buyback timing, reconstructs program parameters, and calculates true net buyback percentages after dilution. This surfaces 4-5 high-signal buyback notices daily. |
Capital Allocation Shareholder Returns | |
| 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 Q2 |
LeverageManager explores various forms of leverage as force multipliers for extraordinary outcomes, including financial leverage, operating leverage through pricing power, and technology-enabled hyperscalability. Emphasizes one-sided operating leverage where downside is protected by durable cash flows while upside benefits from growth with operating leverage. |
Operating leverage Pricing power Financial leverage Scalability Margin expansion |
CloudExtensive discussion of cloud computing transformation in enterprise IT, including migration from on-premise to cloud-based solutions, Microsoft's cloud strategy evolution, and the growing importance of cloud solution providers in the technology ecosystem. |
Cloud migration Azure AWS Cloud infrastructure SaaS | |
Enterprise SoftwareDeep analysis of enterprise software licensing business models, evolution from perpetual licenses to subscription-based models, and the critical role of software asset management in helping organizations optimize their IT spend across hundreds of vendors. |
Software licensing Enterprise agreements Software asset management IT optimization Subscription models | |
| 2024 Q4 |
Event TicketingExtensive analysis of Vivid Seats as a secondary ticketing marketplace with 20% US market share. The live events industry has grown faster than GDP for 34 of the last 40 years. Secondary ticketing represents $17 billion annually with 20% commission rates versus primary's $45 billion at 5-7% rates. |
Secondary Markets Live Events Marketplace Commission Rates Market Share |
EntertainmentLive entertainment spending has increased faster than GDP for 34 of 40 years, growing at 1.4x GDP rate. Artists now derive 90% of income from touring versus 50% from album sales in 1997. Over 10,000 artists now tour North America, up 40% from a decade ago. |
Live Music Touring Revenue Artist Economics Concert Industry Revenue Streams | |
MarketplacesVivid Seats operates as a leading online marketplace with unique competitive advantages including Skybox ERP platform used by 70% of professional brokers, proprietary data access, and white-label solutions generating $125 million in revenue. |
Platform Business Network Effects B2B Software Data Advantage White Label | |
| 2024 Q2 |
HomebuildersUK homebuilding industry benefits from structural supply constraints due to complex planning system. Only large volume builders can navigate regulatory complexity, creating oligopolistic market structure with exceptional returns on capital. |
Planning Supply Volume Regulation Oligopoly |
TobaccoTobacco industry demonstrates how regulatory barriers create pricing power despite declining volumes. Advertising bans prevent new entrants while excise taxes enhance pricing power for incumbents. |
Regulation Pricing Barriers Oligopoly Decline | |
| 2023 Q4 |
ValueManager emphasizes buying companies at extremely cheap valuations where fundamental buyers have disappeared due to passive investing. Strategy focuses on companies trading at 5x earnings that return cash through dividends and buybacks, building portfolios so cheap and unloved it will be difficult to lose. |
Multiple compression Passive investing Earnings yield Unloved stocks |
Auto AftermarketExtensive analysis of Driven Brands as the largest automotive services platform in North America with over 5,000 locations. Industry benefits from growing car parc, increasing vehicle complexity, and shift from DIY to DIFM services. Highly fragmented market provides consolidation opportunities. |
Automotive services Franchising Market consolidation Vehicle maintenance | |
Electric VehiclesManager argues EV transition concerns are overblown for oil change business. Analysis shows even with 50% BEV penetration in new car sales over a decade, ICE vehicles on road would only decline 8% due to slow fleet turnover. Geographic concentration in Gulf Coast states provides additional protection. |
EV transition Fleet turnover Geographic exposure ICE vehicles | |
| 2023 Q2 |
Alternative Asset ManagersBrookfield Corporation represents a leading global alternative asset manager with over $400 billion in assets under management. The manager views the alternative investment sector as positioned for robust growth, driven by increasing institutional allocations and the democratization of alternatives reaching retail investors. Brookfield's acquisition of Oaktree and strong franchises in renewables and infrastructure position it well for continued expansion. |
Asset Management Private Markets Institutional Retail Growth |
Renewable DevelopersBrookfield Renewable Partners owns one of the world's largest portfolios of hydroelectric, wind, solar, and renewable storage assets. The manager highlights the partnership's development pipeline of over 200,000 GWh of power projects and expects 5% annual cash flow growth from development activity. The quality of hydro assets provides perpetual cash flows with superior capacity factors compared to wind and solar. |
Hydroelectric Wind Solar Development Pipeline | |
Infrastructure SpendingBrookfield Infrastructure Partners owns critical global infrastructure including utilities, transport, midstream, and data segments. The manager emphasizes the partnership's proven record of consistent dealmaking across market cycles with a 26% blended IRR across concluded investments. Infrastructure assets provide inflation-indexed cash flows and long-term contracted revenues. |
Utilities Transport Midstream Data Contracted | |
Commercial Real EstateBrookfield owns a $22 billion portfolio of global office and retail properties, with the manager acknowledging current headwinds from rising interest rates. However, they emphasize that over 80% of their office portfolio consists of high-occupancy, trophy properties with long-term leases. The post-pandemic recovery has been weighted toward the best office assets as corporates trade up in quality. |
Office Retail Trophy Properties Occupancy Recovery | |
InsuranceBrookfield has invested heavily in scaling its insurance solutions business since 2020, underwriting predictable long-term insurance liabilities in life and annuity verticals. The manager views this as a better form of banking, borrowing long and investing long, targeting mid-teens returns on equity. Recent acquisitions of American National and American Equity position the business for significant scale. |
Life Insurance Annuities Underwriting Spread Scale |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 12, 2026 | Fund Letters | Emeth Value Capital | FOUR | Shift4 Payments | Other | Transaction & Payment Processing Services | Bull | - | capital allocation, Cross-sell, deep value, Fintech, Hospitality Software, M&A Roll-up, Merchant Acquiring, Payment Gateway, payment processing, POS Systems, Restaurant technology, SaaS, Sports Venues, tax-free shopping, vertical integration | Login |
| Feb 4, 2026 | Fund Letters | Andrew Carreon | SPB CN | Superior Plus Corp. | Energy | Oil & Gas Storage & Transportation | Bull | New York Stock Exchange | buybacks, cashflow, consolidation, Distribution, EBITDA, energy, Logistics, Propane, turnaround | Login |
| Jul 14, 2025 | Fund Letters | Andrew Carreon | SWON SE | SoftwareOne Holding AG | Information Technology | IT Consulting & Other Services | Bull | Swiss Exchange | cloud, Margins, Procurement, Software, transformation | Login |
| Jul 14, 2025 | Fund Letters | Emeth Value Capital | SWON.SW | SoftwareOne Holding AG | Information Technology | IT Consulting & Other Services | Bull | SIX Swiss Exchange | Channel partner, cloud solutions, Enterprise software, IT services, Merger Synergies, Microsoft Partner, Software Reseller, Switzerland, turnaround, Value | Login |
| Jan 30, 2024 | Fund Letters | Emeth Value Capital | DRVN | Driven Brands Holdings Inc. | Consumer Discretionary | Automotive Retail | Bull | NASDAQ | Auto Glass, Automotive Services, Car wash, Collision Repair, DIFM, franchise, Multi-Site Operator, North America, Oil Change, private equity, Quick Service, turnaround, Value | Login |
| Aug 1, 2023 | Fund Letters | Emeth Value Capital | ABBN SW | Brookfield Corporation | Financials | Asset Management & Custody Banks | Bull | NYSE | Alternative Asset Manager, Carried interest, demerger, Fee Related Earnings, infrastructure, Institutional Investors, permanent capital, private equity, Real Estate, Renewable Power | Login |
| TICKER | COMMENTARY |
|---|---|
| FOUR | Shift4 Payments is a vertically integrated payments company with leading positions across restaurants, hotels, stadiums, entertainment venues, and luxury retail. In particular, Shift4 owns the second-largest restaurant POS platform in the United States, behind only Toast. In addition, at least one of its products is used by forty percent of U.S. hotels and the company processes payments for more than seventy-five percent of professional sports venues. The company today serves over 300,000 merchants, across seventy-five countries, and processes approximately $250 billion in annual payment volume. Since IPO, Shift4 has increased its EBITDA more than fourteenfold, from $85 million to now on a trajectory of $1.2 billion in 2026. In other words, a nearly fifty percent compounded annual growth rate over a seven year period. Over that same timeframe, Shift4's total shares outstanding have increased only fifteen percent cumulatively, or a two percent compounded annual growth rate. Shift4 have been the best capital allocators in the payments space, and it's not a close race. Against roughly $2 billion in capital deployed in non-restaurant segments since 2017, Shift4 is generating a similar circa $500 million in annual EBITDA. At the quarter-end price of $48 per share and resulting $8.5 billion enterprise value, Shift4 is being valued as though it were in liquidation. Adjusted for the recent purchase of Global Blue, Shift4's core verticals trade for less than 6x EBITDA; including Global Blue, the company in aggregate trades for less than 7x EBITDA. Against a current base of approximately $250 billion in end-to-end payment volume, even a low-single-digit annual conversion rate across the existing cross-sell funnel would be meaningfully accretive to growth. Global Blue adds another approximately $500 billion of cross-sell opportunity, bringing the total pipeline to nearly $1 trillion. The base case scenario modeled results in a share price of $127.37 per share, or 162% upside to intrinsic value. |
| TOST | Toast was growing exponentially, surpassing 50,000 U.S. restaurant locations in 2021, and it was increasingly clear that Shift4's existing POS portfolio was not equipped to compete effectively for net new merchants. This remained true despite Toast charging $4,000–$5,000 in upfront hardware and implementation costs and more than $300 per month in recurring SaaS fees: restaurants clearly were not willing to accept an inferior product merely to save a few thousand dollars. At Toast's current pricing, a restaurant pays $69 per month for each workstation. Want an integrated loyalty program, gift cards, and the ability to send SMS and email campaigns to customers? That is another $185 per month for Toast's loyalty and marketing module. Want to accept more than 25 table reservations per month? That is another $199 per month for Toast Tables Plus. Want customers to scan a QR code, browse the menu, and order directly from their phones? That is another $75 per month for the mobile order-and-pay module. Want to integrate with third-party delivery platforms such as Uber Eats and DoorDash? That is another $75 per month for each integration. SkyTab POS includes every one of these modules and integrations for free while charging just $29.99 per month for each workstation. Altogether, the same restaurant can save more than $40,000 during its first five years on SkyTab compared with Toast. On a fully burdened basis – including the purchase price of the acquired platforms – SkyTab POS averages only $5,500 of customer acquisition cost per new location, compared with roughly $21,000 for each new location added by Toast. Toast is expected to generate $800 million of EBITDA in 2026 and it is currently valued at an enterprise value of $17 billion. |
| DRVN | It has long been part of our process to track insider activity filings. For instance, if you want to see the insider activity for Driven Brands (DRVN), there is usually a tab for that on the company page. |
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