Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
White Brook Capital's 2025 commentary reveals a manager navigating multiple market dynamics with selective conviction. The firm operates three strategies: an Ethical S&P 500 replacement that performed in line with the index, a Small Cap Absolute Growth strategy that vastly exceeded expectations, and a new All Cap strategy launched after shutting down an underperforming midcap fund. The manager expresses skepticism about AI spending efficacy and the bitcoin treasury company mania, which he believes is ending as these companies now trade below their bitcoin reserves. Portfolio positioning includes overweight housing exposure through Builders FirstSource and Floor & Decor, semiconductor leaders Nvidia and Taiwan Semi as AI rent extractors, and a concentrated healthcare focus in small caps. Key macro concerns include consumer spending divergence across income levels, softening labor markets, and uncertain inflation trajectory. The manager feels optimistic about finding new return pockets across market caps while maintaining discipline around valuation and seeking potential doubles rather than modest gains.
White Brook Capital focuses on finding potential doubles across market capitalizations by investing in best-in-class operators during periods of weak stock prices, with particular emphasis on small cap growth opportunities and selective positioning in AI beneficiaries while avoiding overvalued manias.
The manager feels as good about owning a nimble portfolio of stocks with the ability to find new pockets of returns as they have since starting the firm. They are confident in the future of the new All Cap strategy and expect continued success in the near term for the Small Cap strategy.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 31 2026 | 2025 Q4 | BLDR, FND, GOOG, JAKK, MSFT, MSTR, NVDA, PTLO, RPID, TSM | AI, crypto, growth, healthcare, inflation, semiconductors, small caps, value | - | The efficacy of AI expenditures started to be questioned during Q4 2025. Companies like Microsoft continue spending aggressively on cloud capacity, but value is now… |
| Oct 16 2025 | 2025 Q3 | TGT, TTSH | Artificial Intelligence, Housing, Market Bubble, small caps, Value Investing |
PTLO US TGT US |
White Brook critiques AI euphoria and speculative valuations, comparing the boom to the fiber-optic bubble. The fund remains cautious but opportunistic, favoring companies with real… |
| Jul 15 2025 | 2025 Q2 | - | Compounding, Concentration, free cash flow, Governance, Quality | - | The commentary centers on owning a concentrated portfolio of high-quality businesses with durable competitive advantages. Management emphasizes free cash flow generation, strong governance, and long-term… |
| Apr 5 2025 | 2025 Q1 | - | - | - | - |
| Jan 27 2025 | 2024 Q4 | AFYA, BOX, DNUT, GBRE, GBX, INFU, KAR, LTH, MOS, OKTA, PTLO, RPID, W | - | - | - |
| Oct 22 2024 | 2024 Q3 | AFYA, BLDR, DNUT, OKTA, W | - | - | - |
| Jun 30 2024 | 2024 Q2 | AFYA, BLDR, GPRE | - | - | - |
| Apr 27 2024 | 2024 Q1 | PETQ, RILY | - | - | - |
| Jan 25 2024 | 2023 Q4 | BLDR, GPRE, MOS, RILY | - | - | - |
| Oct 20 2023 | 2023 Q3 | BLDR, GBX | - | - | - |
| Jul 15 2023 | 2023 Q2 | MOS, RILY, U | - | - | - |
| Apr 19 2023 | 2023 Q1 | AFYA, GBX, GPRE, ITRI, KAR, MOS, PSPC, RILY | - | - | - |
| Jan 25 2023 | 2022 Q4 | BOX, GBX, MOS, RILY | - | - | - |
| Apr 11 2022 | 2022 Q3 | BOX, GBX, ITRI, KAR | - | - | - |
| Jun 30 2022 | 2022 Q2 | AFYA, ITRI | - | - | - |
| Mar 31 2022 | 2022 Q1 | IAC, KAR, MHK, MTCH, QRTEA | - | - | - |
| 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 |
CryptoFund focuses exclusively on Bitcoin accumulation through disciplined cycle-aware positioning. Manager shifted to defensive posture in Q3 anticipating correction, ending Q4 with two-thirds Bitcoin and one-third cash. Going forward, fund will hold only Bitcoin based on data showing altcoins have terrible odds with only 1-in-70 beating Bitcoin historically. |
Bitcoin Altcoins Cycles Accumulation Volatility | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
| 2025 Q3 |
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 |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
ValuationAI-related companies continue to command premium valuations while other sectors remain reasonably priced. This valuation divide continues to guide investment activity, with the fund remaining wary of companies trading at exceedingly high valuations that imply exceptional multi-year earnings growth. |
Premium Divide Discipline Stretched Reasonable | |
| 2025 Q2 |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 16, 2025 | Fund Letters | Basil F. Alsikafi | PTLO US | Portillo’s Inc | Consumer Discretionary | Restaurants | Bull | NASDAQ | growth, management, Margins, Restaurants, turnaround, valuation | Login |
| Oct 16, 2025 | Fund Letters | Basil F. Alsikafi | TGT US | Target Corp | Consumer Discretionary | General Merchandise Stores | Bull | NYSE | cashflow, consumer, dividend, management, retail, turnaround | Login |
| TICKER | COMMENTARY |
|---|---|
| BLDR | BLDR declined 28% in 2025 amidst weakness in the housing market and as new home starts pressured sentiment. Fundamentally, the Company performed well despite these headwinds and should generate a significant amount of free cash flow in 2025 ($800MM-$1BB). This translates to a trailing yield of 7-9%. If we owned this business privately, we would be pleased to collect a 7-9% yield in a weak year with the promise of significantly higher cashflows when housing starts pickup. BLDR is a manufacturer and supplier of building materials with a focus on residential construction. Our long-term thesis remains intact as there is a structural shortage of housing in the USA. The company has sustained higher gross margins as they have gained scale. I estimate normalized free-cash-flow per share to be $9-$14 per year implying a free-cash-flow yield of 9-14% with no growth priced in. |
| FND | Floor & Decor (FND) is a business I've wanted to own shares in for some time. They are the leading warehouse-style flooring store with higher in-stock inventory selection and lower prices than scaled competitors, and have been taking market share for years if not decades. In my opinion, they are following the Home Depot model to disrupt a profitable subcategory of home improvement. I still believe the current purchase price is not obviously cheap on near-term earnings, but the purchase price does reflect an attractive valuation on long-term margins. The company's current EBIT margins are about 30% below their long-term pre-COVID levels, and I believe EBIT margins should continue to scale towards the low-to-mid-teens as the company builds out its store base. Current sales per store are depressed by a post-COVID hangover and higher interest rates which have depressed existing home sales, a key catalyst for renovation activity. Higher sales per store will lead directly to higher store-level margins, which flow nicely through to EBIT margins. I believe, with a more favorable existing home sales macro backdrop, that sales can grow at double digits with significant flow-through to the bottom line. It would not surprise me to look a couple years out and see the company generating $6.5B of sales at 7.0% net margins, which would mean the company is trading at 16x that admittedly uncertain (due to macro uncertainty) future earnings with nearly a decade of future store growth and comp growth. I see the company generating nearly $12 earnings per share 10 years from now, when it's store growth plan should be essentially complete. |
| GOOG | From the moment OpenAI hit the scene with ChatGPT 3.5 in the Fall of 2022, Google was a perceived loser and thousands of pontificators warned about the end of search. Fast forward three years and this was Google Search's fastest quarter of revenue growth since Q1 2022, when the reopening and pandemic were still considerable drivers of results. In parallel with the Search re-acceleration, Google has also emerged as a leader in AI itself. This combination has been potent for Google's stock and could not have opened on Search alone, given the terminal value fears. |
| JAKK | The All Cap Strategy also borrows from the highest conviction theses in liquid stocks owned in the Small Cap Strategy and has been a beneficiary of Rapid Micro Biosystems (RPID) rapid rise while also holding the heretofore underwhelming JAKKS Pacific, Inc (JAKK). |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| MSTR | Our original cost basis is around $17/share. Strategy operates as the leader in pioneering corporate bitcoin strategy. The company holds the largest corporate bitcoin stash (by far). It monetizes this through fixed-income securities like convertible notes and structured debt. The case for MSTR is leveraged bitcoin upside under proven capital allocators, with a steady software business on the side. 2025 was a tough year for MSTR. The stock declined 47.53% thanks to BTC volatility and market rotation away from high-conviction names. Putting the 'treasury company' hype aside, which now includes many MSTR copycats, I still think the core thesis holds. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| PTLO | While we'll miss, as we have so far with Portillo's Inc (PTLO), if it's in the portfolio, our belief is that there's the potential to double our investment. |
| RPID | The All Cap Strategy also borrows from the highest conviction theses in liquid stocks owned in the Small Cap Strategy and has been a beneficiary of Rapid Micro Biosystems (RPID) rapid rise while also holding the heretofore underwhelming JAKKS Pacific, Inc (JAKK). |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
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