| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 0.106 | 0.020 | 0.148 |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 14.8% | 7.2% | 9.4% | 13.6% | 12.4% | 16.1% |
Upslope delivered strong Q4 performance with +2.0% net returns, capping a solid year with +14.8% annual returns and reduced downside volatility. The fund maintains 40% average net long exposure with 174% gross exposure, reflecting abundant opportunities on both sides. Manager observes accelerating market pace driven by AI proliferation and gambling-like behavior, creating more opportunities for detail-focused investors. Portfolio positioning includes new additions Booz Allen Hamilton (defense consulting), Crown Holdings (aluminum cans), Fanuc (industrial automation), and Henry Schein (dental distribution), while exiting Chemring and West Pharmaceutical due to full valuations. Key themes include defense spending normalization, AI moving into physical applications, and Japanese market reforms. The fund benefits from secular tailwinds including rising geopolitical risks, reshoring trends, and industrial automation adoption. Despite finding quality businesses at attractive valuations, the manager acknowledges difficulty in near-term outperformance given extremely high macro and geopolitical risks combined with persistent risk-on market behavior.
Upslope seeks to deliver attractive, equity-like returns with significantly reduced market risk through a long/short strategy focused on quality businesses at attractive valuations, while navigating a market environment characterized by AI-driven acceleration, gambling-like behavior, and elevated macro uncertainty.
Manager notes it is not difficult to find higher quality businesses at attractive valuations, but very difficult to be confident they will outperform in the near or medium term. The picture is quite clear regarding the challenging backdrop of high macro/geopolitical risks combined with risk-on market behavior.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 13 2026 | 2025 Q4 | 6954.T, 8697.T, BAH, BIO, CCK, CME, DPLM.L, FCN, GOOGL, HOLN.SW, HSIC, HSY, INTC, MKTX, SAND.ST, SMIN.L, STE, TDY | AI, Automation, defense, healthcare, industrials, Japan, Long/Short, mid cap |
BAH CCK 6954 JP HSIC |
Manager exited European defense stocks for the first time since early 2022, citing full valuations and expectations that the Ukraine conflict may wind down. However,… |
| Oct 15 2025 | 2025 Q3 | 8697 JP, BIO, CHG LN, DPLM LN, EVR, FCN, GOOG, HOLN SW, HSY, IMXI, INTC, KDEF, MKTX, SMIN LN, STE, TDY, WST | AI, defense, healthcare, Quality, valuation | - | Upslope remains cautious as valuations stretch and shorting speculative names becomes difficult. The fund adds defensive longs in healthcare and new exposure to the Korea… |
| Jul 15 2025 | 2025 Q2 | - | catalysts, froth, Long/Short, risk control, volatility |
SMIN LN FCN EVR |
The commentary frames volatility as an opportunity for long/short investors with disciplined risk control. Management highlights tariff-driven market swings, frothy valuations, and elevated macro risk.… |
| Apr 14 2025 | 2025 Q1 | ATR, BARN SW, CRL, VFC | - | - | - |
| Jan 15 2025 | 2024 Q4 | 7011 JP, 8697 JP, ATR, CHG LN, CME, CMPO, CRL, DPLM LN, DSFIR NA, NVT, QQ LN, TDY, VFC | - | - | - |
| Oct 14 2024 | 2024 Q3 | 7011 JP, 8697 JP, ATR, BARN SW, CHG LN, CME, CMPO, DPLM LN, DSFIR NA, FTT CN, GRMN, HSY, NVT, NWC CN, TDY, WPK CN | - | - | - |
| Jul 15 2024 | 2024 Q2 | 8697 JP, ATR, BARN SW, CACI, CHG LN, DPLM LN, DSFIR NL, DSFIY, FTT CN, GRMN, HSY, KOZ0 GR, NVT, NWG CN, TDY, WPK CN | - | - | - |
| May 7 2024 | 2024 Q1 | BARN SW, HSY | - | - | - |
| Nov 1 2024 | 2023 Q4 | CHG LN, EMG LN, INTC, NVT, NWC CN | - | - | - |
| Oct 17 2023 | 2023 Q3 | BALL | - | - | - |
| Jul 17 2023 | 2023 Q2 | 8697 JP, FCN, GRMN, X CN | - | - | - |
| Apr 17 2023 | 2023 Q1 | ATR, ATS CN, BC51 GR, BJR GR, CACI, CHG LN, DPLM LN, EMG LN, FCN, FTT CN, GLT, KOG NO, SLGN, TECN SW, X CN | - | - | - |
| Jan 25 2023 | 2022 Q4 | ATS CN, BOKF, CASY, EMG LN, GLT, TCVA | - | - | - |
| Oct 18 2022 | 2022 Q3 | BALL, BOLSAA MM, BWXT, CACI | - | - | - |
| 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 |
AutomationFactory automation represents long-term structural growth opportunity. Keyence leads in sensors and machine-vision systems with 80% margins supported by direct sales model. Structural trends include rising automation, reshoring, and growing complexity in electric vehicle manufacturing providing long runway for growth. |
Factory Automation Industrial Sensors Machine Vision Robotics Industrial IoT | |
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 | |
JapanJapan offers tremendous value opportunities with one-third of companies trading below book value. Corporate governance reforms, record shareholder returns, and structural changes like unwinding cross-holdings are unlocking value. The investment opportunity is in early innings and could last several years. |
Corporate Governance Value Reforms Shareholder Returns Cross Holdings | |
| 2025 Q3 |
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 |
HealthcareHealthcare was the strongest relative contributor in the quarter with holdings increasing nearly +16% compared to benchmark returns of roughly +12%. Exact Sciences was acquired for a significant premium by Abbott Laboratories resulting in an +86% return, while other strong performers included Tarsus Pharmaceuticals, Glaukos following approval of a new product, Penumbra, and Repligen driven by strong earnings results. |
M&A Product Approval Earnings Biotech | |
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 | |
| 2025 Q2 |
VolatilityManager emphasizes volatility as a structural feature of markets, noting that rare events occur far more frequently than expected. April's volatility event validated their convexity approach, with systematic monetization during stress periods. December saw compressed volatility with VIX hitting year lows, creating buying opportunities despite short-term costs. |
VIX Implied Volatility Realized Volatility Convexity Options |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 15, 2025 | Fund Letters | George K. Livadas | SMIN LN | Smiths Group plc | Industrials | Industrial Conglomerates | Bull | New York Stock Exchange | activist, buybacks, conglomerate, divestiture, Industrial, recurring revenue, restructuring | Login |
| Jul 15, 2025 | Fund Letters | George K. Livadas | FCN | FTI Consulting, Inc. | Industrials | Research & Consulting Services | Bull | New York Stock Exchange | Consulting, Counter-cyclical, Distressed, Macro Volatility, restructuring, turnaround | Login |
| Jul 15, 2025 | Fund Letters | George K. Livadas | EVR | Evercore Inc. | Financials | Investment Banking & Brokerage | Bull | New York Stock Exchange | investment banking, M&A Advisory, Macro Tailwinds, Pro-cyclical, recovery | Login |
| Jan 13, 2026 | Fund Letters | George K. Livadas | BAH | Booz Allen Hamilton Holding Corporation | Industrials | Research & Consulting Services | Bull | New York Stock Exchange | AI, Consulting, cybersecurity, Defense, valuation | Login |
| Jan 13, 2026 | Fund Letters | George K. Livadas | CCK | Crown Holdings, Inc. | Materials | Aluminum | Bull | New York Stock Exchange | buybacks, defensive, EBITDA, leverage, Packaging | Login |
| Jan 13, 2026 | Fund Letters | George K. Livadas | 6954 JP | FANUC Corporation | Industrials | Industrial Machinery | Bull | New York Stock Exchange | Automation, CNC, Cyclicality, Reshoring, robotics | Login |
| Jan 13, 2026 | Fund Letters | George K. Livadas | HSIC | Henry Schein, Inc. | Health Care | Health Care Supplies | Bull | NASDAQ | Dentistry, Distribution, efficiency, Margins, Privateequity | Login |
| TICKER | COMMENTARY |
|---|---|
| 6954.T | Fanuc reported September quarter results that beat consensus estimates, raising full-year operating profit guidance by 10% on demand recovery and improved utilization rates. Robot orders were particularly strong, up 38% y/y, driven by reshoring-related automation demand in North America, European automation investments, and new energy vehicle spending in China. Furthermore, at an international robot show in December, Fanuc showcased significant advancements in AI-enabled robotics, with commercialization that may arrive in the coming years. |
| BAH | Booz Allen is a consulting firm focused largely on serving the nation's defense (~50% of revenue), intelligence (~15%) and civil (~35%) agencies. The company's work is mostly focused on technology solutions – e.g. digital transformation, cyber defense, and AI deployment. Following the 2024 election of the Trump administration, BAH shares rapidly de-rated from a peak of nearly 30x EPS to a recent trough of 14x – largely due to "DOGE" cost-cutting fears. While BAH has seen earnings and contract award headwinds under the new administration, Upslope's view is that these will prove temporary and that the stock's current valuation more than compensates investors for short-term challenges and uncertainty. More importantly, Booz should continue to benefit from several accelerating or stable long-term secular tailwinds: rising geopolitical risks, rapidly evolving technology usage and threats, and expanding size of government. |
| BIO | Healthcare has been out of favor in recent years, weighed down by post-Covid headwinds, but we find the highly regulated sector to be structurally attractive given growing demand and significant barriers to entry. With a market cap around $6.5 billion, Bio-Rad Laboratories is smaller than our typical investment, but the company dominates the niches it serves within the areas of life-science research and diagnostics. Vertical integration historically has resulted in strong recurring revenue for the company, and its diversified customer base has further supported stability. Notably, Bio-Rad maintains a one-third stake in German biopharma company Sartorius that has grown significantly since its purchase and provides Bio-Rad with an economic exposure beyond its core businesses. |
| CCK | I've been curious about beverage can makers as stable businesses, but it took reading through Ball Corporation (the biggest player) to get me to Crown Holdings (CCK). |
| CME | Additionally, while CME is a great company and has been an excellent investment for our portfolio, it was at the high end of fair value, and we needed to make room for a new position as the portfolio was at out 20 stock holdings limit. |
| DPLM.L | Diploma delivered strong, broad-based performance, supported by multiple businesses benefiting from the build-out of high-performance computing and data center infrastructure. |
| 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. |
| HSIC | Henry Schein is the leading distributor of dental products in the U.S. and various countries around the world. The company also distributes more general healthcare products. Within its core Dental business, the company holds the leading market share position in all major countries (52% of Dental sales are from the U.S., 28% EMEA, 20% Canada/RoW) in which it operates – generally holding ~25-40% share. In January 2025, KKR announced an agreement to take a strategic stake in Henry Schein. Given their now-15% stake (up from an initial 12%), KKR has actively worked with the board and management to enhance shareholder value. At just 15x 2026 consensus earnings (vs. 12-25x historically), with a highly defensive business model, and optionality surrounding KKR's stake and involvement (continue to improve the business or potentially take it private), HSIC shares appear attractive. |
| HSY | During the quarter, we added to an existing holding of The Hershey Company on relative weakness |
| INTC | even Intel (a frequent punchline for missing cycles) found itself unexpectedly capacity-constrained in data-centre CPUs. |
| MKTX | In the quarter, we initiated a new position in MarketAxess Holdings (MKTX), a Quality Value company that owns and operates the largest e-trading platform in the U.S. for corporate bonds. Bonds are largely traded over the counter, unlike equities or listed derivatives, which are traded on exchanges. Operating a trading platform is all about scale, where volume determines profitability. Rising customer activity can be a virtuous circle that begets more trading as depth of liquidity improves for all platform participants. Improved liquidity, in turn, drives down trading costs, which then attracts even more volume. Scaled trading platforms can be extremely profitable. MKTX's operating margin, for example, exceeds 40% while gross margin can exceed 75%. Though MarketAxess pioneered electronic bond trading, prior management rested on their laurels as peers launched new trading protocols that gained market share. MKTX's bread and butter is providing leading market depth in single-bond trading. But the industry has witnessed the rapid adoption of portfolio trading (PT), where asset owners can bundle a portfolio of bonds and receive better pricing versus trading on a bond-by-bond basis. Tight corporate bonds credit spreads as of late have exacerbated the shift to PT. CEO Chris Concannon has led a multi-year initiative to invest in a competing PT product among other value-added tools being launched by MKTX. Management has chosen not to wait for a better market environment to advance their efforts. As a result of this push, the company's operating margin declined to around 41% last year, down from more than 45% in 2022. We have been encouraged by recent trading data that suggest MKTX is gaining share in key areas of the U.S. credit market, with share recovery happening even faster than we expected. Looking forward, moderating investment spend should result in better operating leverage. We also believe the company's international and emerging markets businesses, where electronic trading penetration is lower than in the U.S., have significant growth opportunity and scale advantages. When we purchased the stock in the fourth quarter, MarketAxess was trading at 12.6 times consensus EV/EBITDA estimates for 2026. Since then, the multiple has expanded to 13.7 times. This is still favorable to the company's domestic exchange peers, who are trading at a median multiple of 16.6 times, despite MKTX's superior profit margins and balance sheet. |
| SMIN.L | Smiths is making tangible progress in its transition toward a more focused, higher-performing portfolio of industrial technology businesses. The pro forma company (John Crane and Flex-Tek) is positioned for structurally higher growth, margins, and returns than the legacy conglomerate. Their improved growth and profitability profile is complemented by a pristine balance sheet and substantial shareholder returns. While the shares have performed well recently, Smiths continues to trade at a modest valuation relative to its fundamental outlook and at a discount to its estimated break-up value. |
| STE | STE trades ~25x 2026 EPS and 21x 2027 EPS, versus SHC at 17x and 14x my estimates, respectively. |
| TDY | Teledyne Technologies, a diversified industrial technology company, declined as expectations for near-term acceleration were pushed out. |
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