| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 13.1% | - | - |
The Lakehouse Small Companies Fund declined 7.5% in December as share prices of larger holdings fell, demonstrating the volatility inherent in concentrated portfolios. Despite the monthly decline, the Fund has delivered strong long-term performance with 13.1% annualized returns since inception versus 8.5% for the benchmark. The Fund's top five holdings represent 40.2% of the portfolio, led by SiteMinder, Fineos, Catapult, Cogstate, and Objective Corporation. Key developments included Magellan's 4.9% gain as the market begins recognizing value in its Capital Partners segment, particularly the 36.4% stake in investment bank Barrenjoey which has transitioned to profitability. Cogstate provided strong trading updates with contract sales expected up 82-97% despite timing-related margin pressures. The managers used weakness in Cogstate as a buying opportunity, adding to the position. With cash at 5.4%, the Fund remains positioned for opportunities as companies prepare for February half-year reporting season.
The Fund maintains a concentrated portfolio of small-cap Australian companies, focusing on undervalued opportunities with strong fundamentals and growth potential, particularly in technology and healthcare sectors.
January will be a busier period for the Fund as businesses gear up after the holiday break, including preparing for the busy February half-year reporting.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 14 2026 | 2025 Q4 | CAT.AX, CGS.AX, FCL.AX, MFG.AX, OBJ.AX, SDR.AX | Australia, concentrated, growth, small caps, value |
MFG AU CGS AU |
Magellan's Capital Partners segment includes a 36.4% stake in investment bank Barrenjoey, which has successfully disrupted the local investment banking oligopoly and transitioned from capital-intensive build phase to cash-generative harvest phase. Barrenjoey paid its maiden dividend in FY25 and is expanding offshore. Cogstate provided a trading update showing contract sales for H1 FY26 expected at US$37-40 million, up 82-97% on prior period, reflecting record pipeline and diversified wins across disease areas. The company has growing contracted backlog expected to support revenue and margin recovery through second half and beyond. |
| Oct 14 2025 | 2025 Q3 | SDR AU | Australia, private credit, SaaS, small caps, technology | SMM AU | The fund benefited from a takeover-driven rally while remaining cautious about valuation and regulatory risks in private credit. Strong SaaS performance, particularly SiteMinder, underscored resilience in unit economics and scalable revenue models. The managers remain focused on founder-led, high-growth Australian small caps. |
| Jul 27 2025 | 2025 Q2 | AD8 AU, ARB AU, BAP AU, CAT AU, DHG AU, PME AU, PNI AU, RDX AU, TNE AU | Founders, growth runway, Inefficiency, small caps, undercoverage |
ARB AU TNE AU CAT AU PNI AU PME AU AD8 AU RDX AU |
The letter highlights inefficiencies in small-cap markets driven by limited coverage and liquidity constraints. Management emphasizes founder-led businesses with long growth runways and improving fundamentals. Volatility is viewed as an opportunity to build positions at attractive prices. |
| Mar 31 2025 | 2025 Q1 | FCL AU, PIM AU | - | - | |
| Dec 31 2024 | 2024 Q4 | PNI AU | - | - | |
| Sep 30 2024 | 2024 Q3 | SDR AU | - | - | |
| Jul 29 2024 | 2024 Q2 | AD8 AU, ALU AU, CGS AU, CTT AU, IPD AU, NAN AU, PME AU | - | - | |
| May 15 2024 | 2024 Q1 | NWL AU, SDR AU | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
BiotechnologyHealthcare industry positioned for catch-up growth after several years of below-trend performance. Government spending expected to increase relative to feared cuts, with companies signaling improvement in revenue growth. Focus on 'picks & shovels' businesses serving the industry. |
Life Science Tools Pharmaceuticals CRO & CDMO Healthcare Research |
Capital MarketsExchanges operate as essential high-margin toll roads for the economy with immense operating leverage. They benefit from trading volume flowing directly to profits with minimal extra cost and have natural inflation hedging through transaction values. |
Exchanges Nasdaq CBOE Trading Fees Market Data | |
| 2025 Q3 |
Private CreditThe space has become very popular with lots of LP money chasing returns. Some sponsors have paid extremely high prices and lent on unfavorable terms. Many have also lent into the AI/data-center space to businesses with questionable futures. |
Credit Lending Risk |
SaaS Platforms |
||
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 Q2 |
SmallCap |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 27, 2025 | Fund Letters | Donny Buchanan | TNE AU | Technology One Limited | Information Technology | Software | Bear | New York Stock Exchange | capital allocation, Enterprise software, exit, SaaS, valuation | Login |
| Jul 27, 2025 | Fund Letters | Donny Buchanan | CAT AU | Catapult Group International Ltd | Information Technology | Software | Bull | New York Stock Exchange | cross-selling, profitability inflection, Retention, SaaS, Sports tech, valuation, Wearables | Login |
| Jul 27, 2025 | Fund Letters | Donny Buchanan | PNI AU | Pinnacle Investment Management Group Limited | Financials | Capital Markets | Bull | New York Stock Exchange | Acquisitions, asset management, capital allocation, global expansion, Multi-Affiliate Model, organic growth | Login |
| Jul 27, 2025 | Fund Letters | Donny Buchanan | PME AU | Pro Medicus Limited | Health Care | Health Care Technology | Bull | New York Stock Exchange | Cloud software, contract wins, high margins, quality compounder, Radiology It, valuation | Login |
| Jul 27, 2025 | Fund Letters | Donny Buchanan | AD8 AU | Audinate Group Limited | Information Technology | Electronic Equipment, Instruments & Components | Bull | New York Stock Exchange | Av Technology, Inventory Cycle, market dominance, network effect, turnaround, valuation, Video Expansion | Login |
| Jul 27, 2025 | Fund Letters | Donny Buchanan | RDX AU | Redox Limited | Materials | Chemicals | Bull | New York Stock Exchange | chemical distribution, Cost Reset, Family-Led, market share, operating leverage, valuation | Login |
| Jan 14, 2026 | Fund Letters | Donny Buchanan | MFG AU | Magellan Financial Group Ltd | Financials | Asset Management | Bull | New York Stock Exchange | Assetmanagement, buybacks, Capital, Sumofparts, valuation | Login |
| Jan 14, 2026 | Fund Letters | Donny Buchanan | CGS AU | Cogstate Limited | Health Care | Health Care Technology | Bull | New York Stock Exchange | backlog, Clinicaltrials, Cognition, growth, Healthcaretechnology | Login |
| Oct 14, 2025 | Fund Letters | Donny Buchanan | SMM AU | SiteMinder Ltd. | Materials | Application Software | Bull | Australian Securities Exchange | Australia, growth, Margins, platform, SaaS, Scalability, Software, Travel | Login |
| Jul 27, 2025 | Fund Letters | Donny Buchanan | ARB AU | ARB Corporation Limited | Consumer Discretionary | Auto Components | Bear | New York Stock Exchange | Automotive Accessories, exit, macro headwinds, supply chain, tariffs | Login |
| TICKER | COMMENTARY |
|---|---|
| CAT.AX | Catapult was the biggest detractor on no fundamental news, but its share price has continued to weaken following its first half 2026 result, which we discussed last month. Catapult declined -22.7% during the month. |
| CGS.AX | Cogstate provided a trading update indicating contract sales for the first half of financial year 2026 are expected to be in the range of US$37–40 million, up 82–97% on the prior corresponding period and representing its second-best half on record. The result reflects a record pipeline and a more diversified mix of wins across; disease areas, contract sizes and customers, with underlying demand and sales momentum remaining strong. While several contracts were signed late in the half, this delayed revenue recognition, and a higher mix of service-based revenue alongside incremental investment to support an expanding range of indications weighed on reported revenue and margins for the period. Importantly, these impacts are timing-related rather than structural, with the growing contracted backlog expected to support revenue and margin recovery through the second half and beyond. Nonetheless, the timing delays are negative in the short-term and weighed on both the Cogstate share price, and in turn the Lakehouse Small Companies Fund unit price, in December. We saw this as a buying opportunity and topped up the Fund's investment. |
| FCL.AX | Fineos is the second largest holding at month end. |
| MFG.AX | The Fund's most significant contributor to performance during the month was Magellan (+4.9%). At a high level, most will think of Magellan as a (shrinking) investment manager of global listed infrastructure and equity funds. While the market continues to view Magellan primarily through the rearview mirror of its legacy funds management business, our thesis focuses on the less-appreciated value within its 'Capital Partners' segment – in particular the rapid ascent and move to profitability of their stake in Barrenjoey. At a high level, the market implies little value to Magellan outside of its core funds management operations, ignoring the growth from their 36.4% interest in investment bank, Barrenjoey, 29.5% stake in quant investment manager, Vinva, and 16% holding in financial market infrastructure provider, FinClear. The revolving door of issues at Magellan appears to have slowed, management team stabilised, and outflows from the legacy business moderated. Meanwhile Barrenjoey has successfully disrupted the local investment banking oligopoly -- securing top-tier league table positions in M&A and equity capital markets within its short existence -- and, crucially, transitioned from a capital-intensive build phase to a more cash-generative harvest phase, whilst still expanding offshore. Barrenjoey paid its maiden dividend in FY25, and with both Barrenjoey and Vinva set to distribute dividends in the first half of fiscal 2026, we see an improving earnings profile ahead compared to that endured in recent years. The thesis is supported by a pristine balance sheet that offers significant downside protection as the business carries no debt and holds around $560 million in excess capital across cash and liquid investments. It may take several years for this excess capital to fully benefit shareholders, though progress is being made including management buying back approximately 5% of shares on issue over the last 12 months at an average price of $8.15, and broadening the dividend policy to 80% of (the more diversified) group operating profit. Whilst we've only taken a modest position in the portfolio, we see a brighter future ahead for Magellan. With 18% of its market capitalisation in cash and financial assets, and shares selling for discounted single digit earnings multiple, we are paying a deeply discounted price for the investment management business and effectively getting the growth optionality of Barrenjoey – and to a lesser extent, Vinva and FinClear – almost for free. |
| OBJ.AX | Objective Corporation Limited is the fifth largest holding at month end. |
| SDR.AX | SiteMinder is the Fund's largest holding at month end. |
| 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 | |||
