| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | -14.5% |
Colebrooke Opportunities Fund returned -14.53% in H1 2025 amid extraordinary market volatility, but the manager views this as a generational opportunity to build a higher-quality portfolio. The fund made strategic moves including acquiring Macfarlane Group, a UK packaging distributor purchased at less than 10x free cash flow for a business compounding EBIT at 15% annually. The manager also exited NAHL Group after 7 years when the sale process for its critical care division failed, and sold THG Group due to management alignment concerns and weakening market position. Key lessons learned include avoiding illiquid catalyst-driven investments and focusing on businesses where success depends on management continuing proven strategies rather than executing new initiatives. The portfolio now emphasizes distributors like Macfarlane and Midwich that possess high customer switching costs, disciplined incentives, and recurring revenue bases. Despite negative performance, the manager added to his personal investment and believes the current opportunity set represents exceptional value for patient capital.
The fund focuses on acquiring high-quality UK small-cap businesses at attractive valuations, particularly distributors with strong competitive moats, recurring revenue streams, and competent management teams that can compound returns over time.
The manager believes they are faced with a generational opportunity set and now have the right portfolio and operational infrastructure to take advantage of it. Despite psychologically painful performance year to date, he has never felt more excited about the portfolio composition.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 2 2025 | 2025 Q2 | BMY.L, GRG.L, MACF.L, MIDW.L, NAH.L, THG.L | Distribution, liquidity, Quality, small caps, Uk, value, volatility |
MACF LN NAH LN THG LN MACF.L NAH.L THG.L |
Colebrooke delivered -14.53% in H1 2025 but used market volatility to upgrade portfolio quality. Added Macfarlane Group at attractive 10x FCF valuation while exiting NAHL and THG positions. Focus on UK distributors with strong moats and recurring revenues. Manager sees generational opportunity set despite near-term performance headwinds. |
| Jan 20 2025 | 2024 Q4 | ATG.L, ECEL.L, MIDW.L, MOON.L, NAH.L, THG.L, WINE.L, WOSG.L | Building Materials, concentrated, small caps, Uk, undervalued, value |
ECEL.L ASC.L |
UK small cap specialist launched in September 2024 with 5.93% net return. Sold Asos on growth concerns, bought Eurocell at 10x earnings despite strong historical margins. Vertically integrated PVC manufacturer trading below intrinsic value with credible management plan for margin expansion. UK market remains structurally undervalued with attractive opportunities for concentrated, patient capital deployment. |
| Jul 15 2024 | 2024 Q2 | ASC.L, ATG.L, LIT.L, MIDW.L, MOON.L, MRL.L, NAH.L, THG.L, WINE.L, WISE.L, WOSG.L | Luxury, marketplaces, Portfolio Management, small cap, UK Equities, value |
ATG.L WOSG.L |
UK small-cap value manager executed significant portfolio rotation, selling Wise and LCM at substantial gains while adding ATG and WOSG at attractive valuations. New positions benefit from network effects in auction marketplaces and luxury watch distribution relationships. NAHL asset sale process progressing well. Strong focus on competitive moats and management quality in concentrated UK portfolio. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q2 |
DistributionThe fund has invested in two UK distributors, Macfarlane Group and Midwich, focusing on businesses with high customer switching costs, disciplined internal incentives, and recurring revenue bases. These distributors strengthen their market positions during periods of weaker demand and offer attractive risk-adjusted returns through high free cash flow yields. |
Packaging Logistics Switching Costs Recurring Revenue Market Position |
ValueThe manager emphasizes acquiring high-quality businesses at attractive valuations, citing Macfarlane purchased at less than 10x run-rate free cash flow for a business compounding EBIT at 15% annually. The portfolio represents what the manager considers extraordinary value opportunities in current markets. |
Valuation Free Cash Flow EBIT Compounding Quality | |
| 2024 Q4 |
Building MaterialsEurocell operates as a vertically integrated PVC profiles manufacturer and building plastics distributor with over 200 branch locations. The company serves windows and doors installers, small builders, and roofing contractors in the UK market. Management targets £500m sales with 10% operating margins through branch network expansion, improved windows and doors proposition, and garden rooms offerings. |
PVC Construction Distribution Vertical Integration Branch Network |
ValueThe fund purchased Eurocell at approximately 10x current year earnings despite the company's historical ability to earn double-digit operating margins and 20%+ returns on capital. UK plc remains structurally undervalued versus other developed markets. The manager expects to earn well in excess of the 15% IRR target from Eurocell investment. |
Undervalued Cheap Valuation Returns on Capital IRR Target UK Discount | |
Small CapsThe portfolio consists entirely of UK small cap companies including Eurocell, NAHL Group, Midwich, Moonpig, and others. The manager references a small group of UK small cap investors familiar with one undisclosed position. The fund operates in the UK small cap market with concentrated positions. |
UK Small Cap Concentrated Portfolio Specialist Investors Illiquid Names Niche Market | |
| 2024 Q2 |
MarketplacesATG operates leading auction platforms across art/antiques and industrial/commercial verticals, benefiting from network effects where scale aggregates more bidders and auction houses. The business follows the 'Marketplace Playbook' with value-added services like ATG Ship and ATG Pay improving take rates while enhancing the offering to auction houses. |
Auction Network Effects Aggregation Platform |
LuxuryWOSG is a leading retailer of luxury watches and jewelry with 100+ year relationships with top brands, particularly Rolex. The company has ambitious plans to double sales and more than double EBIT by FY28, supported by Rolex's backing for US expansion plans. |
Watches Rolex Brand Equity Distribution | |
E-commerceATG is transforming complex auction purchasing journeys into ecommerce-like experiences through technology improvements. The company focuses on pulling in new bidders by making the process more familiar and accessible. |
Digital Transformation User Experience Online Auctions |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 2, 2025 | Fund Letters | Jack Pailing | MACF LN | Macfarlane Group plc | Materials | Trading Companies & Distributors | Bull | NYSE | Acquisitions, Distribution, FCF, Packaging, Switchingcosts | Login |
| Aug 2, 2025 | Fund Letters | Jack Pailing | NAH LN | NAHL Group plc | Communication Services | Research & Consulting Services | Bear | NYSE | Catalysts, Liquidity, M&A, Risk, valuation | Login |
| Aug 2, 2025 | Fund Letters | Jack Pailing | THG LN | THG plc | Financials | Internet & Direct Marketing Retail | Bear | NYSE | Alignment, Branding, Churn, Governance, Incentives | Login |
| Jun 30, 2025 | Fund Letters | Colebrooke Partners | THG.L | THG Group | Consumer Discretionary | Internet & Direct Marketing Retail | Bear | London Stock Exchange | Customer Defection, DTC, e-commerce, governance issues, Management alignment, Rebranding Risk, Sports Nutrition, UK | Login |
| Jun 30, 2025 | Fund Letters | Colebrooke Partners | MACF.L | Macfarlane Group | Industrials | Trading Companies & Distributors | Bull | London Stock Exchange | Distributor, European expansion, High returns, Industrial, Low Capital Intensity, Packaging, switching costs, UK, Value | Login |
| Jun 30, 2025 | Fund Letters | Colebrooke Partners | NAH.L | NAHL Group | Financials | Specialized Finance | Neutral | London Stock Exchange | Critical Care, Delisting Risk, exit, Legal Services, liquidity risk, M&A catalyst, Personal Injury, UK | Login |
| Jan 1, 2025 | Fund Letters | Colebrooke Partners | ASC.L | ASOS plc | Consumer Discretionary | Internet & Direct Marketing Retail | Bear | London Stock Exchange | Asset Sale, debt refinancing, DTC, e-commerce, Equity, Fast-fashion, turnaround, UK retail | Login |
| Jan 1, 2025 | Fund Letters | Colebrooke Partners | ECEL.L | Eurocell plc | Materials | Building Products | Bull | London Stock Exchange | Branch Network, Building Products, Cyclical Recovery, Equity, ERP implementation, PVC Manufacturing, turnaround, UK housing, Value, vertical integration | Login |
| Jul 1, 2024 | Fund Letters | Colebrooke Partners | WOSG.L | Watches of Switzerland Group plc | Consumer Discretionary | Specialty Retail | Bull | London Stock Exchange | brand partnerships, growth, Jewelry, Luxury Retail, Rolex, Specialty retail, US Expansion, Value, Watches | Login |
| Jul 1, 2024 | Fund Letters | Colebrooke Partners | ATG.L | Auction Technology Group plc | Communication Services | Interactive Media & Services | Bull | London Stock Exchange | Aggregation Theory, Antiques, Art, Auction Platform, Commercial, e-commerce, Industrial, marketplace, network effects, technology | Login |
| TICKER | COMMENTARY |
|---|---|
| MACF.L | We purchased shares in Macfarlane Group in the first quarter of the year, 18 months after first commencing research. We were rewarded for our patience with an average price of 100p/share. Macfarlane is the second distributor to join our portfolio after Midwich. It is the UK's leading provider of specialist protective packaging, with a focus on complex, high-value industrial goods. It has an attractive combination of high returns on capital/low capital intensity, a long-standing and competent management team, and a valuation that we believe materially understated the quality of the business. We paid less than 10x run-rate free cash flow for a business that has compounded EBIT at c.15% per annum for a decade. |
| NAH.L | 7 years after first buying shares in NAHL Group, we sold our entire position in June. My investment thesis throughout our holding period remained consistent: NAHL would use the growing cashflow from its critical care division to fund the development of a vertically integrated claims generation and processing business. Despite over a dozen expressions of interest and more than 4 offers being tabled at various points, the group failed to obtain a price they felt provided fair value to shareholders and issued a sale process cessation notice in mid-June. Without this catalyst in place, the range of possible outcomes widened beyond my comfort zone, including a significant risk of a delisting, so I made the decision to fully exit our position. |
| THG.L | We also sold what had become a small (for us) 3.5% position in THG following the mild recovery in THG's share price in June. Management have begun to act in a way which I fear is not necessarily in the interests of all shareholders. The MyProtein rebrand has exposed that Nutrition's market position is weaker than I thought. The fact that MyProtein is losing long-term customers for non-price driven reasons is therefore particularly worrying. |
| BMY.L | In the weeks since the half-year we have made two further acquisitions, Bloomsbury Publishing and Greggs, and added to our other positions using newly subscribed funds. I will save Bloomsbury and Greggs for the full year letter. |
| GRG.L | In the weeks since the half-year we have made two further acquisitions, Bloomsbury Publishing and Greggs, and added to our other positions using newly subscribed funds. I will save Bloomsbury and Greggs for the full year letter. |
| MIDW.L | Macfarlane is the second distributor to join our portfolio after Midwich. As Midwich cannot control the ebbs and flow of the audio-visual market, Macfarlane cannot do much to influence the end demand for paper and packaging. |
| 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 |
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| No industry data available | |||
