| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 23.7% | - | 2.0% |
| 2025 |
|---|
| 2.0% |
GCQ Flagship Fund delivered a +2.0% net return in 2025, bringing total returns since inception to +110.4% or +23.7% annualized. The year proved challenging for stock picking, with narrow market performance driven by AI-exposed stocks that largely failed the fund's quality checklist. Top contributors included Richemont, LVMH, and FICO, while Hemnet was the primary detractor, declining 60% from highs despite maintaining its dominant 90% market share in Swedish real estate advertising. The fund completely exited Netflix and Alphabet after strong performance, while repurchasing LVMH and FICO during periods of negative sentiment. Swedish housing market weakness from rising rates and reduced bridging loan availability pressured Hemnet's listing volumes. However, the manager views current valuations as extremely attractive, with the portfolio trading well below fair value estimates. The team remains optimistic about 2026, expecting market focus to eventually shift back to fundamentals as AI excitement subsides. The disciplined approach of investing in durable, cash-generating monopolies when undervalued continues to drive the long-term strategy.
GCQ invests in high-quality businesses with durable competitive advantages, monopolies and oligopolies, and irreplaceable brands, purchased when trading at attractive valuations below fair value.
We are highly optimistic about 2026. We are entering the year with a portfolio of extremely high-quality, and we believe, deeply undervalued, stocks. While we cannot pick the timing, we expect both the market's excitement for AI and fears of AI-related disruption will eventually subside, and we believe the market's focus will shift back to the fundamentals.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 22 2026 | 2025 Q4 | CFR.SW, FICO, GOOGL, HEMN.ST, MC.PA, NFLX | AI, Monopolies, Quality, real estate, Sweden, value | HEM.ST | The fund focuses on high-quality businesses with durable competitive advantages, monopolies and oligopolies, and irreplaceable brands. Quality stocks underperformed in 2025 but the manager believes… |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings | |
SwedenHemnet operates the dominant real estate advertising portal in Sweden with approximately 90% market share. The Swedish housing market has experienced declining transaction volumes due to rising interest rates and changes in lending practices for bridging loans. |
Sweden Real Estate Housing Market Interest Rates Lending |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 22, 2026 | Fund Letters | Doug Tynan | HEM.ST | Hemnet Group AB | Communication Services | Online Real Estate Portals | Bull | NASDAQ | Classifieds, Cyclicality, Housing, Monopoly, Premiumisation, Pricingpower, Property | Login |
| TICKER | COMMENTARY |
|---|---|
| CFR.SW | Over the past twelve months, the top five positive contributors to the Fund's +2.0% return include Richemont |
| FICO | Fair Isaac Corporation (FICO), a data and analytics company focused on predicting consumer behavior, contributed to performance. FICO reported strong quarterly financial results and solid fiscal 2026 guidance, which calls for 28% EPS growth. The company also launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. |
| 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. |
| HEMN.ST | However, the Fund meaningfully underperformed in the second half of the year, with Hemnet the most significant detractor from performance. Hemnet's share price has meaningfully underperformed over the last year, with the stock down approximately 60% from its all-time high recorded in February 2025. When we first purchased Hemnet in the middle of 2022, the stock was trading on trough multiples on the back of a weak housing market, with listing volumes down more than -20% year-over-year. Today, Hemnet is trading at even lower multiples than it was then, at 17x forward earnings, despite revenue more than doubling and earnings per share having increased more than +150% over the last three years. |
| MC.PA | The holdings in Applied Materials, Elevance Health, LVMH and Anheuser-Busch InBev were exited |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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