| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 23.7% | 0% | 2% |
| 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 | GCQ delivered +2.0% in 2025 despite challenging stock-picking conditions dominated by AI momentum. Hemnet's 60% decline from highs created the primary drag, though the Swedish real estate portal maintains 90% market share. The team views current portfolio valuations as extremely attractive and remains optimistic about 2026 as market focus shifts back to quality fundamentals. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIArtificial intelligence enthusiasm supported large-cap growth companies and drove technology earnings. Long-term capital investment in AI reflects demographic pressures and labor scarcity, supporting multi-year growth trends despite elevated valuations. |
Technology Growth Investment Productivity |
ValuationsEquity valuations remain elevated with S&P 500 trading near 23x forward earnings, well above long-term average of 15.6x. Elevated valuations constrain longer-term returns and increase market sensitivity to earnings disappointments. |
Risk Earnings Premium Compression | |
EarningsStrong corporate earnings drove market gains, particularly in technology and communication services. Future returns will depend more on earnings durability and cash-flow generation than multiple expansion. |
Growth Technology Durability Cash Flow | |
Infrastructure SpendingElevated spending in artificial intelligence, energy, and infrastructure reflects demographic pressures and labor scarcity. Multi-year capital investment trends may help support growth and reduce traditional recession likelihood. |
Investment Energy Demographics Growth |
| 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 | Top gainers among the Fund's holdings included LVMH (+24%) |
| 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. |
| 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 | |||
