| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.5% | - | 82.1% |
| 2025 | 2024 |
|---|---|
| 82.1% | 29.6% |
Arquitos Capital delivered exceptional 82.1% net returns in 2025, its best year in 14-year history, driven by concentrated positions in three biotech companies. The fund's core strategy targets company-specific special situations in small-cap companies undergoing transitions, seeking multi-bagger potential with limited downside risk. Liquidia Corporation was the largest contributor, rising from $11.76 to $34.49 as its drug Yutrepia achieved one of the most successful launches ever, capturing 25% market share. ENDI Corp appreciated from $11.43 to $16.75 while growing EBITDA and cleaning up its capital structure. Finch Therapeutics gained 19% despite awaiting final court decision on patent litigation victory. The manager maintains high conviction in current holdings, believing they remain as undervalued today as a year ago. Portfolio remains concentrated with some cash, as no new opportunities offer more compelling risk/reward profiles. Key catalysts include pending legal decisions, clinical trial results, and potential M&A activity from strategic buyers like Merck.
Concentrated investment in undervalued small-cap companies going through transitions, particularly biotech special situations with patent protection and unique drug delivery technologies that offer multi-bagger potential with limited downside risk.
Manager believes portfolio companies may be just as undervalued today as they were one year ago despite strong 2025 performance. Expects continued concentration strategy given lack of more compelling opportunities.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 22 2026 | 2025 Q4 | ENDI, FNCH, LQDA, MRK, UTHR | Biotechnology, Concentration, Patents, SmallCap, special situations, value |
LQDA ENDI FNCH |
Portfolio concentrated in biotech companies including Liquidia Corporation with successful drug launch capturing 25% market share, Finch Therapeutics with patent litigation victory, and focus on… |
| Oct 20 2025 | 2025 Q3 | ENDI, FNCH, LQDA | Biotechnology, FDA, healthcare, Litigation, small caps |
LQDA ENDI FNCH |
Arquitos continues to focus on small-cap special situations, emphasizing patient, long-term investments in undervalued companies like Liquidia and Finch Therapeutics. The fund highlights FDA approval… |
| Jul 24 2025 | 2025 Q2 | ENDI, LQDA | Intrinsic Value, narratives, Patience, uncertainty, volatility |
LQDA ENDI |
The letter frames uncertainty as a source of opportunity, highlighting narrative-driven volatility that disconnects prices from intrinsic value. Case studies emphasize patience through legal, regulatory,… |
| Jan 26 2025 | 2024 Q4 | ENDI, FNCH, LQDA, NTPIF | - | - | - |
| Oct 20 2024 | 2024 Q3 | ENDI, LFCR, LQDA | - | - | - |
| Jan 18 2024 | 2023 Q4 | ENDI, LFCR, LQDA, NTPIF, VTY LN | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Biopharma M&AM&A activity has been accelerating, with notable deals including Cidara Therapeutics acquired by Merck for $9.2 billion and Penumbra acquired by Boston Scientific for $14.5 billion. Large pharmaceutical companies will lose patent protection on products generating $400 billion of sales over the next eight years. |
Acquisitions Patent Cliff Consolidation |
TechnologyHoldings span social media, online search, cloud computing and e-commerce including select Magnificent 7 positions. They also own semiconductor companies at reasonable valuations, including picks and shovels businesses like Applied Materials with strong competitive positions and long track records of value creation. |
Technology Semiconductors Cloud Social Media E-commerce | |
| 2025 Q3 |
Small CapsThe fund invests in a portfolio of competitively advantaged small and medium-sized businesses, which remained out of favor for most of the quarter. The strategy of owning leading small-cap businesses has been the foundation since inception, delivering 354 basis points of annual outperformance over the benchmark since inception despite recent headwinds. |
Growth Outperformance Benchmark Russell Businesses |
Special SituationsPortfolio heavily focused on merger arbitrage, sales processes, and corporate actions including Golden Entertainment PropCo OpCo split, Sotherly Hotels buyout with preferred conversion arbitrage, and Mount Logan Capital tender offer. |
Merger Arbitrage Sales Process Tender Offer Corporate Actions Conversion | |
TechnologyThe fund added three technology companies that have each halved over 2025 and hopes to add more. Many tech stocks had become expensive but recent falls present opportunities, though most still aren't cheap enough including Xero. |
Software Valuation Opportunity Selloff | |
| 2025 Q2 |
Uncertainty |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 20, 2025 | Fund Letters | Steven L. Kiel | LQDA | Liquidia Corporation | Health Care | Biotechnology | Bull | NASDAQ | Adoption, Catalysts, FDA approval, IP risk, M&A, Prescriptions, rare disease | Login |
| Oct 20, 2025 | Fund Letters | Steven L. Kiel | ENDI | ENDI Corp | Financials | Asset Management | Bull | Dubai Financial Market | AUM, capital allocation, downside protection, EBITDA, Holdco, Liquidity, undervaluation | Login |
| Oct 20, 2025 | Fund Letters | Steven L. Kiel | FNCH | Finch Therapeutics Group, Inc. | Health Care | Biotechnology | Bull | Dubai Financial Market | Asymmetry, Catalyst, damages, litigation, royalties, Timing, Willful-infringement | Login |
| Jul 24, 2025 | Fund Letters | Steven L. Kiel | LQDA | Liquidia Corporation | Health Care | Biotechnology | Bull | NASDAQ | Biotech, Commercialization, growth, Prescriptions, Trials, valuation | Login |
| Jul 24, 2025 | Fund Letters | Steven L. Kiel | ENDI | ENDI Corp. | Financials | Asset Management | Bull | Dubai Financial Market | Assetmanagement, AUM, cashflow, discount, growth, valuation | Login |
| Jan 22, 2026 | Fund Letters | Steven L. Kiel | LQDA | Liquidia Corporation | Health Care | Biotechnology | Bull | NASDAQ | Biotech, cashflow, Druglaunch, patents, Pulmonary | Login |
| Jan 22, 2026 | Fund Letters | Steven L. Kiel | ENDI | ENDI Corp. | Financials | Asset Management | Bull | NASDAQ | Assetmanagement, AUM, EBITDA, rerating, valuation | Login |
| Jan 22, 2026 | Fund Letters | Steven L. Kiel | FNCH | Finch Therapeutics Group, Inc. | Health Care | Biotechnology | Bull | NASDAQ | Biotech, Legal, litigation, patents, royalties | Login |
| TICKER | COMMENTARY |
|---|---|
| ENDI | ENDI Corp (otc: ENDI) – we profiled ENDI in our 2024 first quarter letter when the share price was around $6.50 per share. The share price declined during the fourth quarter from $17.55 per share to $16.75 per share. ENDI owns CrossingBridge Advisors which manages fixed income mutual funds and a few managed accounts. |
| FNCH | Finch shares ended 2025 at $13.49, rising by 19% for the year despite no major updates to their court case. Finch won a jury trial in August 2024 against Ferring Pharmaceuticals, with the jury finding that Ferring infringed on three of Finch's patents. The jury awarded Finch approximately $30 million in a one-time licensing fee and pre-trial interest, plus ongoing royalties to be determined by the judge and post-trial interest. Importantly, the jury also found willful infringement, opening the door for enhanced damages up to three times the jury award. We continue to wait for the post trial decision from the judge where she will determine an ongoing royalty rate and determine whether enhanced damages will be awarded. |
| LQDA | Liquidia was first introduced anonymously in the YE'24 letter to LPs. At the time, the company was a pre-approval biopharmaceutical company that was mired in patent lawsuits filed by an incumbent (United Therapeutics - UTHR) that was seeking to defend their market position versus an upstart that seems to have a superior product. Since that time, Liquidia's drug – Yutrepia – has been approved for treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). Early sales of Yutrepia have crushed expectations as patients – and prescribers - seem to prefer Yutrepia vs. the incumbent due to superior delivery and tolerability. Between appreciation and adding to the position as the company reached important milestones, LQDA has grown into a top position. |
| MRK | During the quarter, we switched out of a long-held position in Johnson & Johnson into a new holding in Merck. |
| UTHR | Biopharma Eli Lilly, biotech stocks Incyte and United Therapeutics, and life sciences giant Danaher all contributed positively to strong Q4 performance. |
| 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 | |||
