| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Brennan Asset Management navigated a volatile first quarter dominated by the Iran war and Strait of Hormuz closure, which drove oil prices up nearly 70%. Despite initial market declines of 8%, markets rallied to all-time highs on hopes of resolution. The portfolio experienced mixed results from company-specific events. PTSB accepted a disappointing €2.97 cash bid from BAWAG, significantly below estimated intrinsic value, frustrating the manager despite the investment's ultimate success. Warner Bros. Discovery's sale to Paramount for $31 per share provides an exit opportunity, with the manager selling to fund higher conviction names given expected goodwill write-downs. CAB Payments showed operational progress with strong revenue growth and new partnerships, while facing a low-ball takeover attempt from Helios that competing bidder StoneX topped by 30%. The manager increased positions in CODI following activist involvement and subsidiary sales that should accelerate deleveraging. DCC's stable propane distribution business remains attractive despite some energy transition headwinds. The manager maintains a cautious stance given elevated valuations and geopolitical risks, deploying capital selectively in a narrow opportunity set.
Focus on undervalued European and US small-cap companies with specific catalysts, while managing geopolitical and valuation risks through selective positioning and cautious capital deployment.
The manager continues to see risks to the broader market given elevated valuations and significant geopolitical concerns. They recognize the opportunity set is narrow in the current market and will deploy any future sale proceeds cautiously. They continue to find select pockets of value but acknowledge the challenging environment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 24 2026 | 2026 Q1 | CAB.L, CODI, DCC.L, MTRO.L, NFLX, PARA, SNEX, WBD | Banking, energy, Europe, Geopolitical, M&A, Media, payments | - | Brennan navigated Iran war volatility while managing portfolio-specific events. PTSB's disappointing sale to BAWAG frustrated despite success. Selling WBD to Paramount for higher conviction names. CAB Payments turnaround gaining traction amid takeover battle. Increased CODI position following activist involvement. DCC's stable propane business remains attractive. Cautious deployment given elevated valuations and narrow opportunities. |
| Jan 18 2026 | 2025 Q4 | CODI, DCC.L, GLIBA, MTRO.L, NFLX, PTSB.IR, WBD | AI, Banking, energy, international, Media, special situations, value |
MTRO LN PTSB ID WBD CODI DCC LN |
Manager maintains defensive positioning amid historically expensive markets (41x CAPE) while pursuing undervalued international opportunities. Key catalyst-driven holdings include Metro Bank's MREL exit and transformation, PTSB's pending sale, and Warner Brothers Discovery's acquisition battle. DCC offers focused energy distribution exposure post-divestitures. Portfolio concentrated in special situations with multiple rerating catalysts despite challenging macro environment. |
| Jul 20 2025 | 2025 Q2 | CHTR, CMCSA, CODI, GLV.L, LBRDA, MTRO.L, TIGO | Banking, Europe, international, M&A, tariffs, Telecom, Trade Policy, value |
TIGO MTRO.L PTSB.L CODI CHTR |
International value investor warns of tariff-driven market complacency while positioning for regulatory catalysts in European banking and telecommunications M&A opportunities. Strong performance from TIGO and European bank holdings validates contrarian international focus. Charter's Cox acquisition at 6x EBITDA offers exceptional cable sector value despite widespread pessimism. |
| May 1 2025 | 2025 Q1 | AIBG.L, ARCO, BOI.L, CODI, GLV.L, GTX, LBRDA, MTRO.L, PLTR, SIRI, TIGO, TSLA | Banking, Europe, inflation, Ireland, tariffs, Trade Policy, value | PTSB.L | Trump 2.0's unprecedented tariff policies created massive market volatility and recession fears, with rates reaching 145% on China trade. This dislocation presents opportunities in undervalued international names, particularly European financials and Irish banks like PTSB. While maintaining defensive positioning with powder dry, the manager is selectively adding to bombed-out value names as capital may finally look beyond expensive U.S. technology dominance. |
| Jan 26 2025 | 2024 Q4 | ARCO, CHTR, CODI, LBRDK, LILAK, MCD, MEGA.MX, TIGO, TSLA | Banking, Buybacks, Capital Allocation, LatAM, Telecom, Valuations, value | - | Value manager maintains concentrated positions in undervalued Latin American telecom, European banking, and other out-of-favor sectors while US markets trade at historic highs. Reduced underperforming LILAK, increased CODI exposure, and sees substantial upside in holdings like TIGO trading at 7x free cash flow. Strategy focuses on patient capital allocation in discounted international markets versus expensive US growth stocks. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
OilIran's closure of the Strait of Hormuz has driven oil prices up nearly 70% since the start of the year, with US gas prices jumping over $1 per gallon to approximately $4.10. The manager notes this could have meaningfully harsher economic impact for foreign economies without US shale resources. |
Iran Strait of Hormuz Energy Geopolitical |
PropaneDCC's core propane distribution business is described as highly stable with a long growth track record across different economic and energy cycles. The manager views the business as resilient even in severe recession scenarios, with only modest declines expected. |
DCC Distribution Energy Stability | |
MediaWarner Bros. Discovery sale to Paramount for $31 per share is expected to close in Q3 2026. The manager anticipates large goodwill write-downs for the combined company given the awful track record of large media deals and staggering pro-forma debt levels. |
Warner Bros Paramount M&A Debt | |
PaymentsCAB Payments showed operational progress with 2025 revenue reaching £119 million ahead of estimates, new Deutsche Bank clearing partner, and Abu Dhabi license. First quarter revenue rose approximately 35% with revenue ex-net-interest income up 60% year-over-year. |
CAB Payments Revenue Growth Clearing Turnaround | |
Regional BanksPTSB accepted a disappointing €2.97 cash bid from BAWAG, significantly below the manager's estimated intrinsic value of €4.30 mark-to-market tangible book value. The deal structure prevents minority shareholders from participating in synergies upside. |
PTSB BAWAG Acquisition Valuation | |
| 2025 Q4 |
AIAI emergence has created market hysteria and broad software sell-offs despite limited real-world automation success. Manager believes dominant vertical software platforms can successfully reinvent themselves for an agentic world and fend off AI-native startups through domain expertise and mission-critical systems integration. |
Artificial Intelligence Software Automation Technology |
SoftwareSoftware sector treated as monolith awaiting AI disruption, but manager sees meaningful differentiation. Incumbents with engineering talent and proprietary data have structural advantages in deploying AI tools. Early adopters historically capture more economic benefits than infrastructure providers. |
Enterprise Software SaaS Technology Vertical Software | |
HotelsChoice Hotels represents asset-light, high-margin hotel franchisor trading at distressed multiples due to cyclical headwinds. Company shifting portfolio toward higher-revenue segments like Extended Stay and international markets while potentially unlocking $700M in balance sheet capital for share buybacks. |
Hospitality Franchising Real Estate Travel | |
ValueManager emphasizes focus on value-oriented special situations amid market's obsession with cutting-edge technologies. Traditional value industrial exposure ironically more expensive than software holdings, creating opportunity in mispriced software names. |
Value Investing Special Situations Contrarian | |
| 2025 Q2 |
Trade PolicyThe Trump administration has implemented aggressive tariff policies with rates ranging from 20-200% across various countries and sectors. These tariffs are evolving from trade policy to countermeasures against any policy disagreements, creating substantial economic uncertainty and potential inflationary pressures. |
Tariffs Trade War Inflation Economic Policy |
Telecom InfrastructureCharter's acquisition of Cox Communications at approximately 6x EBITDA represents exceptional value in the cable sector. The deal provides significant mobile penetration opportunities across Cox's 12 million footprint and should create substantial shareholder value despite sector pessimism. |
Cable M&A Mobile Broadband Synergies | |
Regional BanksMetro Bank and PTSB represent compelling value opportunities in European banking. Metro Bank may benefit from regulatory relief through MREL exemption, while PTSB awaits density review outcomes and government stake reduction to unlock significant excess capital. |
Banking Regulatory Relief Capital Return Valuation | |
Risk AppetiteMarkets have rallied despite extreme tariff policies based on the belief that these measures will be watered down or not implemented. This disconnect between policy reality and market optimism creates potential for significant volatility if policies are fully enacted. |
Market Sentiment Policy Risk Volatility Complacency | |
| 2025 Q1 |
Trade PolicyTrump 2.0 administration imposed universal tariffs starting with 25% on Mexico and Canada, followed by Liberation Day with 10% universal tariffs and much higher reciprocal rates including 145%/125% on US/China trade. These tariff rates are the highest since the 1930s and have created massive market volatility and recession concerns. |
Tariffs Trade War China Protectionism IEEPA |
European UnionEuropean financial names started strong in 2025 but were impacted by tariff concerns. European banks are positioned to spend record amounts on dividends and buybacks, greater than before the Global Financial Crisis. The sector still trades meaningfully below historical levels despite improvements. |
European Banks Dividends Capital Return ECB Eurozone | |
IrelandIreland is well positioned with budget surpluses, unemployment under 4%, and substantial housing/infrastructure spending planned. The country faces chronic housing shortage requiring doubled home building levels. PTSB expects favorable density relief outcome and 4-5% annual loan growth through 2027. |
Housing Crisis Budget Surplus PTSB Density Relief SME Lending | |
ValueManager highlights multiple foreign domiciled names trading at bombed-out levels despite being good businesses with reasonable growth prospects. Value has traded far below growth for years, but recent tariffs could be a catalyst for capital to look outside US technology companies. |
International Value Bombed Out Mispriced Discount Opportunity | |
InflationForward inflation expectations have skyrocketed as companies cannot absorb 40-145% increases in input costs and will turn to price increases for survival. Many consumers have already anticipated these price increases, creating concerns for the Federal Reserve. |
Input Costs Price Increases Fed Concerns Consumer Expectations Cost Pass-Through | |
| 2024 Q4 |
ValueManager emphasizes owning multiple names that trade far below intrinsic value and could rise substantially while still trading at material discounts. Believes it would be a mistake to blindly abandon out-of-favor names and chase the highest priced businesses. Sees enormous value in several holdings that have been thrown out with the bathwater. |
Undervalued Intrinsic Value Discounts Out-of-favor Cheap |
Telecom InfrastructureSignificant focus on cable and telecom companies including LILAK, TIGO, Megacable, and Charter. Discussion centers on operational execution, free cash flow generation, and integration challenges in Latin American markets. TIGO has shown strong execution while LILAK has disappointed on Puerto Rico integration. |
Cable Broadband Free Cash Flow Integration LATAM | |
Capital MarketsExtensive discussion of market valuations, with US markets trading at highest valuation levels in history and most expensive for start of any new presidential administration. Notes extreme discounts in markets outside US and value stocks relative to growth. Federal Reserve policy and interest rates acting as gravity on financial assets. |
Valuations Fed Policy Interest Rates Market Discounts Shiller PE | |
BuybacksMultiple holdings discussed in context of share repurchase programs and capital allocation. TIGO started buyback program, Charter expected to return to aggressive share repurchases after 2027, and PTSB has capacity for buybacks based on excess capital levels. Manager views buybacks as value-creating when shares trade below intrinsic value. |
Share Repurchases Capital Allocation Excess Capital Value Creation Cash Return |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 18, 2026 | Fund Letters | Patrick Brennan | DCC LN | DCC plc | Energy | Energy Distribution | Bull | New York Stock Exchange | buybacks, Energy Distribution, Propane, Sum-of-parts, valuation | Login |
| Jan 18, 2026 | Fund Letters | Patrick Brennan | MTRO LN | Metro Bank Holdings plc | Financials | Diversified Banks | Bull | New York Stock Exchange | banking, capital returns, MREL, restructuring, tangible book | Login |
| Jan 18, 2026 | Fund Letters | Patrick Brennan | PTSB ID | Permanent TSB Group Holdings plc | Financials | Diversified Banks | Bull | Euronext Stock Exchange | banking, Capital, Ireland, M&A, Optionality | Login |
| Jan 18, 2026 | Fund Letters | Patrick Brennan | WBD | Warner Bros Discovery Inc. | Communication Services | Movies & Entertainment | Bull | NASDAQ | arbitrage, M&A, media, Regulatory risk, Streaming | Login |
| Jan 18, 2026 | Fund Letters | Patrick Brennan | CODI | Compass Diversified Holdings | Financials | Conglomerates | Bull | New York Stock Exchange | balance sheet, conglomerate, deleveraging, Fraud Recovery, Preferreds | Login |
| Jul 20, 2025 | Fund Letters | Brennan Asset Management | MTRO.L | Metro Bank PLC | Financials | Regional Banks | Bull | London Stock Exchange | commercial lending, contrarian, debt refinancing, high ROE, MREL, Regulatory Relief, takeover target, turnaround, UK Banking | Login |
| Jul 20, 2025 | Fund Letters | Brennan Asset Management | CHTR | Charter Communications, Inc. | Communication Services | Cable & Satellite | Bull | NASDAQ | cable, contrarian, Cost synergies, Cox Communications, cross-selling, EBITDA multiple, Liberty Broadband, M&A, Mobile Opportunity, scale | Login |
| Jul 20, 2025 | Fund Letters | Brennan Asset Management | PTSB.L | Permanent TSB Group Holdings plc | Financials | Regional Banks | Bull | London Stock Exchange | Capital Relief, Density Review, Government Privatization, Irish Banking, Liquidity Improvement, Share Buybacks, valuation discount | Login |
| Jul 20, 2025 | Fund Letters | Brennan Asset Management | CODI | Compass Diversified Holdings | Financials | Asset Management & Custody Banks | Neutral | NYSE | Accounting Scandal, deleveraging, liquidation value, Lugano, Portfolio company, preferred shares, private equity, risk management, yield | Login |
| Jul 20, 2025 | Fund Letters | Brennan Asset Management | TIGO | Millicom International Cellular S.A. | Communication Services | Wireless Telecommunication Services | Bull | NASDAQ | Cellular Towers, Colombia, duopoly, Emerging markets, Free Cash Flow, infrastructure, Latin America, M&A, Special dividend, telecommunications | Login |
| Apr 18, 2025 | Fund Letters | Brennan Asset Management | PTSB.L | Permanent TSB Group Holdings plc | Financials | Banks | Bull | London Stock Exchange | capital return, Density Relief, European financials, housing crisis, Ireland, Irish Bank, Mortgage Lender, SME Lending, turnaround, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| MTRO.L | The dollar initially strengthened when the Iran news hit and this move helped drive a pullback in some of our foreign names (particularly Metro Bank (MTRO), discussed in our Q4 letter). |
| WBD | On a happier note, the Warner Bros. Discovery, Inc. (WBD) sale drama took a turn shortly after we sent our fourth quarter letter. Netflix (NFLX) changed its offer to an all-cash bid. Paramount (PARA) then raised its all-cash bid to $31 per share and Netflix quickly dropped out of the bidding. The deal is expected to close in the third quarter of 2026, but there will undoubtedly be regulatory scrutiny. On the positive side, WBD shareholders will receive $0.25 per quarterly ticking fee until closing, starting after September 30, 2026. While the regulatory risks are real, we would anticipate both the deal closing as well as large goodwill write-downs for the combined company in the years ahead. The track record of large media deals is awful, and we see no reason why this one will be any different, especially with the staggering pro-forma debt levels (6.5-7x net leverage) and still rapidly changing media space. Luckily, we are sellers here. While there remains a spread to the $31 offer, we have and will continue to sell the name to fund higher conviction names. |
| NFLX | Netflix (NFLX) changed its offer to an all-cash bid. Paramount (PARA) then raised its all-cash bid to $31 per share and Netflix quickly dropped out of the bidding. |
| PARA | Paramount (PARA) then raised its all-cash bid to $31 per share and Netflix quickly dropped out of the bidding. |
| CODI | We increased our position in Compass Diversified Holdings (CODI) and CAB Payments (CAB), two names that caused considerable headaches over the past 12-24 months, and both have dutifully produced a good bit of drama during the first quarter. We provided a detailed update on CODI in our Q4 2025 letter, so we will not repeat all details here. That said, we purchased CODI common shares and selectively reduced our preferred position where appropriate. The preferred shares are not unattractive (~9.5% yield and a big equity slug sitting in front of them), but they have materially jumped over the past year, and upside is limited to par value (shares are approaching 90% of par value at the date of this letter). Meanwhile, the common shares became more attractive, even as CODI's share price began to rise, for a couple of reasons. First, there is more visibility on CODI's deleveraging path, particularly following the announced sale of the foodservice business of its SternoCandleLamp Holdings subsidiary for ~$293 million. More importantly, in late February 2026, ADW Capital Partners, L.P. (ADW) disclosed ~7.6% position in CODI and ultimately increased its position to ~14% in April 2026. ADW has called for a liquidation, believing total value to be ~$26. We derive a lower estimate (~$19) after considering the carry owed to CODI's external management team. That said, we do not disagree with the premise that the clearest path for creating value remains the continued sale of subsidiaries. Additionally, CODI is poised to substantially increase free cash flow, which should accelerate the company's deleveraging. |
| CAB.L | We increased our position in Compass Diversified Holdings (CODI) and CAB Payments (CAB), two names that caused considerable headaches over the past 12-24 months, and both have dutifully produced a good bit of drama during the first quarter. For a trip down memory lane, we initially purchased a smaller position in CAB following a selloff in the company's share in the months after its July 2023 IPO. We were rewarded with a 70%+ decline in a single day later in 2023 following a profit warning. While painful, we believed that the drop was a significant overreaction. CAB had no debt, had significant excess capital, and still had a difficult-to-replicate African payments network. We purchased additional shares but capped total exposure, acknowledging uncertainties around revenue visibility and the length of any turnaround, especially as a new management team seemed likely. The new team, led by CEO Neeraj Kapur, promised a more diversified revenue model, with an expanded base of customers across various currency corridors. Furthermore, CAB reduced parts of its cost base while investing in perceived growth areas, including selectively using the balance sheet for certain product offerings. The first year did not go well, as further cuts in guidance helped reverse an initial stock bounce. Unfortunately, this cut in guidance also scared away a suitor, as StoneX Group Inc. (Stone) pulled a proposed takeover at £1.45 per share in late 2024. We sold shares for tax purposes as appropriate and vowed to increase our position only if there were further signs of operational progress. That progress came early this year when CAB reported that 2025 revenue would reach £119 million, coming in well ahead of estimates. CAB also announced a new clearing partner (later disclosed as Deutsche Bank), which could greatly increase total dollar clearing, as well as a new Abu Dhabi license, both of which should expand revenue opportunities. Believing these updates to be a tangible sign of operational progress, we purchased additional shares. |
| SNEX | Unfortunately, this cut in guidance also scared away a suitor, as StoneX Group Inc. (Stone) pulled a proposed takeover at £1.45 per share in late 2024. The plot thickened when Stone returned with a takeover offer of 110 pence per share (after an initial offer of 95 pence per share), representing a roughly 30% premium over Helios' offer. While we believe StoneX's offer undervalues CAB, it is unquestionably better than Helios' offer. |
| DCC.L | During the same trip where we badgered PTSB, we found time to stop by DCC's offices for a conversation with their CFO, Conor Murphy, and DCC's IR team (see our 2025 Q4 letter for more details on the name). As noted in our last letter, DCC's core propane distribution business is highly stable and has a long growth track record across different economic and energy cycles. We spent our time exploring a couple of topics. We first asked about DCC potentially losing off-grid energy customers to heat pumps. As a quick reminder, energy products account for ~68% of earnings before interest, taxes and amortization (EBITA), Energy Services 11% of EBITA, and Mobility (gas stations) 23% of EBITA. Of the energy products business, the split between commercial/residential is 60/40 and the split of residential is 60%/40% propane/heating oil. Our questions focused on this 40% heating oil subsegment. Some off-grid energy customers who use oil or natural gas have moved to heat pumps, but this is not expected to be a large headwind, given that heat pumps often require an expensive retrofit before the pump can be deployed and this is simply unaffordable for most customers. Given the fiscal deficits in the UK/France, retrofit subsidies are unfeasible. Additionally, DCC expressed optimism that its biofuel product can serve as a viable alternative. While the biofuel is often twice as expensive as the kerosine used in many off-grid European homes, many furnaces can process the biofuel without any upgrades. If countries were going to subsidize cleaner energy conversion, DCC can make a solid argument for biofuel. |
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