The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 12, 2026
During the third quarter of 2026, global equity markets exhibited divergence as large-cap indices advanced modestly while small caps declined significantly amid a sharp shift in the interest rate backdrop. The Federal Reserve raised policy rates by 25 basis points to 3.75-4.00%, pushing the 10-year Treasury yield above 5% alongside rising oil prices and a widening federal deficit. Net fund performance figures were not explicitly disclosed in the letter; however, benchmark benchmarks showed the S&P 500 and MSCI World advancing 2.30% and 1.88%, respectively, while the Russell 2000 dropped 7.23% due to high floating-rate debt exposure. The macroeconomic narrative is dominated by extreme investor sentiment and narrow concentration in artificial intelligence. Sentiment indicators have reached rare extremes seen only prior to major historical bear markets in 2000 and 2008, while AI-linked infrastructure and hyperscaler spending account for an unprecedented share of headline GDP and earnings growth. The manager emphasizes that outside of tech and wealth-effect consumption, the underlying economy contracted by 0.7% year-over-year, creating systemic vulnerability. In response to excessive crowd optimism in AI infrastructure beneficiaries and indiscriminate selling in companies labeled as AI disruption victims, the portfolio leaned into mispriced quality compounders. Management built positions into weakness across Jack Henry & Associates, CDW Corp., and RELX PLC, arguing that resilient switching costs, proprietary data moats, and operational integration will allow these franchises to capture AI-driven efficiencies and re-rate as narrative fears abate.
Exploit contrarian market dislocations by acquiring high-quality, mission-critical franchises trading at historically wide valuation discounts due to indiscriminate AI disruption fears.
Management anticipates that the extraordinary compounding rates of global stock indices will not be sustained given stretched valuations and extreme sentiment readings. With underlying US economic activity outside AI contracting and interest rates remaining restrictive, the market is poised for return deviations. The firm expects valuation gaps to narrow over time as investors differentiate between true technological disruption casualties and durable franchises embedding AI to drive operational efficiencies.
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