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 |
|---|---|---|---|---|---|---|
The Forager International Shares Fund returned negative 5.7% for the year ending June 2026, significantly underperforming its benchmark as the AI bubble inflated to extreme levels exemplified by SpaceX's US$2 trillion IPO valuation. The manager deliberately avoided participating in the AI mania, instead selling what little exposure the fund had as valuations became unsustainable. The largest detractor was Fiserv, a 3.9% loss reflecting a process mistake where the manager held on despite deteriorating fundamentals and management instability. Japanese software holdings also suffered as global AI fears drove indiscriminate selling despite strong operating performance and improving corporate governance. Winners included Marex Group, ING Groep, and Linamar Corporation, all benefiting from specific operational catalysts. The manager draws parallels to the 2000 dot-com crash, noting today's hysteria is isolated to AI while other areas offer attractive valuations. The portfolio has been actively repositioned, clearing out fully valued winners and mistakes to concentrate in mispriced opportunities including Japanese software, European banks, and other cash-generative value stocks. The manager expects continued short-term underperformance but is positioned to profit when the bubble bursts.
The current AI boom has evolved into a genuine bubble comparable to history's great manias, driven by transformative technology but facing inevitable collision with economic reality around capital intensity, efficiency, and returns. The manager is positioned as far away from the euphoria as possible, instead concentrating in sensible, cash-generative businesses trading at attractive valuations that have been starved of attention, particularly Japanese software companies and European banks, expecting strong relative and absolute returns when the bubble bursts.
The manager expects continued underperformance as long as the AI bubble continues to inflate, but is positioned to deliver strong relative and potentially absolute returns when the bubble bursts. The extreme dispersion and momentum-driven market shifts have created a fertile hunting ground, with the fund entering the new financial year concentrated in areas of significant mispricing including Japanese software, European banks, and other value opportunities ignored by the market.
As of Jul 15, 2026
Founded in 2009 by Steve Johnson as Intelligent Investor Funds and rebranded to Forager Funds Management in 2014, this boutique Australian investment firm is privately owned with significant staff ownership, ensuring alignment through co-investment where management invests their own money alongside investors. Steve Johnson serves as Chief Investment Officer and founder, holding a Bachelor of Commerce from the University of New South Wales. The experienced investment team includes co-portfolio managers Gareth Brown, who has been with the firm since the fund's 2013 launch, and Harvey Migotti, along with Portfolio Manager Alex Shevelev and Senior Analyst Chloe Stokes. The firm manages approximately $470-475 million for over 2,000 long-term investors and emphasizes targeting investors who share their long-term, opportunistic outlook rather than simply increasing investor numbers.
Forager's investment philosophy centers on generating meaningful long-term returns from investments in unloved, under-researched and undervalued stocks. The fund employs a concentrated strategy of 20-40 underappreciated global stocks anticipated to outperform global equities over rolling 5-year periods. The approach focuses on blending small and mid cap ideas with larger more resilient businesses, predominantly investing in developed countries with stable political environments including the US, UK, Europe and Asia. The strategy emphasizes seizing opportunity in unpopular places while maintaining caution and discipline in stock selection.
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
The fund holds a concentrated portfolio of 20-40 positions with top 5 holdings representing 24.7% of NAV and specific position sizing disclosed (Cuscal 7.2%, Catapult 6.4%). The manager makes clear, falsifiable statements about the AI bubble bursting and specific thesis elements for holdings like ING Groep, Linamar, and Japanese software companies. The letter demonstrates willingness to hold through volatility in Japanese software and explicitly states positions like Nutex remain meaningful investments despite volatility. However, some hedging language exists around timing and the manager acknowledges mistakes like Fiserv, preventing a score above 0.75. The explanation and score are consistent with a concentrated, thesis-driven approach with clear conviction but not extreme concentration.
Growth Outlook
The manager acknowledges significant market challenges including AI disruption fears, geopolitical tensions, and economic slowdown, but frames these as creating opportunities. The outlook is cautiously constructive, viewing current pessimism as potentially overdone.
Risk Appetite
The fund is actively deploying cash from high levels (20%) into beaten-down opportunities, demonstrating moderate risk appetite. However, the deployment is selective and focused on quality businesses with defensive characteristics rather than aggressive risk-taking.
Capital Deployment
The letter describes clearing out a significant portion of the portfolio by banking profits from fully valued winners like Comfort Systems, Zegona, and Macmahon, and exiting mistakes like Fiserv. This suggests net harvesting activity. However, the manager also states using share price falls to increase investments in Japanese software businesses and describes being very active in repositioning toward mispriced opportunities. Cash ended at 6.3% with no prior period comparison provided. The net activity appears to be rotation with modest de-risking rather than aggressive deployment or defensive positioning, scoring slightly negative given the emphasis on clearing out positions.
Forward Guidance
The manager expresses readiness to continue deploying capital into attractive opportunities as they arise, with specific framework for software investments. The bias is toward selective deployment rather than aggressive scaling, with confidence dependent on lower prices and improved shareholder returns.
Language Signal
The letter is dominated by bubble, mania, FOMO, and risk language around AI, with extensive discussion of mistakes like Fiserv and detractors. Bearish framing includes warnings about trillions being poured into AI crashing into economic realities and comparisons to historical bubbles. This is partially offset by bullish language around specific opportunities in Japanese software, European banks, and value stocks described as sensible, cash-generative, and attractively priced. The net balance tilts negative given the prominence of bubble warnings and risk discussion.
Perceived Risk
The manager identifies multiple significant risks including AI disruption to software businesses, geopolitical tensions affecting oil markets, broad market selloffs from passive flows, and economic growth concerns. These risks are discussed in detail with specific examples and potential impacts, indicating high perceived environmental risk.
Opportunity Density
The manager explicitly describes finding an abundance of sensible, cash-generative businesses and states the extreme dispersion has set up a fertile hunting ground. Specific opportunities are identified across multiple geographies including Japanese software, European banks, US building materials, and UK markets. The letter describes plenty of places to hide from the exuberance and islands of value the momentum crowd has simply ignored. This represents a rich, broad opportunity set across sectors and geographies, though not quite at the 0.80+ level that would suggest opportunities everywhere with no selectivity required.
Time Horizon
The manager explicitly states being comfortable being unfashionable in the short term and expecting both funds to continue underperformance as long as the bubble goes on, demonstrating willingness to wait for thesis realization. The letter describes multi-year holdings like ING Groep acquired almost three years ago and Japanese software positions being increased during weakness with expectation of three-year earnings multiples. However, some positions like Marex and Comfort Systems were traded tactically within 12-18 months, and the manager discusses trimming positions as valuations expand. This represents a multi-year thesis with patience to hold through volatility but not the decade-plus permanent capital horizon that would warrant 0.85+.
Top Conviction Themes
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