| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Hurdle Rate Unit Trust declined 1.4% in September but continues to demonstrate strong long-term performance with 16.0% annualized returns since inception and low market correlation. The manager maintains focus on quality businesses with strong fundamentals, evidenced by current holdings like Asiro which trades at EV/EBIT under 7 despite maintaining 1.7 billion in net cash. Portfolio activity included divesting Sylogist and adding Netfonds, a German financial services platform with founder ownership and aggregation characteristics similar to past successful investments. Elixirr contributed positively through an accretive acquisition of TRC Advisory. The trust faces near-term headwinds from high fixed costs at current scale, with operating expenses running at 3.3% monthly, but the manager projects these will decline as assets grow. The strategy emphasizes no paid marketing, instead relying on strong gross returns to attract capital. With a track record of 28.0% annualized gross returns since 2019, the manager expresses confidence in continuing to deliver impressive results while maintaining tax efficiency for unitholders.
Focus on quality businesses trading at attractive valuations with strong fundamentals, cash generation, and platform characteristics that can compound returns over time.
The manager expresses confidence in continuing to deliver impressive gross returns on equity, with a medium-term ambition to grow the trust to reduce operating costs below 1% of net asset value through performance and net inflows.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Oct 29 2025 | 2025 Q3 | NFD.DE | Australia, Germany, Performance, Quality, small caps, value | ELIX LN | Small Australian fund delivering 16% net returns since inception through quality stock selection. Recent weakness from Asiro holding offset by strong performance elsewhere. Manager replacing positions strategically, adding German platform Netfonds. High fixed costs currently drag performance but should improve with scale. Strong long-term track record with low market correlation suggests sustainable alpha generation capability. |
| Jul 30 2025 | 2025 Q2 | ALS.TO, BRVO.V, ELE.V, KLD.V, KRY.V, LRA.V, RDG.V, SME.V, STRR.V | Brazil, Canada, Copper, Development, Exploration, gold, Mining, royalties |
DSW LN ELIX LN CAF AU 9928 JP FSA AU SEQ AU |
MJG Capital delivered 35.77% first-half returns as natural resources positioned for outperformance amid unsustainable US equity market concentration. Portfolio benefits from copper exposure, PGM price recovery, and crypto capital entering mining via Tether's Elemental Altus investment. Manager maintains disciplined bottom-up approach targeting quality management teams and assets, expecting continued alpha generation as investment capital rotates toward neglected sectors. |
| Apr 4 2025 | 2025 Q1 | BEG LN, COG AU, DSW LN, LIT LN, SYZ CN, UPG BB | - | - | |
| Jan 31 2025 | 2024 Q4 | AVT.T, BVS.AX, FNX.AX, ORCH.L, PBEE.L, PPE.AX, SWF.AX | active management, global, small caps, software, Specialty Finance, value | - | Hurdle Rate delivered 21.6% returns in 2024 through concentrated value investing in global small-caps. Manager Waine focuses on absolute returns over market-relative performance, maintaining high portfolio turnover to capitalize on mispriced securities. Key holdings span software, specialty finance, and Australian businesses trading below intrinsic value, targeting 20% compound annual returns despite elevated market valuations. |
| Apr 15 2024 | 2024 Q1 | 7378.T, AFL.AX, ARC.AX, FNX.AX, GETB.L, ORCH.L, PBEE.L | Australia, Concentration, Professional Services, small caps, United Kingdom, value |
PBEE.L FNX.AX AFL.AX ORCH.L GETB.L 7378.T |
Hurdle Rate delivered 7.6% in Q1 through concentrated small-cap investing in professional services. Manager added Pensionbee on US expansion, exited Finexia on management concerns, and opportunistically bought Orchard Funding post-fraud selloff. Portfolio rebalancing continues toward 10-20 position concentration targeting 20% annual post-tax returns through specialized expertise in accounting and advisory sectors. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q3 |
QualityThe manager focuses on quality businesses with strong fundamentals, evidenced by investments in companies with solid cash positions and reasonable valuations. Asiro maintains 1.7 billion in net cash despite recent weakness, while Netfonds exhibits traits similar to past successful investments including platform aggregation and growing owned-product mix. |
Cash Generation Fundamentals Platform Aggregation Profitability |
| 2025 Q2 |
CopperCopper remains the highest weighting by metal at 35% of the portfolio across six holdings. Each copper-focused investment presents opportunity for share price appreciation through drilling, permitting success, or M&A activity without reliance on further copper price increases. |
Copper Mining Development Permitting M&A |
GoldGold comprises 23% of portfolio allocation. The manager notes that approximately 70% of MSCI World Index is now weighted to US equities, similar to the 1960s Nifty Fifty period, suggesting potential rotation into neglected asset classes like gold. |
Gold Royalties Mining Precious Metals | |
CryptoTether's acquisition of controlling stake in Elemental Altus marks the first occasion that crypto capital has found its way into the mining sector in any significant manner. This could herald broader non-traditional mining capital entering the sector. |
Crypto Tether Mining Capital | |
Platinum Group MetalsPalladium and platinum comprise approximately 75% of the value of Bravo's Luanga deposit. Palladium is up 25% in 2025 while platinum has appreciated 55%, recently exceeding $1400 per ounce for the first time since late 2014. |
Platinum Palladium PGM Mining | |
Junior MinersThe partnership focuses on backing talented, ethical, and well-incentivized teams focused on assets that provide enough scale to matter at reasonable valuations. This bottom-up, people-first approach to security selection has generated alpha in both poor and neutral market environments. |
Junior Miners Exploration Development Management | |
| 2024 Q4 |
ValueManager focuses on purchasing securities at attractive valuations, often trading below book value or at low earnings multiples. Multiple investments were made based on companies trading at significant discounts to intrinsic value, such as Orchard Funding at 0.5 times tangible book value despite 9% average ROE. |
Value Discount Book Value Earnings Multiple Intrinsic Value |
SoftwareSignificant exposure to software companies across different geographies including Hungarian accounting software Kulcs-Soft, Japanese consolidated accounting software Avant Group, and UK pension software PensionBee. These companies often have recurring revenue models and strong market positions in their respective niches. |
Software SaaS Accounting Enterprise Software Recurring Revenue | |
Specialty FinanceMultiple investments in specialized lending businesses including Orchard Funding Group's instalment plans for insurance and fees, and Finexia's alternative investment solutions. These companies operate in niche markets with specific expertise and often generate attractive net interest margins. |
Specialty Finance Lending Alternative Finance Net Interest Margin Niche Markets | |
| 2024 Q1 |
Small CapsThe fund focuses on smaller companies with less sophisticated shareholders, leveraging the manager's advantage in professional and financial services. The portfolio targets 10-20 companies with a specialised game selection approach to limit competition. |
Microcaps Concentration Specialization Competition Sophistication |
Professional ServicesThe manager leverages experience in accounting and advice industries by investing in professional and financial services firms and their stakeholders including service providers, software, staffing, and education. AF Legal acquisition demonstrates this focus on complementary legal services. |
Legal Services Accounting Advisory Specialization Expertise |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 29, 2025 | Fund Letters | Tristan Waine | ELIX LN | Elixirr International plc | Industrials | Consulting Services | Bull | NYSE | acquisition, Consulting, Eps accretion, expansion, growth, Margins, valuation | Login |
| Jul 30, 2025 | Fund Letters | Tristan Waine | CAF AU | Centrepoint Alliance Limited | Financials | Capital Markets | Bull | New York Stock Exchange | Advice, consolidation, Margins, platform, Regulation, Scalability, Wealth | Login |
| Jul 30, 2025 | Fund Letters | Tristan Waine | 9928 JP | Miroku Jyoho Service Co., Ltd. | Information Technology | Application Software | Bull | New York Stock Exchange | cash, compounding, Japan, SMEs, Software, Stickiness, Subscription | Login |
| Jul 30, 2025 | Fund Letters | Tristan Waine | FSA AU | FSA Group Limited | Financials | Consumer Finance | Bull | New York Stock Exchange | cashflow, consumer, Counter-cyclical, Finance, founder-led, Insolvency, underwriting | Login |
| Jul 30, 2025 | Fund Letters | Tristan Waine | SEQ AU | Sequoia Financial Group Limited | Financials | Capital Markets | Bear | New York Stock Exchange | exit, Governance, Integration, Margins, platform, Volatility, Wealth | Login |
| Jul 30, 2025 | Fund Letters | Tristan Waine | DSW LN | DSW Capital plc | Industrials | Professional Services | Bull | New York Stock Exchange | asset-light, cashflow, Franchising, growth, Margins, Professional, services, small-cap | Login |
| Jul 30, 2025 | Fund Letters | Tristan Waine | ELIX LN | Elixirr International plc | Industrials | Professional Services | Bull | New York Stock Exchange | Acquisitions, cashflow, Consulting, growth, Margins, Re-rating, services | Login |
| Mar 31, 2024 | Fund Letters | Hurdle Rate | ORCH.L | Orchard Funding Group plc | Financials | Consumer Finance | Bull | London Stock Exchange | Bridging Loans, Fraud Provision, Property Finance, specialist lending, Take-private Risk, UK, Value | Login |
| Mar 31, 2024 | Fund Letters | Hurdle Rate | PBEE.L | PensionBee Group plc | Financials | Asset Management & Custody Banks | Bull | London Stock Exchange | digital platform, financial technology, Geographic Expansion, growth, Pension Management, US Expansion | Login |
| Mar 31, 2024 | Fund Letters | Hurdle Rate | 7378.T | ASIRO Co., Ltd. | Information Technology | IT Services | Bull | Tokyo Stock Exchange | capital allocation, growth, IT services, Japan, Revenue Growth, System Integration | Login |
| Mar 31, 2024 | Fund Letters | Hurdle Rate | GETB.L | GetBusy plc | Information Technology | Application Software | Neutral | London Stock Exchange | Accounting Software, ARPU, Churn, Document management, R&D Tax Credits, SaaS, UK | Login |
| Mar 31, 2024 | Fund Letters | Hurdle Rate | FNX.AX | Finexia Financial Group Limited | Financials | Asset Management & Custody Banks | Bear | Australian Securities Exchange | asset management, Australia, Distribution, Management Quality, Private Credit, turnaround | Login |
| Mar 31, 2024 | Fund Letters | Hurdle Rate | AFL.AX | AF Legal Group Limited | Consumer Discretionary | Specialized Consumer Services | Bull | Australian Securities Exchange | acquisition, Australia, Contested Wills, Family Law, Legal Services, Value, working capital | Login |
| TICKER | COMMENTARY |
|---|---|
| NFD.DE | Due to reasons discussed last month, I decided to divest Sylogist which has been replaced with Netfonds, one of Germany's largest platforms for the distribution of financial services. The founder owned (~50%) and led business which started in 1999 exhibits traits of our past investments, such as an aggregation platform similar to COG Financial Services, a 'liability umbrella' service akin to licensees, and a growing proportion of the business in owned-products including SMAs which are driving a business-mix shift in profitability. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
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| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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