Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.5% | - | 16.4% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 16.4% | 22.7% | -2.6% | -2.3% | 8.8% | 17.7% |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.5% | - | 16.4% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 16.4% | 22.7% | -2.6% | -2.3% | 8.8% | 17.7% |
Kernow Asset Management delivered 4.0% in December, bringing 2025 gains to 16.4% through contrarian value investing in UK equities. The strategy focuses on asymmetric opportunities where companies trade below intrinsic value. Key positions include Secure Trust Bank, trading at half book value after selling a division at premium, with new lending strategy announcement expected. Banking exposure extends to Metro Bank Holdings and CMC Markets. Despite oil dropping 20% amid supply glut, the fund maintains contrarian energy positioning through Kistos, which doubled production via Middle East acquisition. The manager successfully shorted Fermi, an AI data centre IPO, capturing 70% decline as euphoria peaked. Card Factory disappointed with profit warning on weak footfall. The portfolio demonstrates classic value discipline, buying £1 for 50p opportunities while avoiding overvalued sectors. With 139% gross exposure across long and short positions, the strategy targets mispriced securities where consensus views create opportunity. Since inception, the fund has delivered 87.9% cumulative returns versus 64% for UK equity markets.
Kernow Asset Management pursues contrarian value investing in mispriced UK equities, buying companies trading below intrinsic value while shorting overvalued opportunities, with particular focus on banking, energy, and special situations where asymmetric risk-reward profiles exist.
The manager maintains a contrarian stance, viewing current market conditions as creating opportunities. Oil sector positioning despite supply glut concerns reflects confidence in contrarian value approach. Banking exposure through Secure Trust Bank and Metro Bank represents conviction in undervalued UK financials. The next year will clarify whether retail challenges are temporary or structural.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 12 2026 | 2025 Q4 | CARD.L, CMCX.L, KIST.L, MTRO.L, SAGA.L, SMWH.L, STB.L, WISE.L | Banking, contrarian, Data centers, Long/Short, oil, Uk, value |
STB LN KIST LN CARD LN FRMI LN MICC LN |
The fund demonstrates classic value investing principles, buying companies trading below book value. Secure Trust Bank trades at half its book value, effectively allowing investors… |
| Oct 7 2025 | 2025 Q3 | - | contrarian, energy, financials, UK Equities, Value Investing |
SAGA LN WISE LN DRX LN |
Kernow Asset Management benefited from strong performance in UK cyclicals such as Saga and Kistos, highlighting opportunities in undervalued energy and financial companies. The team… |
| Sep 10 2025 | 2025 Q2 | MTRO LN, SMWH LN | asymmetry, contrarian, Idiosyncratic, Long/Short, valuation |
SMWH LN MTRO LN STB LN |
The letter emphasizes contrarian long-short investing in UK equities, exploiting asymmetric opportunities where consensus views are wrong. Management highlights both longs and shorts driven by… |
| Apr 18 2025 | 2025 Q1 | - | - | - | - |
| Jan 8 2025 | 2024 Q4 | WISE LN | - | - | - |
| Oct 30 2024 | 2024 Q3 | - | - | - | - |
| Aug 31 2024 | 2024 Q2 | - | - | - | - |
| Apr 30 2024 | 2024 Q1 | - | - | - | - |
| Sep 30 2023 | 2023 Q3 | MCB, VID LN | - | - | - |
| Jul 7 2023 | 2023 Q2 | - | - | - | - |
| Mar 31 2023 | 2023 Q1 | - | - | - | - |
| Mar 2 2023 | 2022 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
BankingEuropean banking sector produced strong outperformance led by Bank of Ireland, Lloyds Banking Group, and CaixaBank. Sector returns supported by interest rate stabilization and yield curve steepening. The market is transitioning toward improving organic loan growth after fifteen years of stagnant credit activity. |
Regional Banks Money Center Banks European Banks |
Data CentersSupply constraints curtailing infrastructure buildout rate, but compute capacity is being used immediately upon coming online. This differs from dot-com bubble when dark fiber was installed ahead of need. Labor, power and land shortages creating bottlenecks. |
Supply Constraints Utilization Bottlenecks Infrastructure | |
OilOil markets disrupted by closure of Straits of Hormuz affecting 20% of global production. Prices surged from $70 to $119.50 before retreating to $90. Market may be tighter than commonly believed despite IEA projections of surplus. Oil represents cheapest major asset class globally, trading at near-record lows relative to gold. |
Crude Brent WTI Hormuz Supply | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
Contrarian |
|
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure | |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations | |
UK |
||
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic | |
| 2025 Q2 |
Contrarian |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 7, 2025 | Fund Letters | Alyx Wood | SAGA LN | Saga plc | Financials | Travel & Leisure | Bull | NYSE | cash flow, Demographics, growth, Insurance, Travel, turnaround, UK, valuation | Login |
| Oct 7, 2025 | Fund Letters | Alyx Wood | WISE LN | Wise plc | Other | Financial Technology | Bull | NYSE | expansion, Fintech, growth, Payments, profitability, Scalability, UK, valuation | Login |
| Oct 7, 2025 | Fund Letters | Alyx Wood | DRX LN | Drax Group plc | Utilities | Renewable Electricity | Bull | NYSE | energy, growth, Policy, Power, renewables, Transition, UK, valuation | Login |
| Sep 10, 2025 | Fund Letters | Alyx Wood | SMWH LN | WH Smith PLC | Consumer Discretionary | Specialty Stores | Bear | London Stock Exchange | Accounting Errors, high debt, Low Moat, retail, Short | Login |
| Sep 10, 2025 | Fund Letters | Alyx Wood | MTRO LN | Metro Bank Holdings PLC | Financials | Regional Banks | Bull | London Stock Exchange | Bank, MREL, regulatory capital, turnaround, undervalued | Login |
| Sep 10, 2025 | Fund Letters | Alyx Wood | STB LN | Secure Trust Bank PLC | Financials | Regional Banks | Bull | London Stock Exchange | Capitalized, Car Finance, Provisions, Regulatory risk, Value | Login |
| Jan 12, 2026 | Fund Letters | Alyx Wood | STB LN | Secure Trust Bank PLC | Financials | Specialty Finance | Bull | New York Stock Exchange | Bookvalue, Capital, Insiderbuying, Lending, rerating | Login |
| Jan 12, 2026 | Fund Letters | Alyx Wood | KIST LN | Kistos plc | Energy | Oil & Gas Exploration & Production | Bull | New York Stock Exchange | acquisition, contrarian, Oilprice, Production, valuation | Login |
| Jan 12, 2026 | Fund Letters | Alyx Wood | CARD LN | Card Factory plc | Consumer Discretionary | Specialty Retail | Neutral | New York Stock Exchange | Competition, Footfall, Profits, retail, uncertainty | Login |
| Jan 12, 2026 | Fund Letters | Alyx Wood | FRMI LN | Fermi plc | Information Technology | Data Center Infrastructure | Neutral | New York Stock Exchange | AI, CapEx, datacenters, Hype, Shortselling | Login |
| Jan 12, 2026 | Fund Letters | Alyx Wood | MICC LN | Magnum Ice Cream Company | Consumer Staples | Food Products | Bull | New York Stock Exchange | brands, Distribution, Margins, turnaround, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| CARD.L | Card Factory, after a harsh profit warning blamed on weaker high street footfall. What's less clear is whether this signals a tough retail environment or something more troubling in the company's competitive position. For now, we've let sleeping dogs lie. The next year should make it clear whether the dog's just napping or quietly chewing through the furniture. |
| KIST.L | Kistos sent him a gift way better than cake. It doubled its oil and gas production and resources. It pulled this off through an acquisition in the Middle East. And oh man, it was a good deal. Non-dilutive to shareholders, funded entirely with existing resources. Frankly, given the near-term catalysts, this share is the most mispriced stock in our portfolio. |
| MTRO.L | Metro Bank reported continued progress on its transformation into a commercial and specialty mortgage focused bank, reiterated its annual/long-term guidance and noted that it expected to exit the MREL regime. £525 million of 12% senior bonds (~£63 million annualized interest cost) will soon be called and not replaced. MTRO's 2027 guidance calls for mid-to-high teen returns on tangible equity and this guidance looked achievable prior to the MREL exit. We believe the bank might be able to commence capital returns in the back half of this year. MTRO currently trades at ~75% of tangible book value. We think the bank could conceivably have earnings potential of ~0.40 per share by 2028 or ~3x current prices. |
| STB.L | Secure Trust Bank, gave us a fright. The announcement? A major division sold for £459m. At a premium to book value… wait… that's not bad news. That's excellent news. The whole company is trading at half its book value. Investors are effectively buying £1 for 50p. We scrambled to buy more but missed the bell. This working capital boost will put the company in a much better position to exploit its new lending strategy, earmarked to be officially announced at the Capital Markets Day in a couple of months. The cherry on top? The CEO has been buying shares in the open market. Not options. No freebies. Real money. His own. That's as strong a signal as it gets. |
| WISE.L | Wise is the most asymmetric investment in our portfolio today and illustrates the idea of bounded downside and long-run upside in practice. Wise helps consumers and businesses hold and move money across borders, taking market share from the legacy correspondent banking model through infrastructure that is cheaper, faster, and more transparent. |
| 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 | |||