| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 22.0% | 8.9% | 17.5% |
Kingdom Capital delivered 17.45% net returns in 2025 despite severe challenges including a bankruptcy, major customer losses, and cyber-attacks, validating their microcap value thesis. The concentrated, research-intensive approach generated 8.88% in Q4 versus 2.19% for the Russell 2000, with 21.99% annualized returns since inception versus 4.87% for the benchmark. Key contributors included NVRI's $3B Clean Earth sale and turnaround stories like MAGN and WW showing recovery. The manager demonstrated active risk management by quickly exiting Superior Industries and doubling down on UNFI after understanding the cyber-attack scope. Looking ahead, 40% of capital is allocated to special situations with 12-month catalysts including property liquidations at NLOP and AIV, while 60% targets undervalued businesses like UNFI trading below 4x EV/EBITDA. The portfolio trades at conservative multiples with strong free cash flow generation, positioning for compelling risk/reward as valuation gaps close and management teams unlock value regardless of macro conditions.
Patient capital invested in overlooked microcap companies generates exceptional returns through exploiting market inefficiencies rather than avoiding volatility.
The manager enters 2026 with high conviction across the concentrated portfolio, expecting compelling risk/reward regardless of macro conditions. Special situations should provide substantial capital returns in H1 2026, while value positions are expected to benefit from valuation gap closure and management value creation initiatives.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 7 2026 | 2025 Q4 | AIV, AKA, CRSXF, HRBR, MAGN, NLOP, NVRI, SUP, TSSI, UNFI, WW | concentrated, Liquidations, Microcap, special situations, Turnarounds, value | - | Kingdom Capital focuses on overlooked microcap companies trading at significant discounts to intrinsic value. The portfolio includes businesses like UNFI trading below 4x EV/EBITDA and… |
| Oct 9 2025 | 2025 Q3 | AIV, AKA, FGF, GCO, HRBR, MAGN, NLOP, UNFI, UNTC, VNTRF, WW | cash flow, special situations, tariffs, turnaround, Value Investing |
UNFI US AIV US GCO US WW US MAGN US AKA US |
Kingdom Capital achieved a strong rebound, emphasizing disciplined research in overlooked and mispriced U.S. equities. The fund blends special situations and traditional value holdings, such… |
| Jul 14 2025 | 2025 Q2 | - | Concentration, fundamentals, Microcaps, outcome dispersion, volatility |
AKA UNFI MAGN NLOP |
The letter highlights microcap investing as a high-dispersion opportunity set capable of generating outsized returns. Management accepts elevated volatility and drawdowns as the cost of… |
| Apr 14 2025 | 2025 Q1 | AKA, MAGN, NLOP, UNFI, UNTC | - | - | - |
| Jan 21 2025 | 2024 Q4 | ENZ, GLXZ, HCC, MAGN, NLOP, SUP | - | - | - |
| Oct 8 2024 | 2024 Q3 | ECRO, GLXZ, HCC, NLOP, RRGB, SCOR, UNFI | - | - | - |
| Oct 7 2022 | 2024 Q2 | NLOP, SUP | - | - | - |
| Apr 26 2024 | 2024 Q1 | EVC | - | - | - |
| May 1 2024 | 2023 Q4 | NLOP | - | - | - |
| Apr 10 2023 | 2023 Q3 | ABL, CKX, CSO CN, HCC, SENEA | - | - | - |
| Jul 24 2023 | 2023 Q2 | AMRK, PLCE, SUP | - | - | - |
| Apr 11 2023 | 2023 Q1 | AMRK, ARCH, PDER, UNTC | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Resilience2025 tested the fund's thesis severely with a bankruptcy, major customer losses, and cyber-attacks, yet delivered 17.45% net returns. The manager emphasizes that edge comes from exploiting inefficiency rather than avoiding adversity, demonstrating portfolio resilience through active management. |
Adversity Active Management Drawdowns Volatility |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
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 |
Discipline |
|
Special SituationsPortfolio heavily focused on merger arbitrage, sales processes, and corporate actions including Golden Entertainment PropCo OpCo split, Sotherly Hotels buyout with preferred conversion arbitrage, and Mount Logan Capital tender offer. |
Merger Arbitrage Sales Process Tender Offer Corporate Actions Conversion | |
Turnaround |
||
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 |
MicroCaps |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 14, 2025 | Fund Letters | David Bastian | NLOP | Net Lease Office Properties | Real Estate | Office REITs | Bull | New York Stock Exchange | Assetsales, buybacks, Caprate, Offices, REIT | Login |
| Oct 9, 2025 | Fund Letters | David Bastian | UNFI US | United Natural Foods, Inc. | Consumer Staples | Food Distributors | Bull | NYSE | cash flow, deleveraging, food distribution, Margins, recovery, resilience, valuation | Login |
| Oct 9, 2025 | Fund Letters | David Bastian | AIV US | Apartment Investment and Management Co. | Real Estate | Residential REIT | Bull | NYSE | asset sales, dividends, Liquidation, NAV, Real Estate, recovery, REIT, Value | Login |
| Oct 9, 2025 | Fund Letters | David Bastian | GCO US | Genesco Inc. | Consumer Discretionary | Apparel Retail | Bull | NYSE | Apparel, cash flow, growth, recovery, retail, turnaround, valuation | Login |
| Oct 9, 2025 | Fund Letters | David Bastian | WW US | WW International, Inc. | Consumer Discretionary | Personal Products | Bull | NASDAQ | GLP-1, growth, healthcare, Partnerships, restructuring, Weight loss, Wellness | Login |
| Oct 9, 2025 | Fund Letters | David Bastian | MAGN US | Magnera Corp. | Materials | Metals & Mining | Bull | NYSE | energy, Industrials, Margins, Metals, recovery, restructuring, tariffs | Login |
| Oct 9, 2025 | Fund Letters | David Bastian | AKA US | a.k.a. Brands Holding Corp. | Consumer Discretionary | Apparel Retail | Bull | NYSE | Alignment, fashion, growth, Margins, retail, tariffs, valuation | Login |
| Jul 14, 2025 | Fund Letters | David Bastian | AKA | a.k.a. Brands Holding Corp. | Consumer Discretionary | Apparel Retail | Bull | New York Stock Exchange | ecommerce, fashion, Margins, Sourcing, tariffs | Login |
| Jul 14, 2025 | Fund Letters | David Bastian | UNFI | United Natural Foods, Inc. | Consumer Staples | Food Distributors | Bull | New York Stock Exchange | cybersecurity, Distribution, guidance, Margins, turnaround | Login |
| Jul 14, 2025 | Fund Letters | David Bastian | MAGN | Magnera Corporation | Materials | Specialty Chemicals | Bull | New York Stock Exchange | Cyclicality, earnings, Insiders, materials, tariffs | Login |
| TICKER | COMMENTARY |
|---|---|
| AIV | AIV sold the majority of their remaining stabilized apartments and closed their key Brickell sale in December. We expect dividends in FY26 to fully cover our cost basis on both names. NLOP and AIV expect to return substantial capital to shareholders as property sales finalize. We anticipate receiving dividends equal to or exceeding our entire cost basis in both positions during H1 2026. |
| AKA | AKA is ramping sales while successfully diversifying supply chain away from China, despite some inventory issues in Q3. Management incentives align at $100+ stock price (currently $11). |
| CRSXF | Corsa Coal declared bankruptcy during the first week of January, resulting in a complete loss. |
| HRBR | We noted last quarter our residual position in Harbor Diversified (HRBR), which doubled in Q4 on concrete news about their plan to sell their remaining assets for over $100m. Even after doubling, the stock continues to trade near half of our estimate of their current liquidation value. |
| MAGN | After being year-to-date detractors, Magnera (MAGN) and WeightWatchers (WW) both contributed positively to our fourth quarter returns. Both companies reported earnings roughly in-line with our expectations, and the result was a 'relief rally' of sorts in their shares. While both were overall detractors in 2025, we maintain a constructive view which we expect will be validated in 2026. MAGN/WW are positioned for margin recovery as operational improvements flow through to earnings. |
| NLOP | Net Lease Office Properties, our largest portfolio position, advanced their liquidation plan and yet the stock had minimal price appreciation in 2025. NLOP and AIV continued to sell properties and move toward full liquidation. NLOP has now declared $12.30 of dividends per share in 2025 and should be able to return another $10/share in early 2026 once pending sales close. We expect dividends in FY26 to fully cover our cost basis on both names. NLOP and AIV expect to return substantial capital to shareholders as property sales finalize. We anticipate receiving dividends equal to or exceeding our entire cost basis in both positions during H1 2026. |
| NVRI | NVRI telegraphed, then delivered, a $3B sale of Clean Earth, exceeding their entire enterprise value. We profited from this trade by owning both common stock and short-dated call options, enhancing our returns. NVRI's Clean Earth sale (expected H1-26) should result in a tax-efficient return of capital distribution. |
| SUP | Superior Industries lost two key customers in May which accounted for nearly 35% of their total revenue and essentially sent the stock price to zero. We completely exited the Superior Industries position in pre-market trading the morning they announced their customer loss – realizing a 67% loss vs. the eventual 97% loss. |
| TSSI | I was short what I think are low quality names that have benefited from a huge Capex run up in datacenters but offer services that will get commoditized and are trading on very high earnings multiples on top of really above historical margins (TSSI STRL CLS ORCL VRT TGEN). |
| UNFI | We also had gains in United Natural Foods Inc. (UNFI), as strong results allayed investor concerns about the impact of a summer cyber-attack and allowed the market to refocus on the company's turnaround. As I mentioned in the H1 2025 letter, we took advantage of UNFI's share price decline due to this cyber-attack to add back shares we had sold earlier in 2025 at higher prices. |
| WW | After being year-to-date detractors, Magnera (MAGN) and WeightWatchers (WW) both contributed positively to our fourth quarter returns. Both companies reported earnings roughly in-line with our expectations, and the result was a 'relief rally' of sorts in their shares. While both were overall detractors in 2025, we maintain a constructive view which we expect will be validated in 2026. MAGN/WW are positioned for margin recovery as operational improvements flow through to earnings. |
| 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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