Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.9% | 2.6% | - |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 9.8% | 29.0% | 36.9% | -21.1% | 41.1% | 3.8% |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.9% | 2.6% | - |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 9.8% | 29.0% | 36.9% | -21.1% | 41.1% | 3.8% |
L1 Capital International delivered a 2.2% return in Q4 2025 and 9.8% for the full year, underperforming the MSCI World benchmark due to concentrated market returns favoring AI winners and quality factor underperformance. The manager maintains conviction in their quality-focused approach, viewing current conditions as reminiscent of the dot-com era where quality businesses trade at attractive valuations. The investment environment remains characterized by a K-shaped economy where affluent consumers thrive while lower-income segments struggle, influencing portfolio positioning away from businesses serving less affluent customers. AI continues reshaping industries, creating both genuine opportunities and pockets of exuberance. Key contributors included AerCap, HCA Healthcare, and TSMC, while UnitedHealth Group was the primary detractor. The manager initiated positions in Salesforce and London Stock Exchange Group, viewing AI-related concerns as creating attractive entry points for quality businesses. With 4% cash and a strong bench of potential investments, the fund remains positioned for selective deployment while maintaining focus on businesses with sustainable competitive advantages and experienced management teams.
L1 Capital International focuses on investing in high-quality businesses with long-term favorable drivers across diverse, well-structured industries, led by experienced management teams, while avoiding businesses exposed to lower socioeconomic consumers in favor of those serving more affluent segments.
The manager expects the 2026 investment environment to remain broadly consistent with 2025, with continued focus on AI developments and macroeconomic trends. The choppy investment environment makes industry and business selection critical, with expectations for continued volatility and divergence of performance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 14 2026 | 2025 Q4 | AER, AMZN, BKNG, CRH, CRM, DHR, GOOGL, HCA, ICE, INTU, J, LSEG.L, MA, MSFT, TSM, UBER, UNH, V | AI, consumer, Global Equities, Macro, Quality, technology, valuation |
J UBER AER TSM CRM INTU LSEG LN ICE |
AI continues to be a central focal point for stock markets, with companies being labeled as either AI winners or AI losers. The manager believes… |
| Oct 20 2025 | 2025 Q3 | EXP, HCA, NVDA, WEIR LN | Artificial Intelligence, Global Equities, Quality Investing, semiconductors, software | - | The fund examines whether AI is a sustainable productivity revolution or speculative bubble, noting parallels to the dot-com era. Managers favor high-quality global leaders like… |
| Jul 14 2025 | 2025 Q2 | - | earnings risk, Governance, Short Selling, valuation, volatility |
J UNH EXP HCA |
The commentary highlights active short selling as a key driver of alpha amid elevated valuations and structural business decline. Management emphasizes forensic analysis, governance risks,… |
| Apr 14 2025 | 2025 Q1 | EXP, GOOG, HCA, VIE FP | - | - | - |
| Dec 31 2024 | 2024 Q4 | BKNG, EXP, GPK, HCA, MSFT, NVDA, UNH | - | - | - |
| Sep 30 2024 | 2024 Q3 | AMZN, CRH, EXP, MSFT, NRP, NVDA | - | - | - |
| Jul 10 2024 | 2024 Q2 | AER, AMZN, CRH, DHR, EXP, MA, NVDA | - | - | - |
| Apr 15 2024 | 2024 Q1 | GPK, ICE, UNH | - | - | - |
| Dec 31 2023 | 2023 Q4 | HCA | - | - | - |
| Sep 30 2023 | 2023 Q3 | BKNG, INTU, NRP | - | - | - |
| Jul 23 2023 | 2023 Q2 | AMD, CRH, EXP, IDG GR, MIN AU, MSFT, UNH | - | - | - |
| Mar 31 2023 | 2023 Q1 | BKNG, CRH, GPK | - | - | - |
| Oct 24 2022 | 2022 Q3 | ADBE, AMD, AMZN, BKNG | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings | |
Trade DownDollar General delivered strong same-store sales and margin improvement as customers traded down from grocery and pharmacy channels. This trade-down behavior provided a tailwind to margins that are expected to persist into 2026. |
Discount Retail Consumer Margins Traffic | |
| 2025 Q3 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
SemiconductorsTaiwan Semiconductor represents the dominant manufacturer for leading fabless chip designers including NVIDIA, Apple, and Broadcom. The global arms race to develop artificial general intelligence will support multiple years of robust growth for foundries with leading-edge capabilities. |
Foundries Advanced Process AI Chips Manufacturing Technology Leadership | |
| 2025 Q2 |
Short |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 14, 2026 | Fund Letters | David Steinthal | CRM | Salesforce, Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | AI, CRM, Margins, Software, valuation | Login |
| Jan 14, 2026 | Fund Letters | David Steinthal | INTU | Intuit Inc. | Information Technology | Application Software | Bull | NASDAQ | AI, Ecosystems, Financialsoftware, Margins, valuation | Login |
| Jan 14, 2026 | Fund Letters | David Steinthal | LSEG LN | London Stock Exchange Group plc | Financials | Financial Exchanges & Data | Bull | New York Stock Exchange | analytics, Data, Exchanges, infrastructure, Recurring | Login |
| Jan 14, 2026 | Fund Letters | David Steinthal | ICE | Intercontinental Exchange, Inc. | Financials | Financial Exchanges & Data | Bull | New York Stock Exchange | Clearing, Data, Exchanges, Networks, Regulation | Login |
| Jul 14, 2025 | Fund Letters | David Steinthal | J | Jacobs Solutions Inc. | Industrials | Construction & Engineering | Bull | New York Stock Exchange | Advanced Manufacturing, Engineering services, infrastructure, margin expansion, spin-off, valuation re-rating, Water | Login |
| Jul 14, 2025 | Fund Letters | David Steinthal | UNH | UnitedHealth Group Incorporated | Health Care | Managed Health Care | Bear | New York Stock Exchange | exit, Governance Risk, Healthcare services, Management Quality, Medicare Advantage, Profit Warning | Login |
| Jul 14, 2025 | Fund Letters | David Steinthal | EXP | Eagle Materials Inc. | Materials | Construction Materials | Bull | New York Stock Exchange | construction materials, housing cycle, infrastructure, Low-cost producer, valuation | Login |
| Jul 14, 2025 | Fund Letters | David Steinthal | HCA | HCA Healthcare, Inc. | Health Care | Health Care Facilities | Bull | New York Stock Exchange | Healthcare Policy, Hospitals, risk management, Top Holding, valuation | Login |
| Jan 14, 2026 | Fund Letters | David Steinthal | J | Jacobs Solutions Inc. | Industrials | Construction & Engineering | Bull | New York Stock Exchange | AI, backlog, Consulting, engineering, infrastructure | Login |
| Jan 14, 2026 | Fund Letters | David Steinthal | UBER | Uber Technologies, Inc. | Consumer Discretionary | Ride Sharing & Delivery | Bull | New York Stock Exchange | Autonomy, mobility, Networks, Platforms, Ridesharing | Login |
| Jan 14, 2026 | Fund Letters | David Steinthal | AER | AerCap Holdings N.V. | Industrials | Aircraft Leasing | Bull | New York Stock Exchange | Aircraft, Aviation, backlog, Capitalallocation, Leasing | Login |
| Jan 14, 2026 | Fund Letters | David Steinthal | TSM | Taiwan Semiconductor Manufacturing Company Ltd. | Information Technology | Semiconductors | Bull | New York Stock Exchange | AI, CapEx, Foundry, scale, semiconductors | Login |
| TICKER | COMMENTARY |
|---|---|
| AER | Airline leasing business AerCap contributed 1.4% to the Fund's returns |
| AMZN | We added to our holdings in Amazon.com Inc. |
| BKNG | You may remember that we owned Booking during the pandemic. It is the world's leading online travel agency and a business we have admired for a long time. The company benefits from powerful network effects—more hotels attract more travelers, and vice versa—creating a moat that is incredibly difficult for competitors to cross. It is highly profitable, capital-light, and generates significant free cash flow. We were happy to re-enter this high-quality compounder at a valuation that offers a compelling margin of safety. |
| CRM | We trimmed Salesforce Inc. |
| DHR | After lagging through the first three quarters of 2025, Danaher's stock rebounded during Q4 as bioprocessing, life science, and diagnostics demand continued to recover from a cyclical trough. On the 3Q25 call, management established conservative 2026 growth expectations. Revenue is expected to continue to lag long-term trends at 3-6% but improve throughout the year. |
| GOOGL | I'm willing to go bankrupt rather than lose this race. Larry Page, co-founder of Google |
| HCA | HCA Healthcare (the operator of 186 hospitals and around 2,400 ambulatory sites) reported pleasing results and management upgraded its full year's earnings guidance by 4.8% at the EPS level. With it buying back more shares, and after making some other tweaks, our valuation increased by 5%. But, with a share price increase of 9.7% over the quarter, the premium widened. |
| ICE | Intercontinental Exchange (ICE) is a long-term holding and remains a top 10 position in the Fund. ICE's share price has been under pressure, largely due to AI-related concerns. The share price has already recovered 15% from recent lows. |
| INTU | ServiceNow (NOW) and Intuit (INTU) exemplify this dynamic, advancing meaningful AI initiatives that enhance customer value and deepen competitive advantages. Intuit is deploying intelligent agents and conversational tools like 'Ask Anything' to simplify complex financial tasks across QuickBooks and TurboTax. |
| J | Jacobs Solutions is a global leader in engineering services. Whilst the company continues to perform in line with our expectations, during the quarter a competitor held an investor event and suggested AI would disrupt the engineering services industry. We think Jacobs Solutions will be a net beneficiary of the AI revolution. Management is actively investing in AI to deliver efficiencies and the company also benefits from providing engineering services to meet the massive growth in AI-centric infrastructure. We view recent share price weakness in Jacobs as unjustified, so we moderately increased our position. |
| LSEG.L | LSEG's shares were -20%. They are therefore illustrative of companies that have held back the Strategy's returns this year. Consistent with much of the rest of the portfolio, operating results remain solid. The company will almost certainly report double-digit growth in earnings for 2025, and the company has met or exceeded investors' expectations for the year. The challenges have not so much been financial but hypothetical – focussed on AI's potential to change competitive dynamics in their industry. LSEG is at 6.1% FCF yield. We have added to the Strategy's investments this year. |
| MA | The enduring appeal of card payments is their universality. Consumers trust that Visa and Mastercard will be accepted globally. After more than 20 years of litigation, Visa and Mastercard agreed to yet another settlement that gives merchants greater flexibility |
| MSFT | OpenAI's well-documented 'circular' funding with its business partners (NVIDIA, Microsoft, among others) is additional cause for concern. |
| TSM | TSMC leads the MSCI Emerging Markets Index as the manufacturer in the AI ecosystem. |
| UBER | Another key Fund performance detractor in the quarter was Uber Technologies Inc. (UBER) reflecting increasing market concerns about autonomous vehicles and the potential impact the technology may have on future growth. |
| UNH | Exited UnitedHealth Group where we had diminished conviction in the company's growth outlook. |
| V | We added to our holdings in Visa Inc. |
| 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 | |||