| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.1% | 2.6% | -10.9% |
L1 Capital International returned 2.6% net in Q2 2026 versus the benchmark's 12.5%, with underperformance driven primarily by not holding certain AI momentum stocks rather than poor stock selection. The market has become extraordinarily concentrated, with AI capex beneficiaries accounting for 45% of index returns and just three companies (AMD, Intel, Micron) contributing 17% of quarterly returns despite representing only 2% of market cap. The manager increased exposure to Nvidia, viewing it as trading well below fair value despite strong earnings growth, while reducing software exposure due to AI disruption concerns, selling Salesforce and CDW. The portfolio was rebalanced toward high-quality, non-AI-sensitive businesses trading at compelling valuations including American Express, Apollo, Danaher, HCA and ICE. While AI capital expenditure is expected to remain extremely strong for years, the manager sees stretched valuations in some AI Winners alongside attractive opportunities in quality businesses whose long-term prospects are underappreciated. The portfolio holds 22 investments with 5% cash, positioned to deliver attractive risk-adjusted returns for patient investors.
The manager believes the current market is characterized by extreme concentration and momentum-driven pricing that has created a two-tier market with both frothy exuberance in AI Winners and over-pessimism elsewhere, presenting compelling value opportunities in high-quality businesses for investors with longer-term horizons who can look through near-term volatility and uncertainty.
The manager sees a future full of uncertainty with a wide range of potential outcomes. While AI enthusiasm is grounded in genuine fundamental strength with data centre construction expected to remain extremely strong for several years, valuations of some AI Winners increasingly assume near-perfect execution. The market is characterized by both frothy exuberance and over-pessimism, presenting compelling opportunities in high-quality businesses whose long-term prospects are not reflected in share prices. The portfolio businesses are generally performing strongly with management teams responding thoughtfully to changing opportunities and risks. The manager remains focused on quality, valuation and avoidance of permanent capital loss, believing the portfolio is well positioned to deliver attractive risk-adjusted returns for patient investors with longer-term horizons.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 15 2026 | 2026 Q2 | AER, AMZN, APO, AXP, BKNG, CDW, CRH, CRM, DHR, GOOGL, HCA, ICE, INTU, MA, MSFT, NVDA, TSM, V | AI, Cloud, Concentration, geopolitics, Hyperscalers, momentum, semiconductors, valuation | - | L1 Capital underperformed in Q2 2026 as extreme market concentration favored AI momentum stocks the fund didn't own. The manager increased Nvidia exposure while reducing software holdings due to AI disruption risks, rebalancing toward quality non-AI businesses at compelling valuations. Despite genuine strength in AI infrastructure spending, stretched valuations in some AI Winners contrast with attractive opportunities elsewhere. The portfolio is positioned for patient investors willing to look through near-term momentum. |
| Apr 14 2026 | 2026 Q1 | AMZN, BKNG, CRH, CRM, GOOGL, HCA, ICE, INTU, J, MA, MSFT, TSM, V, WEIR.L | AI, Cloud, energy, Geopolitical, payments, Quality, software, valuation | - | L1 Capital underperformed in Q1 2026 as markets oversimplified AI disruption risks and geopolitical uncertainty. High-quality software and payments companies are being mispriced despite strong fundamentals and adaptation capabilities. The fund sees compelling opportunities with almost every holding trading at or below fair value ranges, using market dislocation to selectively increase exposure to quality businesses. |
| 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 |
L1 Capital returned 9.8% in 2025, underperforming due to quality factor weakness and concentrated market returns. The manager sees opportunities in quality businesses labeled as AI losers trading at attractive valuations, while avoiding AI winners priced for perfection. Portfolio remains focused on businesses serving affluent consumers in the K-shaped economy, with selective deployment from a strong investment pipeline. |
| Oct 20 2025 | 2025 Q3 | AAPL, AERCF, AMZN, BKNG, CRH, DHR, GOOGL, HCA, ICE, INTU, J, MA, META, MSFT, NVDA, TSLA, TSM, UBER, V, WEIR.L | AI, global, gold, Quality, tariffs, technology, Trump, value | - | L1 Capital underperformed in Q3 2025 as concentrated AI and crypto themes drove benchmark returns. The fund maintains Quality/Value discipline amid Trump policy dominance and AI development. New positions in Nvidia and Weir Group reflect selective AI exposure and mining equipment plays. Portfolio nearly fully invested at 2% cash with focus on risk-adjusted returns through business selection. |
| Jul 14 2025 | 2025 Q2 | AER, AMZN, BKNG, CRH, HCA, ICE, J, MA, MSFT, V | AI, financials, global, healthcare, infrastructure, Quality, technology, Trade Policy |
J UNH EXP HCA UNH J |
L1 Capital delivered 22.1% annual returns despite Q2 underperformance amid Trump tariff volatility. Manager divested UnitedHealth completely after profit downgrades, while adding to quality names like Jacobs Solutions during market weakness. Portfolio benefits from AI, infrastructure, and demographic trends. Key risks include trade war escalation and Fed independence. Fund remains concentrated in high-conviction quality businesses. |
| Apr 14 2025 | 2025 Q1 | AER, AMZN, BKNG, CRH, GOOGL, HCA, ICE, MA, MMC, MSFT, V, VIE.PA | AI, global, healthcare, Quality, tariffs, Trade Policy, valuation |
HCA AMZN MSFT GOOGL VIE.PA |
L1 Capital outperformed in Q1 2025 despite Trump tariff chaos by maintaining discipline on quality businesses trading below fair value. Added to healthcare winner HCA and defensive utility Veolia while tech holdings Amazon, Microsoft, Alphabet offer compelling value despite AI headwinds. Portfolio positioned for recovery as trade policy uncertainty moderates. |
| Dec 31 2024 | 2024 Q4 | AER, AMZN, BKNG, CRH, EXP, GOOGL, HCA, ICE, INTU, MA, MSFT, NVDA, TSLA, UNH, V | AI, global, healthcare, interest rates, large cap, Quality, technology |
MSFT HCA |
L1 Capital delivered solid Q4 returns while navigating higher-for-longer interest rates and AI transformation. The fund maintains conviction in quality technology leaders like Microsoft despite AI investment uncertainty, opportunistically added to healthcare names like HCA amid regulatory concerns, and reduced cash to 2% as market volatility creates attractive entry points in fundamentally strong businesses. |
| Sep 30 2024 | 2024 Q3 | AAPL, AER, AMD, AMZN, BKNG, CRH, EXP, GOOGL, HCA, ICE, MA, META, MSFT, NVDA, PFE, PTON, TSLA, UNH, V, ZM | AI, large cap, Quality, rates, technology, US, value | - | L1 Capital delivered 4.7% returns in Q3 2024, outperforming by 2.3%. The manager maintains quality-focused positioning while avoiding Nvidia despite AI's potential due to excessive valuation expectations. Mixed economic conditions create selective opportunities for their bottom-up approach targeting well-managed businesses at fair value that can navigate uncertainty. |
| Jul 10 2024 | 2024 Q2 | AER, AMZN, BKNG, CRH, DHR, EXP, GOOGL, HCA, ICE, MA, MSFT, NRP, NVDA, UNH, V | Aircraft Leasing, Global Equities, infrastructure, interest rates, Market Concentration, Quality, technology, value | AER | L1 Capital's global equity fund underperformed in Q2 due to avoiding Nvidia's AI-driven rally, but maintains disciplined value approach. Key opportunity highlighted in AerCap aircraft leasing at 8x P/E amid industry supply constraints. Building materials positions CRH and Eagle Materials now attractively valued despite recent weakness. Portfolio remains quality-focused with geographic diversification while economic growth slows and Fed risks policy error. |
| Apr 15 2024 | 2024 Q1 | AAPL, AMZN, BKNG, CRH, EXP, GOOGL, GPK, HCA, ICE, MA, META, MSFT, NRP, NVDA, TSLA, UNH | AI, global, healthcare, inflation, materials, Quality, rates, technology | - | L1 Capital International delivered solid Q1 performance while navigating mixed economic conditions. The fund maintains quality focus with strategic portfolio adjustments including selling Graphic Packaging and adding to ICE and UnitedHealth on weakness. Despite celebrating strong 5-year track record, the manager emphasizes selective stock picking and valuation discipline as markets reach new highs. |
| Dec 31 2023 | 2023 Q4 | ADI, AMD, AMZN, BKNG, CME, CRH, EXP, GOOGL, GPK, HCA, ICE, INTU, MA, MSFT, NRP, UNH | healthcare, inflation, infrastructure, Quality, technology, value | HCA | L1 Capital delivered strong outperformance with 36.9% returns in 2023, driven by broad-based gains beyond mega-tech. The manager expects continued economic soft landing with declining inflation but higher-for-longer rates. Portfolio shifts toward defensive healthcare and infrastructure themes while trimming overvalued technology positions. Business selection becomes critical as free capital era ends. |
| Sep 30 2023 | 2023 Q3 | AMZN, BKNG, CRH, GOOGL, GPK, INTU, MA, MCO, MMC, MSFT, NRP, NVDA, UNH, V | AI, Cloud, global, healthcare, Quality, technology, Travel, valuation | - | L1 Capital International outperformed by 4.0% in Q3 2023 through selective quality investing. Strong performance from travel leader Booking Holdings and AI-focused Intuit offset by portfolio trimming for valuation discipline. Fund sees ongoing post-COVID normalization with performance divergence favoring quality companies. Current holdings trade at attractive valuations despite macro headwinds from higher real rates. |
| Mar 31 2023 | 2023 Q1 | BKNG, CRH, GPK | - | - | |
| Oct 24 2022 | 2022 Q3 | ADBE, AMD, AMZN, BKNG | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI is rapidly becoming more capable and potentially more disruptive to established businesses. The manager expects AI capital expenditure to remain extremely strong for at least the next several years, driven by data centre construction and AI compute rollout. While AI is not a fad and infrastructure bottlenecks are real, valuations of some designated AI Winners increasingly assume sustained exceptional growth and near-perfect execution. |
Data Centers Cloud Semiconductors Software |
SemiconductorsMemory has become the latest AI capex bottleneck with genuine step change in demand causing parabolic increases in memory component prices and manufacturer share prices. The manager increased investment in Nvidia, viewing it as trading well below fair value despite being the world's largest company. TSMC also contributed strongly to performance as the market favoured AI capex winners. |
Memory GPUs Foundries Semi Equipment | |
CloudThe manager expects further increases in hyperscaler capital expenditure for AWS, Google Cloud Platform, and Azure. They believe the market remains overly focused on near-term free cash flow and underappreciates the longer-term structural opportunity for hyperscalers and potential returns on AI-related capital investment. AWS capacity ramp and internal chip capabilities remain under-appreciated. |
Hyperscalers Data Centers Cloud Infrastructure | |
PaymentsMastercard and Visa are both top 10 holdings in the portfolio. Visa contributed around 0.5% or greater to the Fund's quarterly returns, indicating continued strength in the payments franchise. |
Credit Cards FinTech | |
E-commerceAmazon's ecommerce business is consistently improving operationally. The June 2026 announcement to extend Amazon Freight services to the less-than-truckload market segment indicates management has sufficient comfort in logistics network performance to further extend the platform to third parties. The ecommerce flywheel remains underappreciated and undervalued. |
Logistics Marketplaces | |
SoftwareThe manager is concerned that AI is potentially more disruptive to software businesses. They sold Salesforce despite it being the clear leader in its segment, well-managed with strong business economics, because AI implications are significant and management will need strong execution and business model adjustments. Microsoft also needs to lift its game and execute better to clear the higher bar set by AI. |
SaaS Enterprise Software CRM | |
Aircraft LeasingAerCap continues to benefit from strong demand and constrained supply across both aircraft and engines. Higher fuel prices from Middle East conflict have contributed to some airline capacity adjustment and pressure on weaker carriers, but this is not expected to materially negatively impact AerCap and may present opportunities. Another quarter of strong financial results and elevated buyback activity is expected. |
Airlines Aviation Services | |
ExchangesIntercontinental Exchange is trading at a forward P/E ratio of around 17x, a level not seen since the GFC. The manager views ICE's core franchises as well positioned despite market concerns around AI impact on proprietary data and CFTC regulatory developments. They modestly added to the ICE investment at a price well below assessed fair value. |
Capital Markets Market Data Crypto | |
| 2026 Q1 |
AIMarkets are overly simplistic in categorizing companies as AI winners or losers, creating opportunities in high-quality software businesses that are being mispriced due to perceived disruption risks. The fund sees nuanced outcomes rather than binary conclusions, with many software companies now trading at attractive valuations despite their ability to adapt and benefit from AI. |
Software Disruption Valuation Technology Innovation |
SoftwareSoftware sector has materially underperformed due to AI disruption concerns, but the market is overestimating near-term disruption risk while underappreciating adaptation capabilities. Core holdings like Intuit, Microsoft and Salesforce face pressure despite stable earnings expectations, with valuation multiples materially de-rating across the sector. |
Enterprise SaaS Cloud Disruption Valuation | |
CloudHyperscalers are investing hundreds of billions in AI infrastructure, with the market overly focused on short-term uncertainty while underappreciating long-term structural opportunity. The fund expects leading hyperscalers to generate attractive returns on invested capital over the medium to long term despite current capital expenditure concerns. |
Infrastructure Capex Data Centers Hyperscalers Returns | |
PaymentsMastercard and Visa remain large holdings despite share price weakness and concerns about emerging technologies like agentic commerce and stablecoins disrupting traditional payments. The fund believes these concerns are overstated given their scale, network effects, and regulatory positioning creating significant barriers to disruption. |
Networks Disruption Fintech Scale Barriers | |
GeopoliticalIran conflict remains a key source of uncertainty affecting markets more than fundamentals, with implications for energy markets and global supply chains. The fund expects President Trump to seek an off-ramp from the conflict, with near-term resolution potentially reversing recent market trends and limiting economic damage. |
Conflict Energy Uncertainty Politics Resolution | |
EnergyFund had no exposure to energy during elevated oil prices, contributing to underperformance. The Iran conflict has driven oil price spikes and energy sector outperformance, with markets pricing partial normalization over the next 12 months while remaining above pre-conflict levels. |
Oil Conflict Prices Exposure Outperformance | |
| 2025 Q4 |
AfricaFund had exceptional performance in 2025 with 67.21% gains, more than doubling 2024's 27% returns and outperforming the 44.7% benchmark. African Lions Fund remains the top performing Africa Frontier Fund since inception with 205.3% cumulative returns over 5+ years. |
Frontier Markets Emerging Markets Outperformance Returns Benchmark |
LiquidityManager addresses liquidity concerns in African frontier markets, explaining challenges in buying meaningful quantities without affecting prices and potential redemption risks. Notes that liquidity varies cyclically and structurally, with foreign investor participation being key to improving market liquidity. |
Market Structure Trading Volume Redemptions Foreign Investment Volatility | |
ValuePortfolio offers excellent value with forward PE of 6.1x, dividend yield of 8.0%, and expected EPS growth of 19.2% in 2026. Manager emphasizes no valuation multiple expansion over 5+ years, with share prices rising in line with earnings growth, answering concerns about missing opportunities. |
Valuation Earnings Growth Dividend Yield Price to Earnings Multiple Expansion | |
| 2025 Q3 |
AIAI development is accelerating with significant investment in datacenter infrastructure and companies incorporating AI into products and services. Leading AI models are approaching parity with industry experts across multiple sectors. However, uncertainty remains around development costs, power requirements, and whether current valuations are justified. |
Artificial Intelligence Datacenter OpenAI Productivity Disruption |
Trade PolicyTrump administration policies are placing the U.S. first with increased tariffs and international trade tensions. Tariff policy is likely to be both inflationary and negative for overall economic growth. There is potential for flare-ups and breakdowns in discussions between the U.S. and key trading partners. |
Tariffs International Trade Inflation Economic Growth Policy | |
QualityThe traditional Quality factor has underperformed the broader U.S. market by the widest margin since the dot.com boom. L1 Capital's investment philosophy is based on fundamental assessment of Quality and Value, with Quality companies often outperforming in challenging markets. |
Quality Factor Value Fundamental Analysis Market Outperformance Investment Philosophy | |
GoldGold company share prices increased materially during the quarter, reflecting the 'debasement trade' or a hedge against inflation, rising U.S. debt and a softening U.S. dollar. The fund has small exposure through Weir Group as a 'picks and shovels' business. |
Debasement Trade Inflation Hedge Dollar Weakness Mining Equipment Commodity Exposure | |
| 2025 Q2 |
Trade PolicyPresident Trump's Liberation Day Reciprocal Tariffs policy announced on April 2, 2025 created maximum uncertainty. The manager expects the U.S. and world economies will be in a worse position than before the trade war, with higher inflation in the U.S. and lower economic growth globally. |
Tariffs Trade War Inflation Economic Growth Policy |
Infrastructure SpendingGlobal infrastructure renewal remains a key priority with the $1.2 trillion Infrastructure Investment and Jobs Act still in early deployment stages. The U.K. committed £725 billion over 10 years and Australia committed $120 billion over 10 years for infrastructure programs. |
Infrastructure Government Spending Construction Transportation Investment | |
WaterRising climate volatility, water scarcity, aging infrastructure, urbanisation and shifting demographics are driving sustained investment in water systems. The American Society of Civil Engineers estimates a $3.7 trillion gap in U.S. infrastructure investments including water treatment and supply systems. |
Water Treatment Infrastructure Climate Urbanisation Investment | |
AIArtificial Intelligence is driving and reshaping many industries over the coming decade. The manager notes AI will have significant impact while acknowledging some market exuberance in AI sectors. Leading technology companies are well positioned to maintain AI leadership. |
Technology Innovation Digital Transformation Growth Leadership | |
| 2025 Q1 |
Trade PolicyTrump's Reciprocal Tariffs framework is deeply flawed, based on trade deficits rather than actual tariffs or unfair practices. The policy creates significant economic uncertainty and potential for global trade disruption. Liberation Day policies have been partially paused but tensions with China remain at unprecedented levels. |
Tariffs Trade China Reciprocal Deficits |
AIMarket concerns about elevated AI capital expenditure and returns on investment by cloud service providers. Chinese AI model DeepSeek created competitive pressures and reduced expectations for AI capex requirements. The fund holds positions in Amazon, Microsoft, and Alphabet despite near-term headwinds. |
Cloud Capex DeepSeek Competition Technology | |
HealthcareHCA Healthcare's share price rebounded after overreacting to Trump administration healthcare policy concerns. The manager added to the position at attractive valuations and saw partial recovery during the quarter, making it the only company to contribute over 1% to quarterly returns. |
HCA Policy Valuation Recovery Hospitals | |
WaterInitiated position in Veolia Environnement, a leading provider of water, waste and energy management solutions. The company offers defensiveness with 85% macro-immune businesses, 90% contract renewal rates, and essential infrastructure ownership trading at attractive valuations. |
Veolia Infrastructure Utilities Defensive Essential | |
| 2024 Q4 |
AIAI is viewed as a world-changing General Purpose Technology with immense potential but inherent uncertainty. Microsoft has a leadership position through ChatGPT and other capabilities, investing approximately $80 billion in AI-enabled datacenters. The technology is ground-breaking and unprecedented, with unknowable issues regarding development speed, commercialization costs, and infrastructure requirements. |
Cloud Data Centers Software Technology |
RatesInterest rates continue to stay higher for longer as expected, with Central Banks not aggressively reducing rates while inflation remains above targets and employment conditions remain robust. Long-term interest rates are in a grey zone, with good economic news currently negative for equity markets as it leads to expectations for higher rates. |
Inflation Monetary Policy Economic Growth Central Banks | |
HealthcareHCA Healthcare faces regulatory uncertainty following U.S. elections, with market concerns about potential policy changes under Trump administration affecting Health Exchanges and Medicaid reimbursement. Despite these headwinds, HCA maintains regional leadership in higher acuity care with experienced physicians and quality facilities. |
Hospitals Managed Care Policy Risk Reimbursement | |
CloudHyperscalers like Azure, Amazon Web Services, and Google Cloud Platform are leaders in providing AI as a service, facilitating other companies to develop and implement AI. These companies are investing heavily in computing power and infrastructure to develop AI-centric capabilities for their own requirements and third parties. |
AI Data Centers Infrastructure Technology | |
| 2024 Q3 |
AIThe fund extensively analyzes Nvidia's dominance in AI infrastructure and the broader AI gold rush. While acknowledging AI's transformative potential, the manager expresses concern about Nvidia's $3.2 trillion valuation given high uncertainty around competition, commercialization timelines, and returns on AI investments. |
GPUs Data Centers Machine Learning Semiconductors Cloud |
QualityThe fund emphasizes investing in high-quality businesses with strong management teams that can navigate choppy economic conditions. The manager highlights how their quality-focused approach helps identify companies that can actively manage through mixed operating environments. |
Management Cashflow Resilience Fundamentals Moats | |
RatesThe manager expects U.S. interest rates to stay higher for longer due to strong economic data, low unemployment, and wages growth exceeding inflation. They view current real interest rates as normal and conducive to value appreciation of quality assets over time. |
Federal Reserve Monetary Policy Inflation Employment Central Banks | |
| 2024 Q2 |
Aircraft LeasingAerCap represents a compelling opportunity in aircraft leasing, trading at 8x P/E and 1x understated tangible book value. The industry benefits from structural aircraft shortages due to Boeing and Airbus production issues, while travel demand has recovered above pre-COVID levels. AerCap's scale and diversification provide competitive advantages in financing, purchasing, and risk management. |
Aircraft Leasing AerCap Aviation Travel Leasing |
AIThe letter acknowledges the significant impact of AI on markets, particularly through Nvidia's outsized contribution to index returns. While recognizing AI's importance and Nvidia's ability to monetize its leading position, the manager views current valuations as providing unattractive risk-adjusted returns despite the business surprising to the upside. |
AI Nvidia Technology Semiconductors Growth | |
RatesInterest rates are expected to remain higher for longer, with the Fed likely behind the curve in cutting rates. Housing inflation remains elevated, and while core PCE excluding owner's equivalent rent is near the Fed's 2% target, the central bank continues to focus on headline measures. Rate policy impacts across sectors and geographies. |
Rates Fed Inflation Monetary Policy Housing | |
Building MaterialsCRH and Eagle Materials faced headwinds from weather disruptions and softening housing activity, though infrastructure spending remains robust. Both companies trade at attractive 13-14x P/E ratios despite short-term pressures. Long-term demand drivers include federal infrastructure spending and ongoing housing construction needs. |
Building Materials Construction Infrastructure Housing CRH | |
| 2024 Q1 |
InflationCore U.S. inflation remains above the Federal Reserve's 2% target, slowing the trend toward rate cuts. The manager notes inflation has been coming down but remains closer to 3% than 2%, with mixed inflationary pressures across different sectors and commodities. |
Inflation Federal Reserve Interest Rates Monetary Policy Core PCE |
RatesInterest rates are likely to stay higher for longer given strong employment and inflation above central bank targets. Market expectations for rate cuts have been pushed out, with June 2024 cut probability falling to below 35% from 75% a month prior. |
Interest Rates Federal Funds Rate Rate Cuts Central Banks Monetary Policy | |
AIArtificial Intelligence is described as the market's current obsession and a key growth area of the modern economy. The manager notes AI alongside cloud computing and software as driving market returns, though warns of pockets of irrational exuberance. |
Artificial Intelligence Technology Cloud Computing Software Innovation | |
QualityThe fund focuses on businesses meeting their unique definition of Quality, emphasizing sustainable leadership positions, pricing power, experienced management, and financial strength. Quality assessment is central to their investment process and risk management approach. |
Quality Leadership Pricing Power Management Financial Strength | |
| 2023 Q4 |
InflationManager expects inflation to continue declining with core PCE falling to 3.2% in November 2023. Goods are already deflationary while services inflation is no longer driving up headline rates. Housing inflation has peaked but remains sticky. |
Inflation PCE Deflation Services Housing |
HealthcareFocus on aging demographics driving hospital demand with HCA Healthcare positioned to benefit from growing population aged 65+ and increasing high-acuity services. UnitedHealth also highlighted as benefiting from growing health spending. |
Healthcare Demographics Hospitals Aging Acuity | |
Infrastructure SpendingManager notes fiscal policy supporting economic growth and super-charging development of physical infrastructure. Portfolio increased exposure to sectors expected to benefit from strong infrastructure spending in the United States. |
Infrastructure Fiscal Construction Government Spending | |
| 2023 Q3 |
AIAI is described as a revolutionary step change in computing with broad implications across industries. The fund sees early commercial applications at companies like Intuit and Microsoft, with the Big Three cloud providers exceptionally well positioned to provide AI infrastructure as a service. |
Artificial Intelligence Machine Learning Large Language Models Generative AI Commercial Applications |
CloudThe ongoing shift to cloud computing still has a long runway with AWS, Azure, and GCP growing from $25 billion to over $150 billion in revenue over five years. The trend to shift IT spend from on-premise to cloud is far from complete, providing strong growth profiles for major providers. |
Cloud Computing AWS Azure Infrastructure IT Services | |
OnshoringManagement teams continue investing in onshoring and nearshoring of supply chains and manufacturing operations. This reflects desires to strengthen supply chains after COVID-19 vulnerabilities and respond to geopolitical tensions, with increased manufacturing in Vietnam, India, and Mexico. |
Supply Chain Manufacturing Nearshoring Geopolitical Diversification | |
TravelStrong global travel environment continues with particular strength in Europe. Current travel volumes are only slightly elevated compared to pre-COVID trends, with some regions like outbound travel from China still relatively depressed, suggesting further upside potential. |
Tourism Hotels Online Travel Recovery Booking |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| 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 |
| Jun 30, 2025 | Fund Letters | L1 Capital International Fund | UNH | UnitedHealth Group | Health Care | Health Care Services | Bear | NYSE | Bear, divestiture, Health Care Services, health insurance, management issues, Profit Downgrades, Quality Assessment | Login |
| Jun 30, 2025 | Fund Letters | L1 Capital International Fund | J | Jacobs Solutions | Industrials | Construction & Engineering | Bull | NYSE | AI infrastructure, Bull, CHIPS Act, Construction & Engineering, infrastructure, margin expansion, market leadership, secular growth | Login |
| Mar 1, 2025 | Fund Letters | L1 Capital International Fund | HCA | HCA Healthcare | Health Care | Health Care Facilities | Bull | NYSE | defensive, essential services, healthcare, Hospitals, market leader, Trump Policy, Value | Login |
| Mar 1, 2025 | Fund Letters | L1 Capital International Fund | AMZN | Amazon.com | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | AI, Cloud computing, e-commerce, Long-term Value, Magnificent 7, market leader, technology | Login |
| Mar 1, 2025 | Fund Letters | L1 Capital International Fund | MSFT | Microsoft | Information Technology | Systems Software | Bull | NASDAQ | AI, Azure, Cloud computing, Enterprise software, Long-term Value, Magnificent 7, technology | Login |
| Mar 1, 2025 | Fund Letters | L1 Capital International Fund | GOOGL | Alphabet | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI disruption, competitive threats, Long-term Value, Magnificent 7, search engine, technology | Login |
| Mar 1, 2025 | Fund Letters | L1 Capital International Fund | VIE.PA | Veolia Environnement | Utilities | Multi-Utilities | Bull | Euronext Paris | defensive, dividend yield, essential services, Europe, Macro-Immune, utilities, waste management, Water Management | Login |
| Dec 1, 2024 | Fund Letters | L1 Capital International Fund | MSFT | Microsoft Corporation | Information Technology | Systems Software | Bull | NASDAQ | AI, Artificial Intelligence, Azure, Cloud computing, Enterprise software, infrastructure, Pricing power, SaaS, Software, technology | Login |
| Dec 1, 2024 | Fund Letters | L1 Capital International Fund | HCA | HCA Healthcare Inc | Health Care | Health Care Facilities | Bull | NYSE | For-Profit, Health Exchanges, healthcare, High-Acuity Care, Hospitals, Medicaid, Policy risk, Reimbursement, Republican States, Value | Login |
| Jun 30, 2024 | Fund Letters | L1 Capital International Fund | AER | AerCap Holdings | Financials | Specialized Finance | Bull | NYSE | Aircraft Leasing, asset management, Aviation, Cyclical Recovery, financials, Specialized Finance, Transportation, Value | Login |
| Dec 31, 2023 | Fund Letters | L1 Capital International Fund | HCA | HCA Healthcare | Health Care | Health Care Facilities | Bull | NYSE | Aging demographics, cash flow generation, defensive, Emergency Services, geographic footprint, healthcare, High Acuity Services, Hospitals, market share, Outpatient Services | Login |
| TICKER | COMMENTARY |
|---|---|
| TSM | TSMC contributed more than 2.0% to the Fund's returns (measured in A$). TSMC, and to a lesser extent Nvidia, benefitted from the market favouring AI capex winners. Our valuation of both businesses continues to increase. Nvidia and TSMC are currently top 5 holdings in the Fund. |
| NVDA | TSMC contributed more than 2.0% to the Fund's returns (measured in A$), while Amazon.com contributed around 1.0%. Four other companies (AerCap, Alphabet, Nvidia and Visa – in alphabetic order) each contributed around 0.5% or greater. TSMC, and to a lesser extent Nvidia, benefitted from the market favouring AI capex winners. Our valuation of both businesses continues to increase, and the rationale for increasing the Fund's investment in Nvidia is discussed on page 9. Nvidia and TSMC are currently top 5 holdings in the Fund. During the June 2026 Quarter the Fund's investment in Nvidia was increased. This reflects our view that AI is rapidly becoming more capable and AI capital expenditure will be stronger for longer. Nvidia is now a top 5 holding. It is the world's largest company by market capitalisation, so is hardly unknown. We have followed Nvidia for many years, but our first investment in the company was slightly less than 12 months ago. At that time, we explained that we had materially underestimated the growth in AI, the size of the addressable market, and Nvidia's associated growth and profitability. Since then, Nvidia's financial performance has gone from strength to strength, and our earnings and cash flow expectations for Nvidia for the next few years have almost doubled. Yet the share price has 'only' increased around 15% since our initial investment. This has been reflected in a material derating of Nvidia's near term trading multiples. Market commentators are generally not concerned about Nvidia's short term earnings prospects. Key concerns are focused on longer term loss of market share, and questions over management's allocation of Nvidia's immense free cash flow. We do expect Nvidia will lose share within the entire 'AI compute pie', but the rapid growth in the size of the pie will mean Nvidia's smaller share still corresponds to very strong growth and financial performance. While there may be some unsuccessful investments, we are comfortable with Nvidia's overall capital allocation strategy. We consider Nvidia to be trading well below fair value today – an example of value to be found amongst all this AI exuberance. |
| AMZN | TSMC contributed more than 2.0% to the Fund's returns (measured in A$), while Amazon.com contributed around 1.0%. We remain excited by the outlook for Amazon.com, both for the ecommerce business and Amazon Web Services (AWS). Operational execution within ecommerce is consistently improving, and the June 2026 announcement to extend Amazon Freight services to the less-than-truckload market segment is an indication that management has sufficient comfort in the operational performance of the logistics network to further extend the platform to third parties. We expect further increases in AWS's capital expenditure which will result in Amazon.com generating negative free cash flow. We believe the market remains overly focused on near-term free cash flow and continues to underappreciate the longer-term structural opportunity for the hyperscalers and the potential returns on their AI-related capital investment. Amazon CEO Andy Jassy's Letter to Shareholders in April 2026 is recommended reading, particularly his perspectives on AI and how Amazon is being positioned for what he considers to be a 'seminal shift'. Jassy shed some light on AWS's internal chip capabilities (particularly Graviton – CPU, and Trainium – GPU) which we believe remain under-appreciated, as is the nearer term ramp in AWS capacity. In our view, both the ecommerce flywheel and AWS remain underappreciated and undervalued. |
| AER | Four other companies (AerCap, Alphabet, Nvidia and Visa – in alphabetic order) each contributed around 0.5% or greater. AerCap, the world's largest aircraft and aircraft engine lessor, continues to benefit from strong demand and constrained supply across both aircraft and engines. Higher fuel prices associated with the Middle East conflict have contributed to some adjustment in airline capacity and increased pressure on weaker carriers, but we do not expect this to materially negatively impact AerCap and may present opportunities for AerCap's nimble management team. We expect another quarter of strong financial results and elevated buyback activity. Although upside is more modest following recent share price appreciation, AerCap remains a high-quality compounder capable of creating significant shareholder value through sustained financial performance and disciplined capital allocation. |
| GOOGL | Four other companies (AerCap, Alphabet, Nvidia and Visa – in alphabetic order) each contributed around 0.5% or greater. We have rebalanced the portfolio weights between Alphabet and Microsoft. We remain comfortable with the Azure hyperscaler business of Microsoft, although we believe the business may be less well positioned compared to Alphabet's GCP and Amazon's AWS hyperscaler businesses: Microsoft is behind in developing its own chips (GPUs, CPUs, ASICs) to support AI workloads at lower cost and reduce reliance on Nvidia. Previously, Azure pulled back on some data centre investments and is now capacity constrained and more dependent on neocloud capacity for immediate needs. Azure is more OpenAI-centric and less Anthropic-centric, and recently Anthropic has been out-executing OpenAI. |
| V | Four other companies (AerCap, Alphabet, Nvidia and Visa – in alphabetic order) each contributed around 0.5% or greater. |
| INTU | Intercontinental Exchange and Intuit each detracted from the Fund's performance by more than 1.0%. Intuit's Q3 2026 quarterly results were moderately below our – and the market's – expectations. The share price fell nearly 40% during the June 2026 quarter. While we consider the market's response excessive, it was not without reason. Intuit operates a number of software businesses. QuickBooks (accounting, payroll and payments) continues to perform solidly although growth rates are expected to slow. Credit Karma (personal finance) has performed exceptionally well, while Mailchimp (marketing) has struggled since acquisition although this is not new information. The core disappointment was the TurboTax business. TurboTax is a tale of two cities. Intuit has been investing in AI for many years. TurboTax has developed a hybrid offering between AI driven software and a human tax expert called TurboTax Live which is rapidly disrupting the 'do it for me' tax filing industry. This part of TurboTax grew at a mid-30s growth rate and is now over 50% of total TurboTax revenue. However, the 'do it yourself' TurboTax product lost meaningful share amongst price sensitive, low-income filers, causing a modest downgrade to expected total TurboTax divisional growth from around 8% to around 7% for FY2026. On its surface the slightly lower revenue expectations look de minimis, but we had expected Intuit to exceed its prior guidance. The key investment question is whether recent market share loss reflects temporary execution issues or a structural change in competitive dynamics resulting from AI. Intuit is now trading well below our assessment of fair value. Execution will be critical and evidence of improvement will take time. Given the heightened uncertainty, the now smaller position reflects what we consider to be an appropriate balance between risk and potential return. |
| ICE | Intercontinental Exchange and Intuit each detracted from the Fund's performance by more than 1.0%. Intercontinental Exchange (ICE) is an example of a high-quality business that is not particularly AI-sensitive (positively or negatively) that we assess to be trading at a compelling valuation. ICE is trading on a forward price to earnings ratio of around 17x, a level we have not seen since the GFC. ICE has been a long-term holding of the Fund, and we have discussed the investment on many prior occasions. In our view, not much has changed. There are some market concerns around the impact AI may have on the number of people using ICE's proprietary data and analytics. We think this is a peripheral issue and unlikely to materially impact ICE. The larger market concern is that the Commodity Futures Trading Commission (CFTC), which regulates many of ICE's markets, may authorise 'perpetual' derivatives and encourage competition in products such as crypto that could compete with established regulated exchanges. Discussion on these issues is complex and rapidly turns technical. This is an area where detailed industry knowledge is critical. To simplify, we do expect pro-competition regulatory developments and, in some areas, increased competition for retail customers. Nevertheless, we continue to view ICE's core franchises as well positioned for a range of legal, regulatory and commercial reasons. ICE management is also actively partnering with and investing in participants across crypto and prediction markets, positioning the company to adapt as the regulatory framework evolves. We have modestly added to the ICE investment at a price well below our assessment of fair value. |
| CRM | Salesforce is the clear leader in its software sub-segment, is well-managed and its business economics and financial position are strong. However, we think the implications of AI are significant for Salesforce, and management will need to respond with strong execution and adjustments to the current business model. We sold into a bounce in Salesforce's share price and used the proceeds to fund the increased investment in Nvidia. |
| CDW | CDW is a leading provider of products and solutions in the information technology (IT) industry in North America and the U.K. It acts as a value-added reseller for many of the leading IT businesses. Management is executing solidly in subdued market conditions. Most of the AI implications for CDW are second-order. For example, clients may spend less on the products and solutions sold by CDW and more on AI-centric solutions. We divested CDW to fund larger investments in several high-quality businesses that are not AI sensitive and trading below our assessed fair value, thus offering a compelling investment opportunity particularly for investors who are less driven by short-term momentum and have a longer-term investment horizon. |
| AXP | We divested CDW to fund larger investments in several high-quality businesses that are not AI sensitive and trading below our assessed fair value, thus offering a compelling investment opportunity particularly for investors who are less driven by short-term momentum and have a longer-term investment horizon. Examples include American Express, Apollo Group, Danaher, HCA and ICE. |
| APO | We divested CDW to fund larger investments in several high-quality businesses that are not AI sensitive and trading below our assessed fair value, thus offering a compelling investment opportunity particularly for investors who are less driven by short-term momentum and have a longer-term investment horizon. Examples include American Express, Apollo Group, Danaher, HCA and ICE. |
| DHR | We divested CDW to fund larger investments in several high-quality businesses that are not AI sensitive and trading below our assessed fair value, thus offering a compelling investment opportunity particularly for investors who are less driven by short-term momentum and have a longer-term investment horizon. Examples include American Express, Apollo Group, Danaher, HCA and ICE. |
| HCA | We divested CDW to fund larger investments in several high-quality businesses that are not AI sensitive and trading below our assessed fair value, thus offering a compelling investment opportunity particularly for investors who are less driven by short-term momentum and have a longer-term investment horizon. Examples include American Express, Apollo Group, Danaher, HCA and ICE. |
| MSFT | Particularly attentive long-term followers of the Fund may have noticed that Microsoft is no longer among the top 10 holdings. We have rebalanced the portfolio weights between Alphabet and Microsoft. We remain comfortable with the Azure hyperscaler business of Microsoft, although we believe the business may be less well positioned compared to Alphabet's GCP and Amazon's AWS hyperscaler businesses: Microsoft is behind in developing its own chips (GPUs, CPUs, ASICs) to support AI workloads at lower cost and reduce reliance on Nvidia. Previously, Azure pulled back on some data centre investments and is now capacity constrained and more dependent on neocloud capacity for immediate needs. Azure is more OpenAI-centric and less Anthropic-centric, and recently Anthropic has been out-executing OpenAI. Azure does not just serve OpenAI and is a trusted partner of many of the largest organisations globally. We expect Azure to deliver strong growth, and sound returns on its massive capital expenditure. Microsoft is, of course, considerably more than Azure. Some businesses operated by Microsoft, such as Xbox, are struggling, while others such as the Windows operating system franchise face cyclical challenges. Microsoft 365 remains of critical importance to the Microsoft investment case and valuation, particularly the ongoing development of Copilot. Management changes have been made to improve performance. The new business head, Jacob Andreou, summarised the situation well in the highlighted quote. Microsoft needs to lift its game and execute better to clear the higher bar. |
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