| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | 15.7% |
Legacy Ridge returned 15.7% net in 1H26, benefiting from its concentrated portfolio of US energy infrastructure and airlines. The Iran War created two distinct narratives: early in the year, AI disruption fears favored hard assets like the fund's energy and airline holdings, which cannot be easily replicated by technology. Then the war shut in 15-20% of global oil supply, yet Brent peaked at only $126 versus $200+ forecasts before returning near $80. Despite the market's indifferent reaction, the manager views US energy assets as materially more valuable given their reliability premium, with exports at record levels and multi-year investment cycles underway. For airlines, higher fuel volatility is improving industry discipline—Spirit Airlines liquidated due to unsustainable unit economics, marking the seventh consolidation since 2008 and validating the failure of the ULCC model. The portfolio now holds just 8 companies plus meaningful cash, with the manager incrementally more excited about positioning and patiently waiting for opportunities.
Legacy Ridge owns a highly concentrated portfolio of 8 US energy and airline companies positioned to benefit from structural tailwinds: energy assets gain from record US hydrocarbon exports and a reliability premium versus disrupted Middle Eastern supply, while airlines benefit from improved capacity discipline driven by Spirit's liquidation and the fuel volatility that constrains irrational expansion.
The manager is incrementally more excited about owning US energy assets than at the start of the year, viewing them as seemingly more valuable to the world given their reliability premium versus Middle Eastern alternatives. For airlines, the manager expects higher fuel prices and volatility to continue benefiting supply/demand dynamics and pricing, though this requires taking a view beyond the current year. The portfolio remains highly concentrated with meaningful cash, patiently waiting for things to get really fun at some point.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 20 2026 | 2026 Q2 | ALGT, EQT, PAA | Airlines, Concentration, energy, Iran War, Midstream, Natural Gas, oil, US Exports |
ALGT PAA |
Legacy Ridge's concentrated bet on US energy infrastructure and airlines is paying off as geopolitical chaos validates the reliability premium of American hard assets. The Iran War disrupted 15-20% of global oil supply while Spirit's liquidation proves fuel volatility enforces airline capacity discipline. With only 8 holdings and significant cash, the manager sees US energy as the arsenal of democracy and airlines benefiting from rational supply. |
| Jan 30 2026 | 2025 Q4 | AAPL, AMZN, GOOGL, KRP, META, MNR, MSFT, NVDA, PII, PLTR, TSLA | Capital Allocation, Cash, dividends, energy, Exploration & Production, value | MNR | Legacy Ridge maintains 30% cash amid expensive markets, focusing on dividend-paying energy companies with strong capital allocation. Portfolio yields 6% while avoiding overvalued tech stocks. Key holdings Mach Natural Resources and Kimbell Royalty Partners offer 19.3% and 10.8% yields respectively. Positioned defensively for market correction opportunities. |
| Jul 21 2025 | 2025 Q2 | PII | Airlines, Buybacks, Capital Allocation, energy, Pipelines, value |
PII PII |
Legacy Ridge's concentrated energy and airline strategy faced headwinds in 1H25 but maintains strong positioning with 22% cash and resilient pipeline exposure. New Polaris investment represents classic value opportunity with mismanaged but fundamentally sound business trading at 15-year lows. Diverging valuations between growth and value create favorable setup for patient capital deployment. |
| Jan 31 2025 | 2024 Q4 | AAL, CEG, DAL, JBLU, KMI, LUV, NRG, RYAAY, SAVE, TLN, UAL, VST | Airlines, Capital Cycle, Concentration, energy, Midstream, Power Generation, value | - | Legacy Ridge exited power generation winners after 700%+ gains, concerned about supply overbuilding, and rotated into beaten-down airlines expecting capacity discipline to drive multi-year earnings recovery. The concentrated fund maintains capital cycle discipline, avoiding popular investments while targeting sectors where capital withdrawal creates opportunity. Elevated cash provides flexibility for future deployment. |
| Jul 29 2024 | 2024 Q2 | AMZN, EQT, ETRN, LLY, META, MSFT, NRG, NVDA, SMLP, VST | Concentration, energy, Midstream, Natural Gas, Power Generation, value |
VST SMLP EQT |
Legacy Ridge delivered 19.7% net returns through concentrated energy investments, trimming Vistra after AI-driven gains eliminated margin of safety. The fund maintains 30% cash amid limited opportunities while positioning in restructuring midstream assets and acquiring low-cost natural gas exposure through EQT merger, expecting to exploit commodity price volatility. |
| Jan 31 2024 | 2023 Q4 | CEG, CEQP, ENGH, ET, ETRN, SO, VST | Concentration, energy, nuclear, Power Generation, Utilities, value | BOAVSTB BZ | Legacy Ridge delivered 28% net returns through concentrated energy infrastructure investing, led by nuclear power generator Vistra Corp. The fund capitalizes on energy security themes and grid reliability challenges, finding assets trading at massive discounts to replacement costs. Despite strong performance, managers maintain conviction in further upside while positioning more defensively with higher cash levels. |
| Jul 28 2023 | 2023 Q2 | ETRN | - | - | |
| Jan 31 2023 | 2022 Q4 | DCP, EPD, NRG, SMLP, VST | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AirlinesHigher fuel prices and volatility from the Iran War are improving industry supply/demand dynamics. Spirit Airlines liquidated due to unsustainable unit economics, marking the seventh airline consolidation since 2008. The ULCC business model has unraveled as major carriers introduced unbundled fares and capital became more expensive, leading to healthier capacity discipline across the industry. |
Air Travel Fuel Consolidation Capacity ULCC |
OilThe Iran War shut in 15-20% of global oil supply and drained inventories by nearly a billion barrels, yet Brent peaked at $126 versus forecasts of $200+. Despite returning to near pre-war prices around $80, the manager views US energy assets as more valuable given their reliability compared to Middle Eastern supply. US hydrocarbon exports are at record levels as the country serves as the arsenal of democracy for energy-importing allies. |
Oil Iran Exports Supply Geopolitics | |
MidstreamUS midstream infrastructure is benefiting from record hydrocarbon exports and multi-year investment cycles. Plains All American raised capex guidance by 21%, signaling higher Permian production growth. Energy Transfer announced 240mbpd ethane export capacity increases supported by long-term commitments extending into the 2040s. The reliability premium for US energy infrastructure has increased materially versus Middle Eastern alternatives. |
Pipelines LNG Exports Infrastructure Capex | |
Natural GasThe global LNG market shifted from a 0.5 Bcf/d deficit before the Iran conflict to a 3.5 Bcf/d deficit by April 2026. More importantly, the 2027-2028 outlook changed from a 1.5 Bcf/d surplus to a slight deficit. QatarEnergy continues pausing production restart at Ras Laffan, the world's biggest LNG export plant, with force majeure extended beyond August and a multi-year timeline to bring capacity back online. |
LNG Supply Qatar Deficit Exports | |
AIAI threatened business models in accounting, insurance, advertising, online travel, banking, and SaaS during the first two months of 2026, causing hard assets to become popular. The manager concluded that for the next several years, their portfolio of airlines and energy infrastructure is not threatened by AI beyond extreme scenarios like people living entirely in virtual worlds or AI driving unprecedented global energy efficiency. |
Technology Disruption Business Models | |
| 2025 Q4 |
AIManager draws parallels between today's AI-driven market concentration and the 2014-15 oil collapse, warning that AI has become a macroeconomic assumption embedded in capital expenditure plans and valuations. Physical constraints like energy intensity and grid limitations complicate AI scalability assumptions. |
Artificial Intelligence Data Centers Valuations Energy Infrastructure Technology |
EnergyEnergy plays a critical role in AI infrastructure economics through data center power consumption. Rising electricity prices and grid constraints in data-center-heavy regions are compressing margins and extending deployment timelines, creating physical bottlenecks to AI scaling. |
Electricity Data Centers Grid Infrastructure Power Pricing Utilities | |
Small CapsThe Small Cap Strategy returned 6.21% gross versus Russell 2000's 12.81% return. Manager likes the current portfolio fundamentals with strong balance sheets and resilient cash flows, though markets haven't rewarded fundamentals on a linear schedule requiring continued patience. |
Russell 2000 Value Investing Fundamentals Portfolio Management | |
| 2025 Q2 |
PipelinesBy far the biggest exposure continues to be to energy, specifically oil & gas pipelines. Pipeline fundamentals will prove resilient due to strong natural gas and natural gas liquids volumes. The holding period for the two biggest positions, both pipeline companies, is well over 5 years and any opportunity to add to them at 8%+ yields will be capitalized on despite already being close to 30% of fund assets. |
Natural Gas NGLs Midstream Energy |
AirlinesTook some airline chips off the table early in the year before cracks started to form in the demand environment, but that sector was still a drag on performance. Supply continues to exit the system so fundamentals will be quite strong once issues weighing on consumers and the economy start to improve. Have taken the opportunity to restructure the airline position and improve the risk/reward over the next couple of years. |
Air Travel Airlines Travel Supply | |
BuybacksPolaris has spent $2.4 billion on share repurchases since 2014 yet has only retired 17% of diluted shares outstanding. The issue is procyclical repurchases - highest dollar amounts spent during 2018-2022 when average prices were $134, $109, $106, $114 respectively. Management spent the least in 2019, 2020, 2024 when share prices were low. Today they could retire 20% of shares if they spent the same amount yet share repurchases doesn't make an appearance on the latest Capital Deployment Strategy slide. |
Share Repurchases Capital Allocation Valuation | |
| 2024 Q4 |
AirlinesAirlines sector experienced classic bullwhip effect post-COVID but is now showing signs of recovery with capacity discipline emerging. Industry consolidation and rationalization since 2009 has improved economics, with capacity growth at decade lows and management commentary suggesting multi-year earnings improvement similar to 2012-2014 period. |
Capacity discipline Consolidation Recovery Pricing power Capital allocation |
Independent Power ProducersIPPs benefited from AI-driven power demand expectations that exceeded stable demand projections, leading to significant stock appreciation. However, supply-side expansion concerns and volatile demand estimates create risks of overbuilding similar to early 2000s, prompting exit from positions. |
Power demand AI infrastructure Supply expansion Valuation compression Electricity generation | |
MidstreamNatural gas midstream benefits from data center power demand growth with estimates of 28 bcf/day demand increase by 2030. Capital spending remains below historical peaks but is expected to increase to meet infrastructure needs for growing hydrocarbon demand. |
Natural gas Pipeline infrastructure Data centers Capital spending Energy infrastructure | |
BuybacksShare repurchases are viewed as preferred form of capital deployment, particularly for airlines where management should repurchase meaningful amounts when markets get silly. United Airlines specifically committed to more regular cash returns to shareholders. |
Capital allocation Shareholder returns Value creation Cash deployment Management discipline | |
| 2024 Q2 |
Independent Power ProducersThe fund has been invested in IPPs like NRG and VST since 2018, with VST being their largest position entering 2023 and 2024. The AI narrative and implications for electricity demand drove VST from $26 to $107, causing the margin of safety to dissipate. The manager believes more data centers will be built requiring base load energy, and the US will likely be short base load energy. |
Power Generation Electricity Demand Data Centers Base Load AI |
MidstreamThe fund owns Summit Midstream Partners (SMLP) which is restructuring its business and balance sheet under Heath Deneke's leadership. The company divested $700mn of assets, added long-term contracts to the Double E pipeline, and announced a C-corp conversion. Total net obligations are down 63% in 4 years with leverage declining from 5.4x to 4x. |
Pipeline Natural Gas Restructuring Leverage Take-or-Pay | |
Natural GasThe fund will become owners of EQT through the ETRN acquisition, gaining exposure to the top natural gas producer in the US with a dominant Appalachian Basin position. With natural gas prices volatile and back in the low-$2s, the manager sees opportunity to exploit volatility over time and potentially increase the position size. |
Gas Producers Appalachian Basin Price Volatility Low Cost Producer Secular Demand | |
| 2023 Q4 |
NuclearNuclear power is experiencing a revival in the US with federal support through production tax credits. The fund views nuclear assets as significantly undervalued compared to replacement costs, citing Vogtle's $34 billion construction cost versus VST's acquisition of Energy Harbor at a 93% discount. Nuclear generation provides reliable baseload power that becomes increasingly valuable as grid stability challenges grow. |
Nuclear Energy Harbor Vogtle Production Tax Credit Baseload |
Energy SecurityEnergy security has become paramount following crises like the Russian invasion of Ukraine and Winter Storm Uri in Texas. The fund emphasizes how energy disruptions force countries to delay nuclear shutdowns and restart coal plants, highlighting the critical importance of reliable, non-intermittent power sources for economic prosperity and national security. |
Energy Security Grid Reliability Winter Storm Uri Ukraine Power Disruptions | |
Power GenerationThe merchant power sector benefits from increasing power scarcity and volatility as renewable intermittency creates reliability challenges. VST and similar companies are positioned to benefit from higher power prices driven by supply-demand imbalances, with the fund noting power disruptions increased 650% from 2000 to 2020. |
Power Generation Merchant Power Power Scarcity Grid Stability Electricity Prices |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 20, 2026 | Fund Letters | Legacy Ridge Capital | ALGT | Allegiant Travel Company | Airlines | Airlines | Bull | NASDAQ | Airlines, Capacity Discipline, consolidation, Cyclical, Equity, Fuel Costs, Hard assets, Industry Rationalization, merger, US | Login |
| Jul 20, 2026 | Fund Letters | Legacy Ridge Capital | PAA | Plains All American Pipeline | Oil & Gas Midstream | Oil & Gas Storage & Transportation | Bull | NASDAQ | capex growth, energy infrastructure, Energy security, Equity, Hard assets, Hydrocarbon Exports, midstream, Permian Basin, Pipelines, US | Login |
| Jan 30, 2026 | Fund Letters | Kris Kelley | MNR | Mach Natural Resources LP | Energy | Oil & Gas Exploration & Production | Bull | New York Stock Exchange | capital allocation, cashflow, dividends, energy, Pdp | Login |
| Jul 21, 2025 | Fund Letters | Kris Kelley | PII | Polaris Inc. | Consumer Discretionary | Leisure Products | Bull | New York Stock Exchange | buybacks, capital allocation, Powersports, Sum-of-the-Parts, turnaround | Login |
| Jul 20, 2025 | Fund Letters | Legacy Ridge Capital | PII | Polaris Inc. | Consumer Discretionary | Leisure Products | Bull | NYSE | ATVs, boats, capital allocation, Consumer Discretionary, Cyclical, Dealership Network, Manufacturer, market leader, Motorcycles, Off-Road Vehicles, Powersports, Snowmobiles, turnaround, Value | Login |
| Jul 21, 2024 | Fund Letters | Legacy Ridge Capital | VST | Vistra Corp | Utilities | Independent Power and Renewable Electricity Producers | Neutral | NYSE | Artificial Intelligence, Base Load Energy, data centers, electricity generation, Free Cash Flow, Independent Power Producer, Share Buybacks | Login |
| Jul 21, 2024 | Fund Letters | Legacy Ridge Capital | SMLP | Summit Midstream Partners LP | Energy | Oil, Gas & Consumable Fuels | Bull | NYSE | Asset Divestiture, Balance sheet restructuring, Double E Pipeline, Leverage reduction, Management Quality, midstream energy, take-or-pay contracts, turnaround | Login |
| Jul 21, 2024 | Fund Letters | Legacy Ridge Capital | EQT | EQT Corporation | Energy | Oil, Gas & Consumable Fuels | Bull | NYSE | Appalachian Basin, Commodity Exposure, Cyclical Energy, Free Cash Flow, Low-cost producer, Merger Arbitrage, Natural Gas Producer, shareholder returns | Login |
| Jan 27, 2024 | Fund Letters | Legacy Ridge Capital | BOAVSTB BZ | Vistra Corp | Utilities | Independent Power and Renewable Electricity Producers | Bull | NYSE | acquisition, cash flow, Electricity Markets, Energy security, Grid Reliability, Nuclear Power, Nuclear PTC, Power generation, utilities, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| ALGT | We owned both Sun Country Airlines (SNCY) and Allegiant Travel (ALGT), which consummated a merger in the second quarter. ALGT was the purchasing entity, and a majority of the purchase price was in ALGT shares. While we'll greatly miss having Sun Country CEO Jude Bricker run one of the businesses we own, we like the idea of both companies coming together and think Allegiant's management team will do a good job integrating both, so we rolled over all of our shares into the merged company. |
| PAA | Plains All American Pipeline (PAA – owned) raising their capex guidance by 21% for this year, signaling likely higher Permian production growth versus prior estimates. |
| EQT | Natural gas producer EQT tried to put a finer point on the numbers as they relate to the global LNG market specifically. They estimate the market has gone from a 0.5 Bcf/d deficit before the conflict started to a 3.5 Bcf/d deficit (as of the end of April) for 2026. But more importantly has gone from a 1.5+/- Bcf/d surplus in 2027 and 2028, to now a slight deficit. |
| 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 | |||
