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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
LHC Capital High Conviction Fund seeks long-term capital compounding by investing in durable, capital-light market leaders with mission-critical offerings, high switching costs, and strong free cash flow generation. During the fourth quarter of fiscal year 2026, the fund gained 4.8 percent net of fees, recovering from earlier drawdowns in quality growth equities. Performance was led by core holdings Pro Medicus, Life360, and TechnologyOne, which demonstrated robust operational execution, pricing power, and commercial momentum that contradicted prevailing market fears regarding artificial intelligence disruption. In contrast, holdings such as MA Financial, WiseTech Global, HUB24, and REA Group detracted amid elevated quarterly share-price dispersion across high-multiple businesses. Macro risks highlighted by the manager include technological disruption fears surrounding artificial intelligence coding tools, volatile energy markets, and heightened geopolitical instability. The fund remains focused on profitable, mission-critical franchises positioned to navigate or leverage artificial intelligence adoption.
Long-term outperformance is achieved by investing in mission-critical, capital-light software and platform franchises whose durable free cash flows and pricing power are temporarily mispriced by market dislocations.
The fund managers believe that the combination of improving operating performance and lower valuations across durable software and capital-light compounders provides a favorable starting point for prospective returns. They expect companies with mission-critical products, proprietary data, and deep workflow integration to demonstrate that artificial intelligence enhances their product suites, improves customer outcomes, and expands margins.
As of Jul 16, 2026
Lead Portfolio Manager
High Conviction Bullish
Market Conviction
A high conviction score of 0.82 is assigned based on the fund's explicit high-conviction mandate, concentrated core holdings, and steadfast willingness to hold through extreme volatility. The managers specifically articulate how fundamental operating gains diverge from market panic around AI disruption, backing their high-duration software positions.
Growth Outlook
The market outlook is scored at 0.65 to reflect a constructive stance on selective growth equities following severe indiscriminate selling. While recognizing macro risks such as volatile energy markets and geopolitical strife, the managers see improving operating performance and lower starting valuations as a favorable setup for prospective returns.
Risk Appetite
Risk appetite is scored at 0.75 as the fund remains net long high-beta, long-duration software and consumer franchises while actively managing risk through a short energy basket. The team maintains aggressive exposure to companies experiencing short-term price pullbacks where cash flow generation continues to expand.
Capital Deployment
Capital deployment is scored at 0.55 (net neutral to mild deployment) as the letter discusses maintaining long holdings and running tactical energy shorts without disclosing specific large cash reserves or major net liquidations.
Forward Guidance
Scored at 0.65 because the managers express a clear orientation toward accumulating durable franchises whose prices have decoupled from cash flow fundamentals, though specific new position additions are not explicitly listed.
Language Signal
Directional language leans noticeably bullish (0.72), emphasizing terms like 'opportunity,' 'compelling evidence,' 'record first-half profit,' and 'upgraded guidance,' which comfortably outweigh references to dislocation and volatility.
Perceived Risk
Perceived risk is scored at 0.58, reflecting meaningful discussion of technological disruption debates, short-term share price volatility, geopolitical uncertainty, and energy market swings without signaling systemic crisis.
Opportunity Density
Scored at 0.68 to capture the manager's perspective that market dispersion has created attractive entry points in mispriced durable compounders, even as broader market conditions require rigorous selectivity.
Time Horizon
A multi-year horizon of 0.78 is evident from the manager's focus on terminal value durability, multi-year contracts, and the compounding of growing future cash flows over full technological cycles.
Top Conviction Themes
Key Catalysts
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