| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 19% | 19% |
Militia Capital achieved 19% net returns in Q1 2026, driven by exceptional performance from portfolio managers Rodrigo (23%) and Michael (37.5%), while founder David Orr contributed 6%. The fund demonstrates superior risk-adjusted returns with a Sharpe ratio of 3.96 and maximum drawdown of only 4.69%, significantly outperforming benchmarks. This marks the final hedge fund letter as the manager shifts focus toward building a vertically integrated financial services company. The vision encompasses ETFs, tax planning, and brokerage services, powered by proprietary AI investing systems and efficient stock borrowing operations. The business will operate globally from non-autocratic countries, with key personnel identified by business partner Sam. Current portfolio managers will receive equity stakes in the new venture and help recruit talent. The multi-manager structure will continue with Rodrigo and Michael becoming partners with 90% profit share next year, eventually transitioning to full partnership status as the firm evolves beyond traditional hedge fund operations.
Militia Capital delivered strong Q1 performance through a multi-manager structure while transitioning from hedge fund letters to building a comprehensive financial services platform.
Manager plans to build a vertically integrated financial services company including ETFs, tax planning and brokerage operations, with AI-powered investing systems and efficient stock borrowing operations, operating globally from non-autocratic countries.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 8 2026 | 2026 Q1 | - | AI, Brokerage, ETFs, Multi-Manager, Partnership, Performance | - | Militia Capital posted 19% Q1 returns through superior multi-manager execution, with individual PMs delivering 23-37% performance. This final hedge fund letter announces a strategic pivot toward building a comprehensive financial services platform featuring AI-powered investing, ETFs, and brokerage services, while promoting top performers to partnership roles. |
| Jan 2 2026 | 2025 Q4 | GOTU, PARA | Assets, asymmetry, Capital Allocation, Patience, value | - | Militia delivered +64.3% net returns in 2025 through its diversified multi-manager platform. The fund is expanding with new managers and launching ETF advisory services in Austin, while exploring starting its own broker to capture the 3.25% annual revenue it generates for existing brokers, potentially saving 1%+ in costs. |
| Oct 2 2025 | 2025 Q3 | - | Correlation, fundamentals, global, Long/Short, Shorts | - | Militia Capital posted +1.9% net in Q3 versus S&P 500's +8.1% during the hardest quarter for long/short strategies since early 2021. Shorted stocks surged 25% as fundamentals disconnected from prices. The fund's avoidance of crowded shorts provided resilience, though continued pressure on shorts could drive losses in Q4. |
| Jul 14 2025 | 2025 Q2 | - | Long/Short, Multi-Manager, Performance Fees, Scale, Tax Optimization, volatility | - | Militia Capital's multi-manager structure delivered 25.7% net returns in Q2 while expanding to 40% allocation under second portfolio manager. Fund maintains small scale advantage with $67 million unrealized gains and tax-efficient strategies. Performance fee hurdle switches to risk-free rate in 2026 reflecting lower volatility profile and zero market correlation. |
| Apr 1 2025 | 2025 Q1 | - | - | - | |
| Jan 25 2025 | 2024 Q4 | - | - | - | |
| Jan 25 2025 | 2024 Q3 | - | - | - | |
| Jun 29 2024 | 2024 Q2 | - | - | - | |
| Mar 16 2024 | 2024 Q1 | ARKK, IWM | alpha, Correlation, Hedge Fund, Long/Short, Multi-Manager, risk management | - | Militia Capital's multi-manager transformation is working exceptionally well, with uncorrelated strategies delivering 13.2% returns while improving risk metrics. The new PM provides negative correlation during speculative surges, boosting combined Sharpe ratios. Generous partnership terms are attracting top talent for a platform designed to scale alpha generation with reduced drawdowns. |
| Jan 11 2024 | 2023 Q4 | 3765.T | Bankruptcies, Buybacks, gaming, Japan, Long/Short, value | 3765.T | Militia Capital's long/short strategy delivered +15.3% in 2023 with negative beta positioning. The fund capitalizes on Japanese value opportunities trading at 10x earnings and profits from shorting distressed companies into bankruptcy. With 175% long and 95% short exposure, the strategy is positioned to outperform in weak markets while struggling if equity rallies continue. |
| Sep 30 2023 | 2023 Q3 | NFLX | AI, Factor Investing, Leverage, Long/Short, volatility | - | Militia Capital's long/short strategy delivered strong Q3 performance despite earlier challenges from persistent strength in speculative stocks driven by AI hype. Manager reduced leverage and maintains conviction that volatile cash-burning shorts will head to zero over medium term, while keeping defensive positioning until market environment normalizes. |
| Jan 4 2023 | 2023 Q1 | ET, IMKTA, SYF | Banking, credit, financials, Long/Short, retail, value | - | Militia Capital's Q1 performance lagged despite successful bank shorts due to speculative stock strength. Manager sees opportunity in undervalued financials like Synchrony Financial and defensive grocers like Ingles Markets, both trading at 6x earnings. Fund closed to new money at $50M AUM, positioned for reversal when speculation fades and quality value stocks recover. |
| May 1 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Capital MarketsManager discusses the broker business opportunity extensively, analyzing how broken incentives at major brokers led to $10 billion in losses from Bill Hwang. Militia generates 3.25% of AUM annually in high-quality revenue for brokers through commissions, financing, and short borrowing costs. The fund plans to potentially start its own broker to capture these economics and pass savings to investors. |
Brokers Prime Brokerage Clearing Financial Services Intermediation |
ETFsMilitia is building an ETF advisory business as a ~10 employee operation that will serve as backbone for potential expansion into clearing broker business. Sam is the business partner leading this initiative with a new Austin office. This represents a strategic diversification into asset management infrastructure. |
ETF Advisory Asset Management Financial Infrastructure | |
| 2025 Q3 |
Risk AppetiteThe quarter was characterized by extreme risk appetite as the most shorted stocks jumped almost 25% in a single quarter, creating a challenging environment for long/short fundamental equity strategies. Stock prices and fundamentals became disconnected far more often than normal. |
Shorts Fundamentals Disconnection Crowded Environment |
| 2025 Q2 |
ETFsManager discusses potential tax advantages through ETF conversions as a strategy to defer taxes into oblivion, utilizing explicit government carve-outs for tax optimization. |
Tax Optimization Conversions Deferrals |
| 2024 Q1 |
Risk ManagementThe fund is implementing a multi-manager strategy with uncorrelated portfolio managers to reduce risk and drawdowns. The new PM strategy shows negative correlation of -0.15 overall, with stronger negative correlation during key market moments of -0.5 or greater. This approach aims to maintain strong returns while reducing volatility and scaling better than single-manager strategies. |
Correlation Drawdowns Multi-manager Beta Volatility |
| 2023 Q4 |
JapanMilitia had 25% long exposure to Japan for most of 2023 with many 5% positions performing well. Japanese companies are obviously cheap on the numbers with companies growing earnings 10% per year trading for 10x earnings. Japan is encouraging public companies to increase shareholder returns through shame lists, buyout programs, and incentivizing foreign hedge funds. |
Buybacks Value Shareholder Returns |
Credit StressA tidal wave of bankruptcies continues as predicted one year ago. The fund shorted a couple dozen companies into bankruptcy this year, winning around 15%. This tailwind could last at least through the end of 2024 as interest rates dropping moderately won't save terrible, indebted companies. |
Bankruptcies Distressed Interest Rates | |
GamingTop pick is Gung Ho Entertainment, a video game company that bought back half its shares in the last decade. It trades for $165 million enterprise value and earns $150 million per year. The setup is great because of heavy buybacks and even if buybacks stop, it's hard to lose too much. |
Buybacks Value Entertainment | |
| 2023 Q3 |
AIManager notes that charlatan management of worst companies reliably lean into AI hype this year, contributing to sustained flows into junky stocks. AI represents one of the new big technologies causing speculative investment flows. |
Artificial Intelligence Hype Technology |
VolatilityFund runs with key factor mismatch being long low to medium volatile companies and short very volatile ones. Manager explains this positioning causes autocorrelation in performance and creates challenges when volatile companies persistently outperform. |
Market Volatility Factor Exposure Risk Management | |
| 2023 Q1 |
Regional BanksManager shorted all 4 failed banks (SI, SIVB, SBNY, CS) and caught drops in FRC and PACW. Believes bank runs were rational as depositors left banks with real problems. Fed emergency program allows banks to borrow against held-to-maturity assets. |
Banking Credit Deposits Fed |
Credit CardsSynchrony Financial is top long candidate specializing in credit card lending with partners like Amazon and Lowes. Trades at 6x earnings with 85% FDIC insured deposits, pays 3.5% on deposits, owns no long duration debt, and has 10% loan loss reserve vs 7% actual losses in 2008. |
Consumer Finance Credit Lending | |
GrocersIngles Markets is a southeastern supermarket chain trading at 6x earnings with low debt and property ownership. Family controlled business with CEO who started as store clerk. Bears claim over-earning due to covid but earnings grew pre-covid and work-from-home trends support grocery sales. |
Retail Food Value |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Dec 30, 2023 | Fund Letters | Militia Capital | 3765.T | GungHo Entertainment | Communication Services | Interactive Media & Services | Bull | Tokyo Stock Exchange | entertainment, Japan, low valuation, Share Buybacks, technology, Value, Video games | Login |
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