| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Montaka delivered their Q4 2025 letter emphasizing their focus on long-duration market inefficiencies despite 2025 underperformance. The year was characterized by dramatic AI-driven changes and significant return dispersion, with more than one-third of S&P 500 stocks delivering negative returns despite strong overall market performance. The manager made strategic portfolio adjustments, adding to undervalued positions like Meta Platforms, enterprise software leaders ServiceNow and Salesforce, and payment processors while reducing winners like Alphabet and Tencent. They initiated a new position in lithium producer Albemarle, viewing it as an asymmetric value play on an impending supply shortage. The letter extensively discusses AI's transformative impact on global competition for scarce resources, geopolitical tensions, and rising inequality. Despite acknowledging significant macro risks including fragmenting democracies and youth unemployment, Montaka remains optimistic about their portfolio positioning, noting the risk-adjusted upside has improved to levels not seen for quite some time.
Montaka focuses on identifying and owning global opportunities which are beneficiaries of long-term structural change and are highly-advantaged, as equity markets routinely undervalue businesses with the potential to grow their earnings power sustainably over extended time horizons.
The manager is optimistic about opportunities ahead and the strength of their investment approach in identifying long-term winners. They see substantial risk-adjusted upside in the portfolio today and continue to see significant opportunity with many transformations remaining early in their trajectories and many beneficiary businesses becoming cheaper over recent months.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 31 2026 | 2025 Q4 | 0700.HK, ALB, AMZN, BX, CRM, FND, GOOGL, KKR, MA, MDB, META, MOGL.AX, MSFT, NOW, ORCL, REA.AX, SPGI, SPOT, U, V | AI, Cloud, geopolitics, Lithium, software, technology, value |
ALB FND NOW BX KKR |
AI is driving dramatic transformation and propelling stock prices higher. The manager sees AI as creating enormous capital investments in data centers and driving growth in LLM tokens north of 200% per annum. They believe AI will increase cloud computing TAM to $2 trillion per annum over the next 10 years. The manager sees high probability of an impending lithium supply shortage as prices have been too low to incentivize new production capacity. They added Albemarle as an asymmetric value investment, expecting a price squeeze driven by electric vehicle batteries and industrial-scale Battery Energy Storage Systems demand. Enterprise software leaders like ServiceNow and Salesforce have been sold off on AI disruption narratives. The manager believes these companies have scale advantages in R&D, customer distribution, and customer data that favor them in the AI transition, making them significantly undervalued after 2025 declines. Alternative asset managers like Blackstone and KKR declined in 2025 despite strong fundamentals. The manager sees cyclical upswing potential as M&A returns, asset realisations follow, and private wealth channel growth continues. They assess the future looks bright for these businesses. |
| Nov 7 2025 | 2025 Q3 | DASH, FND, MC FP, MDB, SPOT, TCEHY | FreeCashFlow, global, moats, Quality, Resilience | - | Montaka focuses on high-quality global franchises with durable competitive advantages and strong free cash flow. The fund stresses patience through drawdowns as long-term fundamentals outweigh short-term sentiment shifts. Quality remains investable as capital concentrates in resilient business models. |
| Jul 24 2025 | 2025 Q2 | BX, FND, KKR, SPOT | Concentration, fundamentals, Global Equities, Long-Term Growth, Pricing Power | FND | The commentary centers on a concentrated global portfolio of exceptional businesses with long-duration growth and pricing power. Management emphasizes patience, fundamental research, and ignoring short-term macro noise. Returns are driven by owning a small number of enduring compounders. |
| Jan 7 2025 | 2024 Q4 | GOOG, MC FP, MDB, NOW, SPGI | - | - | |
| Oct 17 2024 | 2024 Q3 | AMZN, BX, FND, MA, NOW | - | - | |
| Jul 30 2024 | 2024 Q2 | - | - | - | |
| Apr 27 2024 | 2024 Q1 | AAPL, AMD, BX, KD, MC FP, WMT | - | - | |
| Jan 28 2024 | 2023 Q4 | BX, KKR, MC FP, OR FP, SPGI, V | - | - | |
| Oct 19 2023 | 2023 Q3 | - | - | - | |
| Aug 8 2023 | 2023 Q2 | - | - | - | |
| Apr 12 2023 | 2023 Q1 | AMD, BAC, GOOG | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Alternative Asset ManagersMA Financial is viewed as an alternative asset manager experiencing strong momentum across its platform, particularly in Asset Management which drives long-term shareholder value. The company has invested ahead of the curve to build scalable operating platforms, with operating leverage becoming evident as revenues scale over a largely fixed cost base. |
Asset Management Operating Leverage Scalable Platforms Fee-earning Assets Financial Services | |
LithiumFull Circle Lithium emerged as a unique play in lithium fire suppression technology, manufacturing FCL-X for extinguishing lithium-ion battery fires with strong sales channel development and rapid scaling expectations. |
Lithium Battery Fire Safety Technology | |
SoftwareBravura Solutions provides mission-critical software to financial institutions globally with high switching costs. The company was acquired by interests connected to Constellation Software's playbook of buying sticky software businesses. |
Software Financial Services Mission Critical Switching Costs Constellation | |
| 2025 Q3 |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position |
| 2025 Q2 |
ConcentrationFive companies now represent roughly 30% of the S&P 500's market cap. The top 10 exceed 40%—the highest concentration in 50 years. Nearly $340 billion flowed into U.S. deals, yet it was packed into the fewest deals of the decade, with nearly half the capital concentrated in a few dozen deals over $500 million. |
Market Capital Risk Deals Venture |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 31, 2026 | Fund Letters | Andrew Macken | ALB | Albemarle Corporation | Materials | Specialty Chemicals | Bull | New York Stock Exchange | Batteries, Commodities, energy storage, Lithium, renewables, Supply Shortage | Login |
| Jan 31, 2026 | Fund Letters | Andrew Macken | FND | Floor & Decor Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | New York Stock Exchange | Flooring, Housing, operating leverage, Specialty retail, valuation | Login |
| Jan 31, 2026 | Fund Letters | Andrew Macken | NOW | ServiceNow, Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | Agentic, Automation, enterprise, Subscriptions, switching costs, Workflow | Login |
| Jan 31, 2026 | Fund Letters | Andrew Macken | BX | The Blackstone Inc. | Financials | Asset Management & Custody Banks | Bull | New York Stock Exchange | Alternatives, Fees, Fundraising, M&A, Private Credit, Realizations | Login |
| Jan 31, 2026 | Fund Letters | Andrew Macken | KKR | KKR & Co. Inc. | Financials | Asset Management & Custody Banks | Bull | New York Stock Exchange | Alternatives, Carry, Fundraising, M&A, Private Credit, Realizations | Login |
| Jul 24, 2025 | Fund Letters | Andrew Macken | FND | Floor & Decor Holdings, Inc. | Consumer Discretionary | Specialty Stores | Bull | New York Stock Exchange | Flywheel, Hard Flooring, Housing, retail, scale | Login |
| TICKER | COMMENTARY |
|---|---|
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| ALB | A new position in mandatory convertible securities of lithium producer Albermarle made a sizable contribution as well. Lithium prices rose due to reduced supply from China, and market participants became more optimistic about the metal's potential use in energy storage applications. |
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| BX | Blackstone declined. The world's leading alternative asset managers, such as Blackstone, also declined in 2025. We also right-sized our positions in Blackstone – both of which remain in Montaka's top 10. |
| CRM | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| FND | Floor & Decor (FND) is a business I've wanted to own shares in for some time. They are the leading warehouse-style flooring store with higher in-stock inventory selection and lower prices than scaled competitors, and have been taking market share for years if not decades. In my opinion, they are following the Home Depot model to disrupt a profitable subcategory of home improvement. I still believe the current purchase price is not obviously cheap on near-term earnings, but the purchase price does reflect an attractive valuation on long-term margins. The company's current EBIT margins are about 30% below their long-term pre-COVID levels, and I believe EBIT margins should continue to scale towards the low-to-mid-teens as the company builds out its store base. Current sales per store are depressed by a post-COVID hangover and higher interest rates which have depressed existing home sales, a key catalyst for renovation activity. Higher sales per store will lead directly to higher store-level margins, which flow nicely through to EBIT margins. I believe, with a more favorable existing home sales macro backdrop, that sales can grow at double digits with significant flow-through to the bottom line. It would not surprise me to look a couple years out and see the company generating $6.5B of sales at 7.0% net margins, which would mean the company is trading at 16x that admittedly uncertain (due to macro uncertainty) future earnings with nearly a decade of future store growth and comp growth. I see the company generating nearly $12 earnings per share 10 years from now, when it's store growth plan should be essentially complete. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| KKR | Over the prior two years, KKR was one of the Fund's strongest contributors. From the end of 2022 through the end of 2024, the shares more than tripled, rising roughly 80% in 2023 and another 80% in 2024, as the market began to recognize the earnings power of its asset-management and insurance platforms. This year, the stock told a different story: in 2025 it was down about 13% and was roughly 23% below its January peak. Strip away the stock-price swings, and the business itself has continued to grow. Fee-related earnings, insurance earnings, and long-dated capital have all moved higher, even as market sentiment toward rates, credit, and capital flows into alternatives has become more cautious. |
| 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 |
| MDB | Top 3 contributors to absolute performance: GOOGL, AAPL, MDB |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NOW | In the case of ServiceNow, the stock weakened following reports of a potential large acquisition while the company has also been challenged by bearish sentiment across the software as a service or SAAS segment. |
| ORCL | Investor enthusiasm for Oracle's stock in calendar year 2025 was initially driven by several multi-billion-dollar contracts it signed with leading AI companies, including OpenAI and Meta. However, in Q4 sentiment for ORCL's growth prospects shifted to skepticism, as investors began to scrutinize the return profile of the substantial capital investments required to support the approximately $500 billion of contracts signed by Oracle. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| REA.AX | In contrast, the Fund's largest detractors were Pro Medicus, REA Group and WiseTech Global, which declined by 11.5%, 20.3% and 43.3% respectively. |
| SPGI | Leading rating agency and data provider S&P Global Inc. contributed to performance. Shares rebounded from a pullback in September that stemmed from a competitor's cautious commentary around market demand and margins. S&P Global alleviated these concerns by delivering strong third quarter results and raising its full-year financial guidance. |
| SPOT | Spotify is the world's leading audio streaming platform. Third-quarter results showed continued operating progress, with users increasing 11% to 713 million and subscribers growing 12% to 281 million. Meanwhile, operating income expanded to a mid-teens margin, alongside a record quarterly free cash flow. Despite the momentum, the shares weakened as investors reset near-term margin expectations. Spotify has been a top contributor to long-term Fund performance, and we remain confident that pricing, product innovation, advertising efficiency, and an expanding ecosystem can continue to widen margins over time, as reinforced this quarter by the launch of Spotify recommendations within ChatGPT. |
| U | Unity Software had big one-year gains. |
| V | There were companies there such as Visa, which we own, as well as many we do not, and which would not likely be appropriate for this mandate. |
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