| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 20.06% | 12.8% | 15.85% |
Night Watch Investment Management delivered 12.80% net returns in Q2 2026, bringing year-to-date performance to 15.85% and since-inception CAGR to 20.06%. The fund's largest position, Marex, appreciated 37% in the quarter and 230% since initial purchase, benefiting from market volatility and successful M&A execution in prime brokerage. The manager is exploiting severe market bifurcation where AI-related stocks trade at unsustainable levels while quality compounders with decade-long track records of 10-15% earnings growth are being sold off indiscriminately. Night Watch added positions in Stryker, Adyen, and Booking.com, moving up the quality spectrum while maintaining discipline around stock-based compensation. The fund took profits in memory stocks like Western Digital and Silicon Motion despite strong AI-driven performance, recognizing their cyclical nature. Core position Watches of Switzerland Group is executing well following tariff removal, with US growth reaccelerating to 24%. The portfolio remains concentrated in overlooked sectors with structural tailwinds including aerospace aftermarket, futures commission merchants, and payments, providing strong diversification from major indices while compounding capital at over 20% annually with minimal drawdowns.
Night Watch is capitalizing on extreme market bifurcation by buying quality compounders with proven 10-15% earnings growth that have been indiscriminately sold off in favor of AI stocks trading at unsustainable levels, while maintaining concentrated positions in overlooked sectors with structural tailwinds including aerospace aftermarket, capital markets, and payments.
The manager expects continued market bifurcation between AI-related stocks and everything else, viewing this as an opportunity to acquire quality businesses at attractive valuations. They anticipate that when markets normalize, their portfolio of quality compounders should benefit from both earnings growth and multiple expansion. The fund remains focused on executing its disciplined strategy of allocating to sectors with structural tailwinds that are largely overlooked by the broader market.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 11 2026 | 2026 Q2 | ADYEN.AS, BKNG, FUTU, MRX, SIMO, SNWV, SYK, WDC, WOSG.L | aerospace, AI, Capital markets, global, Luxury, payments, Quality, value |
MRX WOSG.L |
Night Watch delivered 12.80% in Q2 by exploiting market bifurcation, buying quality compounders sold off for AI stocks while taking profits in cyclical memory positions. Marex surged 37% on volatility and M&A execution. The fund added Stryker, Adyen, and Booking.com at depressed valuations while Watches of Switzerland accelerates post-tariff removal. Concentrated positions in overlooked aerospace, capital markets, and payments drive 20% annual compounding with low volatility. |
| Apr 1 2026 | 2026 Q1 | AIR, BKD, CPA, MRX.L | catalysts, Counter-cyclical, defense, Geopolitical, global, value, volatility |
BKD AIR MRX.L CPA |
Night Watch delivered 2.69% in volatile Q1 2026 by owning counter-cyclical businesses that benefit from uncertainty. Strong performance from Brookdale senior living, AAR aerospace maintenance, and Marex futures clearing. Portfolio positioned to withstand geopolitical risks while benefiting from demographic trends, defense spending, and market volatility rather than trying to time unpredictable events. |
| Jan 5 2026 | 2025 Q4 | ALLFG, DAVA, DSGR, HAYPP, MRX, WDC | catalysts, global, insider ownership, Rerating, value |
MRX DAVA |
Night Watch delivered strong 2025 performance through catalyst-driven value investing, with Haypp and Marex as top contributors. The fund maintains defensive positioning given US economic headwinds while building international exposure in Brazil and Japan. They await clearer consumer recovery signals before increasing cyclical exposure, focusing on aerospace aftermarket, defensive sectors, and unique opportunities with strong insider ownership and rerating catalysts. |
| Oct 2 2025 | 2025 Q3 | 5842.T, AIR, BKD, BX, DSGR, ENDV.L, GOGO, HAYP.ST, KKR, MRX.L, NE, STX, TDW, VAL, WDC, XFAB.DE | AI, catalysts, Europe, global, Japan, private equity, small caps, value |
BKD US WDC US 5842 JP |
Night Watch delivered strong Q3 performance of 4.28% through catalyst-driven value investing but grows increasingly cautious on US markets due to deteriorating fundamentals and regulatory interference. The fund is pivoting toward international opportunities, particularly in Europe and Asia, while adding defensive healthcare positions and maintaining cash discipline around free cash flow valuations. |
| Jul 1 2025 | 2025 Q2 | 1126.HK, AAR, CWH, HAYPP.ST, MRX.L, RELY, XFAB.PA | catalysts, E-Commerce, global, semiconductors, tariffs, value, volatility |
RELY CWH MRX LN 1126 HK MRX.L HAYPP.ST XFAB.PA 1126.HK |
Night Watch delivered 23.31% Q2 returns through catalyst-driven value investing in unique global opportunities. Strong performance from Haypp, X-FAB, and Marex offset tariff-related repositioning. Counter-cyclical positioning and insider-owned companies with earnings inflections drive the strategy. Rich pipeline of new opportunities supports continued outperformance expectations. |
| Apr 2 2025 | 2025 Q1 | 1405.HK, AIR, ALLFG.AS, BDL, COOP, DKNG, DSGR, HAYPP.ST, MXNS.L, UAL, XFAB.DE | catalysts, diversification, global, small cap, value | 1405.HK | Night Watch's global value strategy declined 2.11% in Q1 amid market volatility but benefited from international diversification. The fund exited GDP-sensitive positions due to Trump policy uncertainty while adding to defensive growth names. Geographic diversification across expensive US markets, recovering European markets, and cheap Chinese markets undergoing economic transition provides downside protection and upside optionality. |
| Jan 2 2025 | 2024 Q4 | 1126.HK, 2318.HK, AER, AL, ALLFG.AS, AMRK, ATRO, DSGR, JOE, MELE.BR, MRX.L, RELY, UAL, VAL, XFAB.PA | aerospace, catalysts, China, energy, Europe, global, Onshoring, value | - | Night Watch delivered 10.30% in 2024 through catalyst-driven global value investing across eight themes. Despite offshore energy headwinds, the fund successfully pivoted within aerospace and expanded into European quality names and Chinese stimulus plays. Strong insider alignment (66% of positions) and unique holdings provide differentiated exposure to long-term trends including onshoring and energy transition. |
| Oct 1 2024 | 2024 Q3 | 1126.HK, 2318.HK, ATRO, BC, BLDR, DSGR, JOE, LEG, SEG, VAL, XFAB.PA | Automotive, catalysts, energy, global, Offshore, semiconductors, value | XFAB.PA | Night Watch delivered 7.40% in Q3 through concentrated global value investing with catalyst focus. Portfolio positioned for semiconductor cycle recovery via X-FAB and offshore energy through Valaris despite near-term headwinds. Added opportunistic positions in Seaport Entertainment spinoff and Leggett & Platt following dividend cut. Strong insider ownership across holdings provides alignment with management interests. |
| Jul 1 2024 | 2024 Q2 | ASML, ATRO, BC, CWH, DSGR, JOE, NE, NVO, TDW, VAL | aerospace, consumer, energy, Europe, Housing, Offshore Drilling, value | VAL | Night Watch runs a concentrated global value strategy with Valaris as the largest holding, positioned to benefit from offshore drilling recovery. The fund maintains exposure to cyclical consumer and housing names near trough valuations while reducing aerospace risk. European positioning provides diversification opportunities from post-election selloffs and competitive labor advantages. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager views AI-related stocks as trading at unsustainable levels despite benefiting from early positions in memory stocks like Western Digital and Silicon Motion. They acknowledge the cyclical nature of AI-driven businesses and have been taking profits. The manager is actively avoiding AI losers and views the AI trade as creating a bifurcated market where quality non-AI businesses are being sold off indiscriminately. |
Memory Data Centers Semiconductors Cyclical Valuation |
PaymentsThe manager is constructive on payment companies, particularly those with low stock-based compensation. They added Adyen to the portfolio, highlighting its comparative advantage from having employees in Amsterdam where SBC is taxed excessively. The theme represents 14.8% of portfolio weight across 3 positions, indicating meaningful conviction in the space despite recent sell-offs in the sector. |
Adyen FinTech Netherlands SBC | |
LuxuryWatches of Switzerland Group is a core position since inception and has been a conviction long. The manager views the business as considerably higher quality than ordinary retailing due to supply constraints from Rolex allocations. With tariffs now removed, the company is executing its proven playbook with 24% US growth. Despite strong performance, shares trade at 13x next year's earnings and remain a conviction long. |
Watches Rolex Retail Supply Constrained | |
AerospaceAerospace represents 15.0% of portfolio weight across 4 positions, making it the second-largest thematic allocation. The manager specifically mentions the aerospace aftermarket as a sector with structural tailwinds that is largely overlooked by the market. AAR Corp is the second-largest position at 7.3% of the portfolio. |
Aftermarket Defense AAR Corp | |
QualityThe manager is actively buying quality compounders with decade-long histories of 10-15% earnings growth that have been sold off in favor of AI stocks. They view this as an opportunity to lock in low-risk 15% earnings growth with potential multiple expansion when markets normalize. Recent additions include Stryker, Adyen, and Booking.com, representing a move up the quality spectrum. |
Compounders Earnings Growth Multiple Expansion Valuation | |
Capital MarketsMarex is the largest position at 13.7% and has been an outsized winner, up 37% in the quarter and 230% since initial purchase. The company benefits from high market volatility while executing well on M&A, particularly growing its prime brokerage business. Trading at 10x 2026 P/E with over 30% ROE, the manager views this as a compelling long despite the strong performance. |
Marex Prime Brokerage Volatility M&A | |
| 2026 Q1 |
DefenseAAR Corp provides after-market maintenance services for airplanes and benefits from aging fleet dynamics. Government defense contracts now represent 30% of their business and are growing at 50% rate. The company benefits from multi-year industry tailwinds and any potential war is mildly beneficial to their earnings. |
Defense Spending Aerospace Government Contracts Military Maintenance |
VolatilityMarex clears futures on behalf of clients and benefits enormously from current market volatility. When trading activity in oil, precious metals, or financial products picks up, Marex makes more money. The company has grown earnings 7-fold over the last 5 years despite trading at 8-9x P/E versus 13-14x for closest peer StoneX. |
Capital Markets Volatility Futures Trading Financial Infrastructure | |
AerospaceAAR Corp benefits from an aging fleet of airplanes caused by Boeing's and Airbus' inability to satisfy industry demand. The company is transforming from low value add heavy maintenance of airframes to higher margin component repair and distribution services. This represents a multi-year industry tailwind combined with company transformation. |
Aerospace Aircraft Maintenance Component Repair Aviation Services Fleet Aging | |
| 2025 Q4 |
ValueNight Watch manages a global value strategy that differentiates on catalyst-driven investments, insider ownership, and unique names. They seek value companies with identifiable catalysts for rerating and aim to provide diversification from typical wealth management portfolios. |
Catalyst Rerating Insider Ownership |
AerospaceThe fund maintains large exposure to the aerospace aftermarket given that the global fleet of airplanes is aging and demand for maintenance will continue to grow. AAR Corp is among their largest positions at 8.6%. |
Aftermarket Maintenance Fleet | |
SemiconductorsWestern Digital Corp benefited from a large memory shortage driven by AI data center investments, with shares up over 200% since purchase. However, the manager is scaling down given historically short and violent memory cycles. |
Memory AI Data Centers Cycles | |
HousingThe housing basket has shifted to niche sectors such as senior living facilities and companies that benefit from a rebound in existing home sales. St Joe is a top 5 position at 6.4% weight. |
Senior Living Home Sales | |
| 2025 Q3 |
ValueNight Watch manages a global value strategy focused on catalyst-driven opportunities with insider ownership and unique names. The fund seeks value companies with identifiable catalysts for rerating, including industry tailwinds or company-specific events. They aim to differentiate from typical value strategies through unique portfolio holdings with little overlap to wealth management portfolios. |
Catalyst Rerating Insider ownership Unique names Differentiation |
AIThe fund initiated positions in tech companies benefiting from AI-related spending, including Western Digital Corp as a pure play on hard disk drives. They believe AI infrastructure spending will prove cyclical and settle below current levels, limiting involvement to outliers where the market was late to recognize positive earnings impact. |
Infrastructure Data centers Storage Cyclical Earnings | |
JapanNight Watch initiated their first Japanese position in Integral KK, a private equity manager. They highlight massive changes in Japanese corporate governance driven by Tokyo Stock Exchange requirements. Japanese Private Equity offers advantages including lower acquisition multiples, greater operational improvement opportunities, and cheap debt compared to US and Europe. |
Corporate governance Private equity Acquisition multiples Operational improvement Tokyo Stock Exchange | |
Private CreditThe fund invested in Integral KK, a Japanese private equity manager similar to Blackstone or KKR that charges 2%/20% fees. Integral raised twice as much capital for their 5th flagship fund, growing Assets under Management by 135% overnight. The business model has historically been more lucrative for PE managers versus investing in PE funds directly. |
Asset management Fee structure Fund raising Assets under management Performance fees | |
Senior CareNight Watch reinitiated a position in Brookdale Senior Living, citing strong fundamentals as baby boomers turn 80+ starting next year. The industry overbuilt in 2017, was hit by Covid and nursing shortages, but construction has halted while demand is about to increase. An activist shareholder successfully replaced management, giving confidence to re-enter the position. |
Demographics Baby boomers Occupancy Management change Activist | |
| 2025 Q2 |
SemiconductorsX-FAB Silicon Foundries manufactures analog semiconductors for automotive, industrial and medical applications. The company is recovering from automotive destocking cycle and has completed $1B capex program that should materially add to earnings in 2026. Management owns 25% and has been buying shares. |
Automotive Analog Foundries Capex Recovery |
E-commerceHaypp operates the largest e-commerce platform for nicotine pouches with a defensible moat due to advertising restrictions. The company benefits from rapid growth in new markets like the US and shift to online purchasing, trading at attractive 10x 2026 EV/EBITDA. |
Nicotine Platform Moat Growth Regulation | |
Trade PolicyTrump Administration implemented tariffs on all imports in April, freezing global trade before reversing course. The fund repositioned based on tariff impacts, selling Remitly due to remittance tax exposure and adding to Camping World which benefits from RV tax deductibility. |
Tariffs Remittance Tax Positioning Legislation | |
Capital MarketsMarex operates as a Futures Commission Merchant benefiting from industry consolidation and volatility. The company outperforms during high volatility periods through increased volumes, wider spreads, and higher margin interest income, making it attractive during market panic. |
FCM Volatility Consolidation Futures Margins | |
| 2025 Q1 |
ValueNight Watch manages a global value strategy focused on companies with identifiable catalysts for rerating, insider ownership, and unique names that differentiate from typical wealth management portfolios. The fund seeks value companies trading at reasonable valuations with improving businesses and good management teams. |
Catalyst Rerating Insider ownership Unique names Reasonable valuations |
ChinaChina has undergone a major economic transition from construction-driven growth to exports of EVs and high-speed trains. The economy has bottomed after 5 years of property deflation, with government stimulus measures introduced since October 2024. The fund focuses on Chinese consumer sector and companies returning capital to shareholders. |
Economic transition Consumer spending Government stimulus Capital returns Bottomed | |
EuropeEuropean markets appreciated as Germany realized fiscal discipline held back economic growth since the Great Financial Crisis. Increased defense spending plans support GDP growth. The fund focuses on entrepreneurial companies with clear strategies, avoiding inefficient conglomerates, preferring management teams with aligned interests. |
Fiscal spending Defense spending Entrepreneurial Management alignment Avoid conglomerates | |
E-commerceHaypp operates as the dominant e-commerce platform for nicotine pouches like Zyn. Despite regulatory headwinds in Q4, Haypp reported its strongest quarter ever, benefiting from a more diverse customer base and new competing products to Zyn entering the market. |
Nicotine pouches Regulatory headwinds Diverse customer base Market dominance Profitability improvement | |
| 2024 Q4 |
EnergyOffshore energy exposure was the largest detractor in 2024, but the thesis remains unchanged. The move from oil & gas production in Western countries to offshore regions like Brazil and Western Africa creates supply/demand mismatch. Day rates for floating rigs have increased from $200k to $500k, though H2 2024 saw a pause due to shortages in subsea equipment and FPSOs. |
Offshore Drilling Oil Valaris Day Rates Supply Chain |
AerospaceBoeing and Airbus production challenges created opportunities in the supply chain initially, then shifted focus to airplane ownership. Boeing's safety incidents and union strikes slowed production while maintaining supplier orders, building inventories. The team pivoted from supply chain to United Airlines, betting on capacity constraints improving margins. |
Airlines Boeing Airbus Aircraft Leasing Capacity | |
EuropeExtreme bearishness on European economy allows buying quality European businesses at value prices. Despite negative outlook on Europe's anti-capitalist direction, European skilled labor is competitive given weak euro. Focus on exporters with labor as primary input cost, including automotive semiconductors and fund distribution platforms. |
European Union Quality Value Semiconductors Euro | |
ChinaOutlook changed in September 2024 when China indicated intent to stimulate economy and stop stock market decline. Government actively stimulating share repurchases shows boosting stock market has become national priority. Expanded Chinese holdings focusing on names benefiting from higher consumer spending, following Japan's shareholder-friendly reform model. |
China Stimulus Buybacks Consumer Finance Government Policy | |
OnshoringLong-term trend of reshoring activities from Asia to USA driven by low energy prices and tariffs. Industrial activity declined due to slowing economy and destocking cycle, but trend may revive under President Trump. Preferred exposure through Distribution Solutions Group, co-investing alongside CEO who owns 77% through family office. |
Onshoring Industrial Policy Distribution Trump Tariffs | |
| 2024 Q3 |
Semiconductor CycleX-FAB is positioned to benefit from the expected bottoming of the semiconductor cycle after 4-6 quarters of downturn. Order intake has turned sharply higher since Q1 with book-to-bill of 1.2x in both quarters. The automotive sector is expected to return to growth in Q4 with industrial and medical recovering during 2025. |
Automotive Foundries Analog Semiconductors Cyclical Recovery Order Intake |
Offshore DrillingValaris operates in offshore energy where day rates rose from $200k to $500k per day over 3 years due to strong demand. However, supply chain bottlenecks in FPSO units and subsea equipment are expected to cause demand to flatline for 2-4 quarters until addressed. |
Energy Day Rates Supply Chain FPSO Subsea | |
OnshoringEuropean exporters with labor as a large input cost are becoming more competitive due to high energy prices weakening the euro, creating what the manager calls Reverse Dutch Disease. This benefits companies like X-FAB with skilled European labor becoming more cost-competitive. |
Europe Labor Costs Currency Manufacturing Competitiveness | |
Electric VehiclesThe number of semiconductor chips per car is growing 14-16% annually through 2030 with modern cars containing 1000-3000 chips. Despite EV sales decline in Europe and US, this is offset by growing EV production in China and hybrid cars requiring similar chip content. |
Automotive Semiconductors China Hybrid Content Growth | |
| 2024 Q2 |
Offshore DrillingValaris is the largest offshore drilling company globally, positioned to benefit from growing offshore oil demand in Brazil and Western Africa. Day rates have risen from $200k to $500k per day as the market has tightened, with the company expected to generate $1.65B in free cash flow at current rates. |
Offshore Drilling Oil Valaris Day Rates |
HousingThe fund maintains exposure to housing-related companies despite rate cut delays and sector selloffs in Q2. The manager believes the sector is closer to a bottom than peak and continues to build positions when the Fed indicated fewer rate cuts than expected. |
Housing Rates Consumer Cyclical Bottom | |
ConsumerConsumer names have been in a downturn for 1-2 years and are viewed as closer to bottom than peak. The fund plays this theme through Brunswick and Camping World Holdings, which have gained market share to offset cyclical decline, buying category winners at low multiples of trough earnings. |
Consumer Cyclical Market Share Trough Brunswick | |
AerospaceThe fund reduced aerospace exposure by selling Montana Aerospace due to Boeing and Airbus production target misses. While airplane production should continue ramping until 2030, Boeing's inventory buildup creates downside risk if 737 Max production doesn't ramp as expected. |
Aerospace Boeing Production Inventory Risk | |
EuropeEuropean stocks sold off after parliament elections, but the manager believes this creates company-specific opportunities. Europe benefits from Inverse Dutch Disease with cheap skilled labor making companies like ASML and Novo Nordisk competitive globally while paying wages in euros. |
Europe Elections Labor Competitiveness ASML |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 11, 2026 | Fund Letters | Night Watch Investment Management | MRX | Marex | Capital Markets | Investment Banking & Brokerage | Bull | NASDAQ | Brokerage, financials, high ROE, M&A growth, market volatility, Prime Brokerage, Value | Login |
| Jul 11, 2026 | Fund Letters | Night Watch Investment Management | WOSG.L | Watches of Switzerland Group | Luxury Goods | Specialty Stores | Bull | London Stock Exchange | consolidation, Luxury Retail, Patek Philippe, Rolex, Specialty Stores, Supply Constrained, UK, US, Value | Login |
| Apr 1, 2026 | Fund Letters | Night Watch Investment Management | BKD | Brookdale Senior Living Inc. | Medical Care Facilities | Health Care REITs | Bull | New York Stock Exchange | Activist Catalyst, Baby Boomers, Demographics, healthcare, Management Change, Real Estate, Senior Living, Supply Shortage | Login |
| Apr 1, 2026 | Fund Letters | Night Watch Investment Management | AIR | AAR Corp. | Aerospace & Defense | Aerospace & Defense | Bull | New York Stock Exchange | Aerospace, aftermarket services, Aging Fleet, Aircraft Maintenance, business transformation, Component Repair, defense contracts | Login |
| Apr 1, 2026 | Fund Letters | Night Watch Investment Management | MRX.L | Marex Group plc | Other | Investment Banking & Brokerage | Bull | New York Stock Exchange | Commodities, Counter-cyclical, Financial infrastructure, Futures Clearing, market volatility, multi-bagger, valuation discount | Login |
| Apr 1, 2026 | Fund Letters | Night Watch Investment Management | CPA | Copa Holdings S.A. | Airlines | Airlines | Bear | New York Stock Exchange | Airlines, Fuel Exposure, geopolitical risk, Latin America, oil prices, Travel Normalization, Venezuela | Login |
| Jan 5, 2026 | Fund Letters | Roderick van Zuylen | MRX | Marex Group plc | Financials | Capital Markets | Bull | NASDAQ | Brokerage, Derivatives, resilience, ROE, valuation | Login |
| Jan 5, 2026 | Fund Letters | Roderick van Zuylen | DAVA | Endava plc | Information Technology | IT Services | Bull | New York Stock Exchange | AI, Itservices, Margins, turnaround, valuation | Login |
| Oct 2, 2025 | Fund Letters | Roderick van Zuylen | BKD US | Brookdale Senior Living Inc. | Health Care | Senior Housing | Bull | NYSE | Activism, aging, Demographics, healthcare, Occupancy, Real Estate, turnaround | Login |
| Oct 2, 2025 | Fund Letters | Roderick van Zuylen | WDC US | Western Digital Corp. | Information Technology | Data Storage | Bull | NASDAQ | AI, data centers, duopoly, Margin recovery, semiconductors, spin-off, Storage | Login |
| Oct 2, 2025 | Fund Letters | Roderick van Zuylen | 5842 JP | Integral KK | Financials | Private Equity | Bull | NYSE | AUM growth, Governance, Japan, private equity, shareholder alignment, Transparency, valuation | Login |
| Jul 1, 2025 | Fund Letters | Roderick van Zuylen | RELY | Remitly Global, Inc. | Financials | Consumer Finance | Bull | NASDAQ | Fintech, Immigration, Regulation, Remittances, Taxation | Login |
| Jul 1, 2025 | Fund Letters | Roderick van Zuylen | CWH | Camping World Holdings, Inc. | Consumer Discretionary | Specialty Stores | Bull | New York Stock Exchange | consumer, Cyclicals, retail, RVs, Taxation | Login |
| Jul 1, 2025 | Fund Letters | Roderick van Zuylen | MRX LN | Marex Group plc | Financials | Capital Markets | Bull | New York Stock Exchange | Clearing, Commodities, Derivatives, Interest, Volatility | Login |
| Jul 1, 2025 | Fund Letters | Roderick van Zuylen | 1126 HK | Dream International, Ltd. | Consumer Discretionary | Leisure Products | Neutral | New York Stock Exchange | manufacturing, tariffs, Toys, valuation, Vietnam | Login |
| Jul 1, 2025 | Fund Letters | Night Watch Investment Management | MRX.L | Marex | Financials | Capital Markets | Bull | London Stock Exchange | Capital markets, Commodities Trading, Counter-cyclical, energy, FCM, Futures Commission Merchant, FX Futures, market maker, Volatility | Login |
| Jul 1, 2025 | Fund Letters | Night Watch Investment Management | HAYPP.ST | Haypp | Consumer Staples | Tobacco | Bull | Nasdaq Stockholm | consumer staples, Data Insights, e-commerce, growth, Moat, Nicotine pouches, Regulatory Moat, Sweden, Tobacco Alternatives | Login |
| Jul 1, 2025 | Fund Letters | Night Watch Investment Management | XFAB.PA | X-FAB Silicon Foundries | Information Technology | Semiconductors & Semiconductor Equipment | Bull | Euronext Paris | Analog Semiconductors, automotive, Belgium, CapEx cycle, Cyclical Recovery, Foundry, insider buying, small-cap, turnaround, Value | Login |
| Jul 1, 2025 | Fund Letters | Night Watch Investment Management | 1126.HK | Dream International | Consumer Discretionary | Leisure Products | Neutral | Hong Kong Stock Exchange | collectibles, Cost advantage, Disney, dividend yield, Funko, Hong Kong, net cash, Toy Manufacturing, Value, Vietnam | Login |
| Apr 2, 2025 | Fund Letters | Night Watch Investment Management | 1405.HK | DPC Dash | Consumer Discretionary | Restaurants | Bull | Hong Kong Stock Exchange | China, Consumer Discretionary, expansion, franchise, growth, Hong Kong, Pizza, Restaurant, retail, ROIC | Login |
| Oct 1, 2024 | Fund Letters | Night Watch Investment Management | XFAB.PA | X-FAB Silicon Foundries | Information Technology | Semiconductors & Semiconductor Equipment | Bull | Euronext Paris | Analog Foundry, automotive, capacity expansion, Cyclical, Equity, Europe, EV Components, insider ownership, semiconductors, Value | Login |
| Jul 1, 2024 | Fund Letters | Night Watch Investment Management | VAL | Valaris | Energy | Oil & Gas Drilling | Bull | NYSE | Cyclical Recovery, Day-rates, energy, Free Cash Flow, offshore drilling, Oil & Gas, Replacement Cost, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| MRX | Last quarter we mentioned that our shareholding in Marex (MRX) had grown to be an outsized position in our portfolio, at 14.5%. This paid off this quarter, with the stock up 37% in the quarter, and 230% since we bought our first shares around the IPO two years ago. The company is benefitting from high market volatility, while simultaneously showing great execution on their M&A playbook, most notably by continuing to grow their prime brokerage business. At 10x 2026 P/E and >30% ROE, this remains a compelling long. |
| WOSG.L | Watches of Switzerland Group (WOSG LN) has been a core position since our inception in 2024. It has been a somewhat frustrating investment for the first two years, but more recently the stars have started to align. WOSG is a retailer of luxury watches, most notably an authorized dealer of Rolex and Patek Philippe. This business is considerably higher quality than ordinary retailing because it is supply-constrained rather than demand-constrained. Prospective buyers often have to join waiting lists for popular models, and the number of watches a retailer sells is determined largely by the allocation it receives from Rolex rather than by end-market demand. Rolex, in turn, is owned by the Hans Wilsdorf Foundation, a non-profit organization that appears to be at least as interested in preserving its Swiss legacy as it is in maximizing profits. The business model over the last few decades has been straightforward. Rolex consolidated the sale of its watches among a small group of trusted partners with the financial strength to invest millions in dedicated Rolex stores and the ability to provide a consistent customer experience across locations. WOSG was the consolidator in the UK. In exchange for accepting slightly lower gross margins, it received larger allocations from Rolex. Higher volumes per store more than offset the lower margins. Following its success in the UK, WOSG replicated the model in the United States, which today accounts for roughly 50% of revenue. Luxury watch sales peaked in 2021, and demand for brands other than Rolex and Patek Philippe slowed. We initiated a position in early 2024 after the resulting decline in the share price. Unfortunately, WOSG faced another setback when the United States imposed 39% tariffs on Swiss imports. We feared the economics of the business could deteriorate sharply. Rolex boutiques are difficult to repurpose, and passing through a 39% price increase, even in the luxury segment, seemed like a tall order. We were patient. Switzerland was unlikely to be singled out as the root-cause of the US trade imbalance forever. And in a worst case, the tariffs would likely accelerate the consolidation in the industry, benefiting the strongest players. With tariffs now finally in the rear-view mirror, WOSG is finally back to executing its proven playbook. US growth re-accelerated to 24%. The UK is steady at 5% growth. The balance sheet is underleveraged. Despite the strong move-up, shares are trading at 13x next year's earnings. WOSG remains a conviction long. |
| SIMO | Performance this quarter was further aided by strong performance of names such as Watches of Switzerland Group (WOSG LN) and Silicon Motion (SIMO). We were early on Western Digital Corp (WDC) and we still own Silicon Motion (SIMO). Both benefitted from the shortage in memory caused by strong demand from AI data centers. But we are not blind to the cyclical nature of those businesses, and we have been early in taking some chips off the table. |
| FUTU | We owned two noticeable detractors: FUTU (FUTU) and Sanuwave (SNWV). We have been adding aggressively to FUTU, while we are waiting for improving data points before risking more capital on SNWV. |
| SNWV | We owned two noticeable detractors: FUTU (FUTU) and Sanuwave (SNWV). We have been adding aggressively to FUTU, while we are waiting for improving data points before risking more capital on SNWV. |
| WDC | We were early on Western Digital Corp (WDC) and we still own Silicon Motion (SIMO). Both benefitted from the shortage in memory caused by strong demand from AI data centers. But we are not blind to the cyclical nature of those businesses, and we have been early in taking some chips off the table. |
| SYK | Naturally, we are buyers of such businesses. If we can find low risk ways to lock in 15% earnings growth, and if we might even get some multiple expansion on top when markets normalize, we are happy to move up on the quality spectrum. We added quality names including Stryker (SYK), Adyen (ADYEN NA) and Booking.com (BKNG). |
| ADYEN.AS | Naturally, we are buyers of such businesses. If we can find low risk ways to lock in 15% earnings growth, and if we might even get some multiple expansion on top when markets normalize, we are happy to move up on the quality spectrum. We added quality names including Stryker (SYK), Adyen (ADYEN NA) and Booking.com (BKNG). Historically, Dutch companies have paid out little to no SBC. This is not by accident. Stock options or grants in The Netherlands are taxed excessively, making this not a viable option for companies. While that's a shame for Dutch employees, it benefits shareholders of those companies. Companies with international operations, who have a large portion of their employees in places like Amsterdam, have a comparative advantage. BKNG and ADYEN fit that bill. For the first time since inception, Night Watch is going Dutch. We added BKNG and ADYEN to the portfolio. |
| BKNG | Naturally, we are buyers of such businesses. If we can find low risk ways to lock in 15% earnings growth, and if we might even get some multiple expansion on top when markets normalize, we are happy to move up on the quality spectrum. We added quality names including Stryker (SYK), Adyen (ADYEN NA) and Booking.com (BKNG). Historically, Dutch companies have paid out little to no SBC. This is not by accident. Stock options or grants in The Netherlands are taxed excessively, making this not a viable option for companies. While that's a shame for Dutch employees, it benefits shareholders of those companies. Companies with international operations, who have a large portion of their employees in places like Amsterdam, have a comparative advantage. BKNG and ADYEN fit that bill. For the first time since inception, Night Watch is going Dutch. We added BKNG and ADYEN to the portfolio. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||
