The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
NZS Capital's Growth strategy returned 16% in Q1 2023, outperforming the benchmark's 7.11% return, driven primarily by technology sector gains of 26%. The firm welcomed Brett Larson to the investment team and crossed $2B in assets under management. Technology leaders Salesforce, Cadence Design, and Workday were top contributors, along with consumer discretionary names Amazon, MercadoLibre, and Airbnb. The portfolio's underweight in traditional banks proved beneficial amid financial sector concerns. The firm adjusted positioning to capitalize on AI opportunities, viewing semiconductors as crucial infrastructure for an AI-enabled future. TSMC, Nvidia, and Micron are positioned to benefit from increased AI server demand requiring significantly more memory content. While markets remain focused on interest rates and recession fears, NZS believes valuation compression may be nearing an end, favoring a shift toward company-specific fundamentals. The firm maintains its focus on companies leading the analog-to-digital economic transition through their Resilient and Optionality framework.
NZS Capital focuses on companies leading the analog-to-digital transition of the global economy, combining Resilient businesses with narrow outcome ranges and Optionality businesses with wider ranges of outcomes, believing this approach is well-suited for navigating the increasing pace of technological change.
The firm expects the market will remain focused on interest rates, recession fears, and financial contagion risk, but believes they are likely closer to the end of interest-rate-driven valuation compression. They anticipate a shift from macro-focused markets to more company-centric environment, remaining focused on building a portfolio balancing Resilient and Optionality positions in companies leading the analog-to-digital transition.
As of Mar 31, 2023
Co-founded in 2019 by Brad Slingerlend and Brinton Johns, veteran technology investors with over two decades of experience managing the Janus Henderson Global Technology and Innovation Strategies fund. The employee-owned firm operates with a flat organizational structure designed to promote intellectual honesty and eliminate cognitive biases. The team has expanded strategically with former Janus Henderson colleagues and maintains a collaborative, partnership-based approach to investment decision-making.
NZS Capital's investment philosophy centers on 'Non Zero Sumness,' derived from game theory, emphasizing win-win outcomes for all stakeholders. Their proprietary 'Complexity Investing' framework applies complex adaptive systems thinking to portfolio construction, dividing holdings into 'Resilience' businesses with narrow outcome ranges and stable fundamentals, and 'Optionality' businesses representing disruptors with asymmetric risk-reward profiles. This dual approach aims to capture upside from technological transformation while maintaining downside protection through company quality and position sizing.
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
The letter demonstrates moderate-high conviction through specific named positions, clear portfolio adjustments for AI themes, and detailed thesis explanations for semiconductor infrastructure plays, though positions are not heavily sized or concentrated.
Growth Outlook
The manager acknowledges ongoing market focus on interest rates, recession fears, and financial contagion but expresses cautious optimism that valuation compression may be ending and markets could shift to company-centric focus.
Risk Appetite
The portfolio shows selective risk-taking with strategic adjustments for AI opportunities and maintained underweight in traditional banks, indicating moderate risk appetite with tactical positioning changes.
Capital Deployment
The manager made selective portfolio adjustments to favor AI beneficiaries and infrastructure providers, indicating modest net deployment activity without significant cash level changes mentioned.
Forward Guidance
The manager plans to continue building their balanced portfolio approach while remaining focused on the analog-to-digital transition theme, showing selective deployment bias but with measured expectations.
Language Signal
Language includes both opportunity-focused terms around AI and digital transition alongside risk acknowledgment of macro uncertainties, resulting in moderately positive but balanced directional language.
Perceived Risk
The manager identifies multiple specific risks including interest rate policies, recession fears, financial contagion, and vulnerabilities from cheap money era, with detailed discussion of Silicon Valley Bank collapse as example of systemic risks.
Opportunity Density
The manager sees attractive opportunities in AI infrastructure, semiconductor supply chain, and companies leading digital transition, with specific examples of reshoring and high-tech infrastructure investment opportunities.
Time Horizon
The investment approach explicitly focuses on long-term themes like the decades-long analog-to-digital transition, with emphasis on building portfolio for long-term investors and navigating increasing pace of change over time.
Top Conviction Themes
Key Catalysts
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