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 holdings including Salesforce, Cadence Design, and Workday. The firm's underweight in traditional banks proved beneficial amid financial sector concerns, while maintaining exposure to digital payment companies. The portfolio combines resilient businesses with optionality positions focused on the analog-to-digital economic transition. Generative AI emerged as a key theme, with ChatGPT reaching 100M users faster than any app in history, prompting portfolio adjustments to favor AI beneficiaries and infrastructure providers. The firm expects semiconductor companies to benefit from increased AI spending, with AI servers requiring significantly more memory content. While acknowledging risks from interest rate policies and potential financial contagion, management believes they are closer to the end of valuation compression and expects markets to shift from macro-focused to company-centric environments. The strategy maintains its complexity investing approach, seeking companies that maximize non-zero-sum outcomes across all stakeholders.
NZS Capital focuses on companies leading the analog-to-digital transition of the global economy, combining resilient businesses with optionality positions to navigate increasing change and capitalize on AI-driven disruption.
The firm expects continued focus on interest rates, recession fears, and financial contagion risks, but believes they are closer to the end of valuation compression. They anticipate a shift from macro-focused markets to company-centric environments, with AI driving continued disruption and opportunity in semiconductor infrastructure.
As of Mar 31, 2023
Portfolio Manager and primary investment lead for NZS Capital Technology.
Moderate Conviction Bullish
Market Conviction
The manager demonstrates moderate-high conviction through specific portfolio adjustments for AI themes, clear positioning decisions like underweighting banks, and detailed thesis explanations for semiconductor infrastructure plays. However, the diversified portfolio structure and acknowledgment of multiple scenarios prevents this from reaching high conviction territory.
Growth Outlook
The manager expresses cautious optimism about markets, acknowledging they are likely closer to the end of valuation compression and expecting a shift to company-centric environments. However, they also note continued focus on recession fears and financial contagion risks, creating a mildly positive but measured outlook.
Risk Appetite
The portfolio shows selective risk-taking with adjustments to favor AI beneficiaries and infrastructure providers. The underweight in traditional banks demonstrates defensive positioning in some areas while maintaining growth exposure in technology, indicating a moderate risk appetite with tactical adjustments.
Capital Deployment
The letter describes portfolio adjustments to favor AI beneficiaries and infrastructure providers, suggesting moderate deployment activity. However, no specific cash level changes are mentioned, and the adjustments appear to be tactical rotations rather than significant net deployment of new capital.
Forward Guidance
The manager indicates selective deployment toward AI infrastructure and semiconductor opportunities while maintaining their complexity investing framework. They express intention to continue focusing on digital transition themes but acknowledge market uncertainties, showing a cautiously constructive deployment bias.
Language Signal
Language includes positive terms like 'attractive investment opportunities,' 'encouraged,' and 'thrive' balanced against risk language including 'vulnerabilities,' 'recession fears,' and 'financial contagion.' The net balance tilts slightly positive but remains measured throughout the letter.
Perceived Risk
The manager identifies multiple specific risks including interest rate policies, recession fears, financial contagion, and AI disruption of established business models. The Silicon Valley Bank collapse is cited as evidence of systemic vulnerabilities, and the discussion of companies being over-extended in rising rate environments shows meaningful risk awareness.
Opportunity Density
The manager sees selective opportunities in AI infrastructure, semiconductor equipment, and digital transition themes. They identify specific beneficiaries like TSMC, Micron, and equipment companies, while noting that many growth companies have been devalued in the bear market, suggesting a moderately rich opportunity set in defined areas.
Time Horizon
The investment philosophy explicitly focuses on long-term themes like the analog-to-digital transition of the global economy over decades. The complexity investing approach and emphasis on companies maximizing long-term outcomes for all stakeholders indicates a multi-year investment horizon, though specific catalyst timing is acknowledged for some positions.
Top Conviction Themes
Key Catalysts
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