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 |
|---|---|---|---|---|---|---|
Orbis International Equity returned 12.1% net in Q2 2026 versus the benchmark's 14.5%, navigating an exceptionally challenging quarter for stockpickers where the winner ratio hit its lowest reading since 1988. The market was led by a narrow cohort of AI winners, and while the Strategy benefited from holdings like Nebius—an AI cloud infrastructure business with multibillion-dollar deals with Microsoft and Meta—the manager is growing cautious about AI ecosystem economics and valuation exuberance. Credit spread analysis reveals investor risk appetite at historical extremes comparable to the TMT and 2007 credit bubbles. In response, the portfolio is being reoriented toward assets with narrower outcome distributions trading at clear discounts, including BBB Foods, a Mexican discount retailer with a compelling growth runway to 15,000 stores at 40%+ returns on invested capital. The manager acknowledges the Strategy will lag if AI concentration continues, but remains committed to valuation discipline and absolute risk management, patiently hunting for mispricings in healthcare and consumer staples while the broader market crowds into a single theme.
In an exceptionally narrow market led by AI winners where risk appetite has reached historical extremes, the manager is deliberately diversifying away from crowded themes toward mispriced opportunities with narrower outcome distributions, particularly in discount retail, healthcare, and consumer staples, prioritizing absolute risk management and valuation discipline over benchmark tracking.
The manager expects continued challenges if the market remains narrowly focused on AI beneficiaries, acknowledging the Strategy will likely lag in such an environment. However, they remain committed to valuation discipline and absolute risk management rather than tracking error minimization. They are patiently hunting for mispricings in areas the market is ignoring, particularly in healthcare and consumer staples with narrower outcome distributions, believing this approach will protect and grow capital over the long term despite potential near-term underperformance.
As of Aug 11, 2026
The fund is managed by a highly experienced team led by President Adam Karr, who holds degrees from Northwestern University and Harvard Business School and has been with Orbis since 2002. Graeme Forster joined as Director in 2022 with advanced degrees from Oxford and Cambridge plus CFA designation. Benjamin Preston has been directing capital in the strategy since 2000 with Oxford mathematical sciences background and CFA. Nick Purser leads currency management with advanced degrees from Cambridge and Oxford plus CFA. The team operates within a firm founded in 1989 by Allan W.B. Gray, managing $34 billion globally with offices across major financial centers including London, Vancouver, Sydney, San Francisco, Hong Kong, Tokyo, and Luxembourg.
Lead Portfolio Manager
Timo Smuts
Managing Partner
Moderate Conviction Bullish
Market Conviction
The manager demonstrates moderate-to-high conviction through detailed analysis of specific holdings like Nebius (with precise revenue projections to $50 billion and valuation work) and BBB Foods (specific store count targets, ROIC estimates north of 40%, and decade-long return projections). However, the portfolio appears diversified rather than concentrated, with multiple themes discussed and no indication of extreme concentration in a handful of names. The manager uses some hedging language around AI economics ('wide distribution of outcomes') and acknowledges uncertainty, which prevents this from reaching high conviction territory. The specificity of analysis on individual names combined with clear portfolio rotation decisions supports a score in the moderate-high range.
Growth Outlook
Market outlook remains low conviction: Orbis outperformed in volatile Q1 2026 through disciplined contrarian positioning. Semiconductor winners from AI boom offset healthcare losers from regulatory pressures and financi...
Risk Appetite
Risk appetite posture is moderate conviction: Orbis outperformed in volatile Q1 2026 through disciplined contrarian positioning. Semiconductor winners from AI boom offset healthcare losers from regulatory pressures and financi...
Capital Deployment
The manager is engaged in capital rotation rather than net deployment or de-risking. They trimmed AI exposure including Nebius but are selectively adding in areas like BBB Foods, healthcare, and consumer staples. No cash level changes are disclosed, and the language suggests rebalancing within the portfolio rather than raising or deploying significant cash. The rotation from AI to value-oriented names with narrower outcome distributions represents tactical repositioning, scoring slightly negative due to the trimming of winners and cautious tone, but close to neutral given the offsetting additions.
Forward Guidance
Forward guidance signal: Orbis outperformed in volatile Q1 2026 through disciplined contrarian positioning. Semiconductor winners from AI boom offset healthcare losers from regulatory pressures and financi...
Language Signal
The letter contains significantly more risk-oriented language than bullish language. Terms like 'exceptionally challenging,' 'caution,' 'exuberance,' 'risk tolerance,' 'bubble,' and 'irresponsible' dominate the macro discussion. While there is bullish language around specific holdings like BBB Foods ('compelling,' 'attractive,' 'opportunity'), the overall directional language balance tilts bearish with warnings about market conditions, AI valuations, and excessive risk-taking.
Perceived Risk
Perceived risk level is evaluated as moderate conviction. Orbis outperformed in volatile Q1 2026 through disciplined contrarian positioning. Semiconductor winners from AI boom offset healthcare losers from regulatory pressures and financi...
Opportunity Density
The manager describes a selective opportunity environment. While they struggle to find compelling ideas in the AI-dominated market and note the difficulty of the quarter for stockpickers, they are finding specific opportunities in healthcare, consumer staples, and discount retail like BBB Foods. The language emphasizes selectivity and patience ('hunting for mispricings') rather than abundance, but they do identify concrete ideas with detailed analysis. This suggests a moderate opportunity set requiring careful selection rather than scarcity or abundance.
Time Horizon
The manager demonstrates a multi-year investment horizon with specific examples. For BBB Foods, they project returns 'over the next decade' and discuss a growth pathway 'over the coming decade' to 15,000 stores. For Nebius, they reference management's pathway to 2031 for data center capacity. The language emphasizes long-term value creation and protecting capital 'over the long term' rather than near-term catalysts. However, they do acknowledge some near-term events like the BBB Foods lock-up expiring in August 2026, and the quarterly reporting structure suggests some attention to medium-term milestones. The emphasis on decade-long projections and patient capital supports a score in the 0.70-0.75 range.
Top Conviction Themes
Key Catalysts
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