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 |
|---|---|---|---|---|---|---|
As of Oct 28, 2026
Palm Harbour Capital delivered a net return of +4.02% during the third quarter of 2026, bringing its one-year net return to +13.2% and annualized net return since inception to 10.6% (+112.4% cumulative). While the fund does not benchmark formally against an index, results outpaced broad European and global equity indices. The portfolio remains positioned with substantial upside to estimated intrinsic value (over 110%), trading at an attractive weighted average valuation of 6.3x P/E net of cash, a 19.7% FCF/EV yield, and a 30% return on tangible capital. Approximately 50% of the portfolio is invested in companies holding net cash balance sheets, insulating the fund from tighter credit conditions, while only 5% carries leverage considered high. The manager’s macro analysis centers on rising long-term sovereign bond yields—particularly in France, the US, and the UK—alongside persistent inflation catalyzed by high oil and gas prices from the Strait of Hormuz conflict. Palm Harbour expresses skepticism toward accounting mechanics flattering broader market growth, highlighting that AI hyperscalers are spending more than 100% of free cash flow on capex, front-loading supplier profits while deferring costs via multi-year depreciation. In contrast, the fund maintains a shorter duration equity profile with strong cash generation and limited direct exposure to speculative AI themes. Portfolio turnover during the quarter reflected active capital recycling. The fund initiated new long positions in CTS Eventim, taking advantage of an AI-related sell-off and executive departure, and Hanyang ENG, a Korean semiconductor fab infrastructure specialist trading at a mid-teens FCF yield. Capital was reallocated from successful exits, including full liquidations of Watches of Switzerland (+108% return, 334 bps contribution), Piraeus Port Authority (+113% return, 332 bps contribution), and Norma Group via a tender offer. The fund's combined holding in Cirsa and Lottomatica now represents its largest portfolio position following their announced merger.
Invest in a diversified portfolio of bottom-up, cash-producing, fundamentally sound companies that are out of favor, trade at demanding discounts with high free cash flow yields, and possess strong balance sheets capable of compounding value across macroeconomic regimes.
Palm Harbour remains extremely optimistic about its portfolio prospects, emphasizing that its portfolio trades at a high free cash flow yield and low valuation multiple with over 110% upside to estimated NAV. The manager expects out-of-favor, cash-producing companies to fare well even in an environment marked by higher interest rates and volatile energy prices.
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