| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 31.3% | 4.8% | 54.3% |
| 2025 | 2024 |
|---|---|
| 54.3% | 45.6% |
Pernas Portfolio delivered exceptional performance in 2025, outperforming the S&P 500 by 36.4% with broad participation across holdings. The year proved highly volatile and instructive, beginning with California fires and followed by market dislocation after Trump's Liberation Day announcement, which caught the manager flat-footed and led to raising cash to 30%. Despite initial drawdowns, the portfolio recovered as AI momentum accelerated and stock selection generated outsized alpha. Key lessons emerged from positions like Card Factory, where management missteps and false stability led to inaction, and Paysafe, where initial sizing was too aggressive given high leverage. The manager argues that traditional mean reversion strategies are increasingly flawed in today's non-stationary environment, where AI transformation, structural economic changes, and central bank intervention create conditions where past patterns are unlikely to reassert. Looking forward, the focus remains on a barbell strategy of owning clear AI winners alongside companies mislabeled as AI losers, with the AI-driven capex cycle expected to persist over the next 12-16 months.
In an era of rapidly increasing dynamism where the future will not resemble the past, smaller-cap companies offer outsized opportunities due to their ability to pivot quickly, while traditional mean reversion strategies are increasingly flawed in a non-stationary environment shaped by AI transformation, structural economic changes, and evolving geopolitical dynamics.
The manager expects the AI-driven capex cycle to persist over the next 12-16 months and believes comparisons to the dot-com or telecom boom/bust are highly misplaced. They anticipate maintaining focus on a barbell strategy of AI winners and mislabeled AI losers, while continuing to review potential opportunities among companies incorrectly categorized as AI losers.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | ADBE, APLD, CARD.L, CELH, META, NKE, PSFE, SEMR, STX | AI, defense, Mean reversion, small caps, technology, value | - | AI represents a consequential technological shift reshaping business and consumer behaviors. The AI-driven capex cycle is expected to persist over the next 12-16 months. The… |
| Oct 29 2025 | 2025 Q3 | - | Artificial Intelligence, Capex, Data centers, infrastructure, semiconductors |
NVDA NVDA |
The portfolio outperformed the S&P 500 by over 23%, led by AI-related holdings such as APLD and CGEH. The letter analyzed whether the current AI… |
| Jul 18 2025 | 2025 Q2 | - | currency diversification, Europe, fiscal policy, risk premiums, Rotation | - | The letter emphasizes market regime shifts marked by fiscal expansion, policy risk, and rotation away from U.S. dominance. Management highlights European equity outperformance, currency diversification,… |
| Apr 19 2025 | 2025 Q1 | - | - | - | - |
| Jan 24 2025 | 2024 Q4 | DOCS LN, DUOL, RRGB | - | - | - |
| Oct 8 2024 | 2024 Q3 | - | - | - | - |
| Jul 20 2024 | 2024 Q2 | UNFI, XMTR | - | - | - |
| May 3 2024 | 2024 Q1 | AWE LN | - | - | - |
| Aug 1 2024 | 2023 Q4 | - | - | - | - |
| Oct 14 2023 | 2023 Q3 | E2N GR, NRP, RELY | - | - | - |
| Jul 14 2023 | 2023 Q2 | META, S4M GR, ZUMZ | - | - | - |
| Apr 14 2023 | 2023 Q1 | E2N GR, META | - | - | - |
| Feb 28 2023 | 2022 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
DefenseDefense positioning includes exposure to missiles, air defense and space through companies like Lockheed Martin, supported by large order backlogs providing strong long-term visibility amid heightened geopolitical tensions. |
Military Aerospace Geopolitical Security Infrastructure | |
Small CapsConcentrated portfolio of small-cap companies with limited sell-side coverage and institutional ownership. Invests where most institutional managers cannot or will not participate, allowing for asymmetric return potential. 44% of Russell 2000 stocks have zero Wall Street coverage, creating mispriced opportunities. |
Russell 2000 Limited Coverage Institutional Asymmetric Mispriced | |
| 2025 Q3 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
InfrastructureDigital 9 Infrastructure holds telecom infrastructure assets including Arqiva stake. Despite poor 2025 performance, potential capital returns and asset sales could unlock value. Infrastructure assets provide defensive characteristics. |
Telecom Infrastructure Digital Infrastructure | |
| 2025 Q2 |
Rotation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 29, 2025 | Fund Letters | Deiya Pernas | NVDA | NVIDIA Corp. | Information Technology | Semiconductors & AI Hardware | Bull | NASDAQ | AI, CapEx, data centers, Demand, GPUs, semiconductors, Utilization | Login |
| Oct 29, 2025 | Fund Letters | Deiya Pernas | NVDA | NVIDIA Corp. | Information Technology | Semiconductors & AI Hardware | Bull | NASDAQ | AI, CapEx, data centers, Demand, GPUs, semiconductors, Utilization | Login |
| TICKER | COMMENTARY |
|---|---|
| ADBE | Later in the quarter we initiated Adobe, a stock we have held before, where we believe AI is more likely to enhance the product suite than disrupt it. |
| APLD | Some of our top performing closed positions: APLD 168% |
| CARD.L | Card Factory, after a harsh profit warning blamed on weaker high street footfall. What's less clear is whether this signals a tough retail environment or something more troubling in the company's competitive position. For now, we've let sleeping dogs lie. The next year should make it clear whether the dog's just napping or quietly chewing through the furniture. |
| CELH | Top 3 detractors to absolute performance: UTI, ELF, CELH |
| META | Meta was cited as a larger position that contributed little despite what I thought was positive operating progress, representing opportunity cost in the portfolio. |
| NKE | Notable positive contributions from the Fund's short book in December include National Vision Holdings, Nike, and Starbucks. |
| PSFE | The largest detractor from performance was Paysafe (United Kingdom). The online payments provider reported a weak quarter, with Digital Wallets growing more slowly than anticipated and margins in the Merchant Solutions segment coming under pressure. Given ongoing regulatory headwinds and a growth trajectory that continues to fall short of expectations, our investment team chose to exit the position. |
| SEMR | Some of our top performing closed positions: SEMR 68%. Four months ago we invested in Semrush as an example of a company we believed would be an AI winner despite the market aggressively selling the stock on AI fears. Shortly thereafter, the company was acquired by Adobe at a 78% premium to bolster its AI capabilities, validating that view. |
| STX | Some of our top performing closed positions: STX 53% |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
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