| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 15.9% | 6.9% |
Phoenician Capital returned 15.9% in Q2 2026, bringing YTD performance to 6.9% versus 10.2% for the S&P 500. The manager continued executing a disciplined capital rotation strategy, trimming positions that ran ahead of intrinsic value and redeploying into undervalued names. The primary opportunity set remains in global small- and mid-cap businesses receiving limited coverage versus U.S. mega-caps. The fund exited its Goodfood Market position after years of unsuccessful turnaround efforts, applying the lesson that turnarounds seldom turn. A new position was initiated in Halozyme Therapeutics, a biotech licensing ENHANZE drug delivery technology that generates toll-road-like royalties on partner pharmaceutical sales. The business model benefits from high switching costs, though faces patent expiration risk between 2027-2034. The manager values HALO's near-term cash generation, with only half the valuation dependent on distant future outcomes. Tighter position sizing and faster capital redeployment have cut portfolio volatility roughly in half over the past two years without sacrificing returns. A second undisclosed position is currently being built.
The manager is deploying capital into undervalued global small- and mid-cap businesses while trimming overvalued positions, with a focus on companies trading below intrinsic value that receive limited market coverage compared to U.S. mega-caps.
Manager maintains focus on finding good businesses run by people obsessed with growing competitive advantages, purchased at prices offering a real margin of safety. The opportunity set continues to favor global small- and mid-cap businesses over U.S. mega-caps.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 9 2026 | 2026 Q2 | HALO | Biotechnology, global, Portfolio Management, royalties, small caps, value | HALO | Phoenician Capital is actively rotating capital from overvalued positions into undervalued global small- and mid-cap businesses. The manager initiated a position in Halozyme Therapeutics, a biotech generating royalty revenues from drug delivery technology with toll-road economics and high switching costs. Portfolio volatility has been cut in half through tighter position sizing and faster capital redeployment while maintaining the target return profile. |
| Jan 14 2026 | 2025 Q4 | ASA.L, AT.L, BTER3.SA, FOOD.TO, MAD.AX, PUUILO.HE | AI, global, growth, Quality, small caps, value | - | Phoenician Capital posted 34% returns in 2025 by owning quality businesses outside crowded market areas. Top performers like ASA International, Mader Group, and Inter & Co. demonstrated strong operational execution and profitability growth. The fund is enhancing its proprietary AI research platform to accelerate new investment generation while maintaining disciplined, valuation-aware approach for 2026. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
BiotechnologyManager initiated a position in Halozyme Therapeutics, a royalty-based biotech licensing ENHANZE technology that enables subcutaneous drug delivery. The business model resembles a toll road with recurring royalties on partner drugs, protected by switching costs from clinical trial requirements. Patent expiration risk exists between 2027-2034, though management is working to extend the runway into the 2040s. |
Royalties Drug Delivery Patents Pharmaceuticals |
Small CapsManager found multiple opportunities in global small- and mid-cap businesses trading below intrinsic value, which receive comparatively little coverage versus U.S. mega-caps. Capital was actively redeployed from overvalued positions into these undervalued names during the quarter, representing the primary source of opportunity in the current market. |
Valuation Coverage Gap Opportunity Set | |
GLP1Halozyme licensed ENHANZE technology to Skye Bioscience in December to co-formulate Skye's obesity drug candidate for subcutaneous delivery in combination with a GLP-1 obesity drug. The drug is in early trials with the next study starting mid-2026. This represents optionality rather than underwritten value, with potential future payments and royalties if successful. |
Obesity Drug Development Licensing Optionality | |
| 2025 Q4 |
Live SportsManager sees significant value in sports teams and entertainment assets, citing strong viewership numbers and global interest. Recommends Atlanta Braves, Madison Square Garden Sports, Manchester United, and Rogers Communications based on undervalued sports assets relative to private market values. |
Sports Teams Entertainment Media Rights Valuation |
MediaPositive on media companies with sports content and live programming. Fox benefits from NFL and MLB rights plus World Cup coverage. Versant Media Group seen as attractive after Comcast spinoff created selling pressure from index funds. |
Broadcasting Content Sports Rights Spinoffs | |
Natural GasBullish on National Fuel Gas due to strategic Appalachian Basin reserves and regulated utility operations. Sees 50% upside to private market value with potential for higher earnings and company split-up opportunities. |
Utilities Energy Infrastructure Reserves Regulation | |
AIAcknowledges AI's transformative impact but warns of potential disappointment for investors. Compares current AI boom to historical tech revolutions with multiple speculative solutions. Expects volatility and potential 'Deep Seek' moments that could rattle markets. |
Technology Disruption Speculation Volatility | |
Mergers & AcquisitionsExpects increased deal activity driven by need for scale, lower financing costs, and more amenable regulatory environment. Private equity dry powder of $800 billion provides floor on valuations. Spinoffs creating future transaction opportunities. |
Deal Activity Private Equity Regulation Scale |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 9, 2026 | Fund Letters | Phoenician Capital | HALO | Halozyme Therapeutics, Inc. | Biotechnology | Biotechnology | Bull | NASDAQ | asset-light business, biotechnology, Drug Delivery Technology, Free Cash Flow, GLP-1 Obesity, high switching costs, operating leverage, Patent Expiration Risk, Pharmaceutical Licensing, royalty model | Login |
| TICKER | COMMENTARY |
|---|---|
| HALO | HALO licenses a technology, ENHANZE®, that allows large pharmaceutical companies to replace hours on an IV drip for a quick shot under the skin. The technology works by injecting an enzyme that temporarily clears a natural gel-like barrier under the skin, letting a large volume of drug spread and absorb fast enough to replace the drip. HALO does not make drugs itself; it licenses the technology and collects fees and royalties on every dose of an approved partner drug sold worldwide, more like a toll road than a drug company. Once a partner's drug is approved using Halozyme's technology, switching to a competitor would mean spending years re-running clinical trials, which most partners won't do. The most material risk in the HALO investment is patent cliff exposure: core ENHANZE patents expire between 2027 and 2034 depending on jurisdiction, and management is working to extend the royalty runway toward the 2040s before that window closes. Separately, and more speculatively, Merck has launched a competing product without paying Halo a royalty, and though Halo won a German infringement injunction against Merck, we do not believe that a final ruling will go in Halo's favor. This dispute rests on a separate, newer patent family, not the ENHANZE patents licensed to Halo's partners. While not our base case, a HALO win, even if partial, could add a royalty on one of the world's best-selling Merck drugs. Separately, Halo licensed ENHANZE in December to Skye Bioscience to co-formulate Skye's obesity drug candidate for subcutaneous delivery in combination with a GLP-1 obesity drug. The drug is still in early trials, with the next study only starting in mid-2026, but Halo would earn payments and a royalty on any future sales, so this is optionality, not something we're underwriting. Over the past five years, Halo generated approximately $2 billion in free cash flow and reinvested approximately $2 billion in acquisitions that are expected to generate additional revenue in the future but haven't yet. Today, the company generates roughly three times the revenue of five years ago, with earnings roughly unchanged, because the acquisitions haven't yet scaled into the operating leverage built into the model. As they do, we expect earnings to catch up to revenue. We built the position at a meaningful discount to what we think the business is worth, and only about half of that value depends on the distant future, a healthier mix than is typical this early in building out a royalty business. |
| 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 |
|---|---|---|---|
| No industry data available | |||
