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 |
|---|---|---|---|---|---|---|
RF Capital returned 6.34% net in Q2 2026 while executing a deliberate portfolio reset. Cash rose from 29% to over 80% in May as the manager sold investments that no longer deserved capital relative to new opportunities. By quarter-end, cash had declined to 38%, and as of the letter date, the fund is fully invested with the five largest positions accounting for approximately 63% of the portfolio. The manager reviewed every holding and compared it against new ideas, asking whether each stock deserved capital relative to everything else available. The majority of capital is now directed toward two types of companies: emerging compounders and businesses at an early inflection point. The manager seeks small or underfollowed businesses growing quickly with clear reasons for continued growth and improving profitability as they scale. Direction and durability of growth matter more than any single quarterly rate. Price action is important as confirmation that the market is recognizing positive change. The portfolio today has more growth potential, stronger balance sheets, and clearer earnings inflections than at the beginning of Q2.
RF Capital focuses on small and micro-cap businesses that are growing quickly, have clear reasons for continued growth, and should become more profitable as they scale, with capital concentrated in the highest-conviction emerging compounders and early inflection opportunities.
The manager states the portfolio today is better than at the beginning of Q2, with more growth potential, stronger balance sheets, and clearer earnings inflections. Priorities for the second half include exiting smaller positions, concentrating research on the most important companies, and adding to positions only when those companies execute. The changes made in Q2 mark the beginning of the next phase for RF Capital.
As of Aug 6, 2026
Roger Fan founded RF Capital Management LLC in 2017 and serves as Chief Investment Officer. He holds a J.D. from Texas Tech University School of Law and a B.S. in Psychology from UC Davis. Fan decided to become a hedge fund manager during his senior year and began investing family capital in May 2008. His early business exposure came through his parents' fast food and convenience store operations, instilling strong work ethic and entrepreneurial values.
RF Capital seeks to achieve superior risk-adjusted returns through investing in obscure, undervalued companies globally across all sectors. Investments must meet three key criteria: High Returns on Capital, High Growth Potential/IRR, and Aligned Management Teams. The firm typically invests in 5 to 10 companies that satisfy all criteria and holds cash when suitable opportunities are unavailable. The strategy employs bottom-up, research-intensive analysis focused on undervalued growth stocks with strong balance sheets and minimal institutional ownership.
Lead Portfolio Manager
High Conviction Bullish
Market Conviction
The manager demonstrates high conviction through extreme concentration: five positions represent 63% of the portfolio, implying an average position size of 12.6% for the top five. The letter describes a systematic review process where every holding was compared against alternatives, with capital allocated only to ideas that 'deserved capital relative to everything else we could own.' The manager explicitly states 'our best ideas must be large enough to matter' and accepts volatility as a consequence. Position sizing is discussed explicitly ('large position sizes at cost are built over time'), and the manager describes detailed research requirements for positions reaching 10-15% of the portfolio. The absence of named positions caps the score below 0.90, but the portfolio construction evidence and explicit sizing language support a high conviction score.
Growth Outlook
The company expresses caution about market conditions, citing expected increased volatility due to U.S. trade and tariff policies, declining interest rates, and subdued transaction activity. While not deeply pessimistic, the outlook acknowledges challenging conditions and uncertainty.
Risk Appetite
The company maintains a balanced approach, focusing on cost control and operational efficiency while continuing strategic initiatives. There is no indication of aggressive risk-taking or defensive positioning, representing a neutral stance.
Capital Deployment
Cash declined from over 80% in May to 38% at quarter-end, then to 0% (fully invested) by the letter date. This represents a net cash reduction of more than 80 percentage points over approximately two months, indicating aggressive deployment. The manager states 'we continued deploying capital after quarter-end' and 'as of today, we are fully invested.' This is among the most aggressive deployment patterns possible, moving from maximum cash to maximum equity exposure in a short timeframe.
Forward Guidance
Management expresses cautious optimism about the acquisition benefits and continued execution of their three-pillar strategy, but acknowledges multiple headwinds including declining rates and market volatility. The guidance is slightly positive but measured.
Language Signal
The letter uses predominantly positive directional language: 'better portfolio,' 'more growth potential,' 'stronger balance sheets,' 'clearer earnings inflections,' 'compelling opportunities,' and 'attractive investments.' Risk language is minimal and primarily relates to portfolio construction discipline rather than market concerns. The manager describes the current environment as offering sufficient opportunities to move from 80% cash to fully invested, which is inherently bullish language.
Perceived Risk
The company identifies multiple risk factors including market volatility from trade policies, declining interest rates, subdued transaction activity, and operational expense volatility from share price fluctuations. This represents moderate to high perceived risk in the operating environment.
Opportunity Density
The manager found sufficient compelling opportunities to deploy over 80% of the portfolio in approximately two months. The letter states 'the change was driven by opportunity' and describes finding investments that 'deserved capital' through systematic screening of U.S., Canadian, and foreign markets. The manager made idea generation 'more systematic' to 'cover more companies' and 'find the few that deserve research time and capital.' The ability to move from maximum cash to fully invested indicates a rich opportunity set, particularly in the small and micro-cap space where the manager operates.
Time Horizon
The manager underwrites what a business could reasonably earn 'over the next two to three years' and builds large position sizes 'over time.' The letter describes adding as companies execute and reducing when the thesis changes, suggesting a multi-year holding period with active monitoring. The focus on emerging compounders and early inflection points implies patience for businesses to scale and improve profitability. However, the emphasis on price action and quarterly execution monitoring prevents this from scoring in the 0.80+ range reserved for explicitly permanent capital or decade-plus horizons. The 2-3 year underwriting timeframe places this firmly in the medium-term category.
Top Conviction Themes
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