| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
RF Capital Group reported Q2 2025 revenue of $89.3 million, down 2% year-over-year, driven by lower interest income amid declining Canadian interest rates, partially offset by 6% growth in fee revenue from higher average AUA of $39.1 billion. The company announced a definitive agreement for acquisition by iA Financial Corporation, which will provide enhanced technology, product innovation, and operational scale while maintaining independent operations under the Richardson Wealth brand. EBITDA decreased 29% to $10.7 million due to flat operating expenses and declining gross margins, resulting in a net loss of $2.1 million versus $2.7 million net income in Q2 2024. Key risks include market volatility from U.S. trade policies affecting AUA, declining interest rates impacting revenue, and subdued corporate finance activity. The company expects continued focus on cost control and growth opportunities through its three-pillar strategy while managing the transition to iA ownership.
RF Capital Group is a Canadian wealth management firm being acquired by iA Financial Corporation to enhance advisor capabilities through expanded technology, product innovation, and operational scale while maintaining independent operations under the Richardson Wealth brand.
The company expects continued market volatility due to new U.S. trade and tariff policies, declining interest rates throughout 2025, subdued transaction activity in corporate finance, and inflation to remain within Bank of Canada's target range despite trade policy uncertainty.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 31 2025 | 2025 Q2 | RCG.TO | Acquisition, Canada, Financial Services, interest rates, Wealth management | - | RF Capital Group's Q2 2025 results showed revenue decline due to lower interest income despite AUA growth to $40.4 billion. The announced acquisition by iA Financial Corporation will enhance advisor capabilities through expanded technology and operational scale while maintaining Richardson Wealth brand independence. Management focuses on cost control and strategic execution during the transition period. |
| May 1 2025 | 2025 Q1 | 2660.HK, SFM | Cash Deployment, gaming, Grocers, Hong Kong, Portfolio Management, small caps, value |
SFM 2660.HK |
RF Capital outperformed in Q1 2025 while aggressively deploying cash from 27% to 14% amid volatile markets. The concentrated value fund holds strong performer Sprouts Farmers Market and deep-value gaming company Zengame Technology. Manager expresses unprecedented excitement about current opportunity set and plans major portfolio reconstitution to capitalize on attractive underfollowed equities. |
| Feb 2 2024 | 2023 Q4 | 2660.HK, SFM | Cash, Concentration, global, growth, Research, small caps, value | - | RF Capital delivered 56% returns in 2023 through concentrated investments in undervalued small-cap growth companies. Top holdings Zengame and Sprouts drove half the performance. With 50% cash from inflows, the manager plans aggressive research to deploy capital in overlooked global opportunities despite macro headwinds. |
| Mar 8 2023 | 2023 Q2 | 2660.HK | Asia, gaming, Micro Cap, Performance, small caps, value | 2660.HK | RF Capital returned +34.93% YTD through concentrated small-cap value investing across global markets, led by 24.79% position in gaming company Zengame Technology. The manager evolved their approach to include technical analysis while maintaining value principles, positioning defensively with 23.65% cash ahead of expected recession while prepared to deploy capital opportunistically into dislocated deep value opportunities. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q1 |
GamingZengame Technology continues to have hit games generating revenue from in-game purchases and ads. Flagship game Fingertip Sichuan Mahjong consistently ranks Top 5 in its category, while Fishing Master is rising in popularity and may break Top 10. The company trades at deep-value multiples despite having quality games in its portfolio. |
Mobile Gaming In-App Purchases Gaming Revenue Game Rankings Gaming Portfolio |
GrocersSprouts Farmers Market continues strong execution with 18.7% net sales growth, 11.7% comp store sales growth, and 61.6% EPS growth in Q1 2025. The company benefits from healthy living and wellness trends, with expansion plans of at least 35 new stores for FY2025 and potential for 1,200 stores total in the US. |
Grocery Retail Comp Store Sales Store Expansion Healthy Living Wellness Trends | |
ValueThe manager emphasizes deep-value investing principles, particularly with Zengame trading at less than 2x EV/EBIT, 5x earnings and FCF, 0.84x tangible book, and 1.07x NCAV. The approach focuses on margin of safety and avoiding purchases at all-time high valuations while seeking companies priced below intrinsic value. |
Deep Value Value Multiples Margin of Safety Intrinsic Value Net-Net | |
| 2023 Q4 |
ValueManager focuses on finding undervalued companies trading at deep value prices with single-digit P/E ratios. The fund targets high-quality growth companies available at attractive valuations that meet strict criteria including strong balance sheets and minimal institutional ownership. |
Deep Value Single-digit PE Undervalued Quality Growth Strong Balance Sheet |
Small CapsPortfolio concentrated in small, foreign companies with hypergrowth prospects and minimal institutional ownership. Manager specifically seeks tiny companies where largest shareholders are management teams, creating opportunities in overlooked segments of the market. |
Small Companies Foreign Hypergrowth Minimal Institutional Management Ownership | |
| 2023 Q2 |
GamingZengame Technology represents 24.79% of the portfolio, with the manager viewing mobile gaming positively despite some KPI declines. The company grew revenues and earnings over 20% with strong ARPPU growth of 51.14%, though MAU and DAU declined. Management emphasizes overseas expansion as a growth avenue. |
Mobile Gaming ARPPU MAU DAU China |
Small CapsThe manager has transitioned to focus primarily on nano caps (<$100M), micro caps (<$500M), and small caps (<$2B) as part of 'RF Capital 2.0'. This shift has contributed to outperformance by targeting the most inefficient market pockets where multi-baggers are more likely. |
Nano Cap Micro Cap Market Inefficiency Multi-baggers | |
ValueThe manager maintains value investing principles while evolving their approach. They pay 'value investor prices' for portfolio companies despite improving business quality over time. The approach has evolved to include trading around positions using technical analysis while maintaining long-term value focus. |
Value Investing Intrinsic Value Technical Analysis Long-term |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| May 1, 2025 | Fund Letters | RF Capital Management | 2660.HK | Zengame Technology | Communication Services | Interactive Media & Services | Bull | Hong Kong Stock Exchange | China, deep value, dividend yield, Fishing Games, Hong Kong, Mahjong, Mobile Gaming, Net-Net, turnaround | Login |
| May 1, 2025 | Fund Letters | RF Capital Management | SFM | Sprouts Farmers Market | Consumer Staples | Food & Staples Retailing | Bull | NASDAQ | Comp Store Sales, Customer loyalty, e-commerce, Grocery Retailer, growth, Health & Wellness, Organic Foods, store expansion, Value | Login |
| Jul 1, 2023 | Fund Letters | RF Capital Management | 2660.HK | Zengame Technology | Communication Services | Interactive Media & Services | Bull | Hong Kong Stock Exchange | ARPPU, Board Games, Card Games, China, Hong Kong, Mahjong, microcap, Mobile Gaming, Value, Virtual Items | Login |
| TICKER | COMMENTARY |
|---|---|
| RCG.TO | RF Capital Group Inc. (TSX: RCG) today reported revenue of $89.3 million in the second quarter of 2025, down 2% compared to the prior year. The Company and iA Financial Corporation Inc. announced that they have entered into a definitive agreement for iA to acquire all issued and outstanding common shares of the Company, its revolving debt and preferred shares. |
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