| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 6.1% | 7.5% |
RLH SPAC Fund returned 6.1% in Q2 2026, driven by attractive contractual yields and transaction-related developments that validated the Fund's strategy of combining trust-supported downside protection with meaningful upside optionality. The opportunity set highlighted in the prior quarter materialized as discounts between SPAC trading prices and trust cash converged, while several positions benefited from improving investor sentiment. SPAC issuance remained elevated with 55 IPOs raising $8.9bn, while transaction announcements accelerated to 28 deals, the strongest quarter in three years. The continued imbalance between issuance and transaction activity keeps yields wide across the pre-announcement market. The Fund focuses on opportunities offering base-case annualized yields approaching or exceeding 5%, downside supported by trust cash, accelerated returns if transactions close early, and additional upside if transactions trade above trust value. Recent examples like CCXI and BRUN demonstrated that investor demand returns quickly for compelling transactions. The Fund also sees renewed activity in non-redemption agreements after several dormant quarters. The portfolio consists of approximately 74 SPACs with structural downside protection and multiple potential catalysts.
RLH SPAC Fund pursues SPAC arbitrage by investing in securities with attractive contractual yields supported by cash held in trust while retaining meaningful upside optionality as transaction catalysts develop, seeking to construct a portfolio where an attractive return is expected if nothing exceptional occurs while maintaining exposure to favorable transaction-related developments that may not be fully reflected in current market prices.
The manager believes the conditions that supported Q2 performance remain firmly in place. Continued SPAC issuance has increased the supply of securities, keeping yields attractive across the market. At the same time, renewed investor enthusiasm surrounding select transactions has demonstrated that meaningful upside remains available when high-quality opportunities capture market attention. The manager views this as a particularly attractive environment where investors are not forced to choose between attractive downside characteristics and meaningful upside potential—the SPAC market is increasingly offering both. The portfolio remains well positioned with structural downside protection supported by cash held in trust, multiple potential catalysts, and low-cost exposure to upside when individual transactions capture investor interest.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 20 2026 | 2026 Q2 | BCAR, BRUN, CCXI | arbitrage, Capital markets, Non-Redemption Agreements, SPACs, Transaction Catalysts, Trust Value, Yield |
CCXI BRUN BCAR |
RLH SPAC Fund returned 6.1% in Q2 2026 by combining trust-supported yields with transaction-driven optionality. The strategy delivered as SPAC discounts converged and select transactions like CCXI and BRUN captured investor interest. With 55 new SPAC IPOs and 28 transaction announcements, the opportunity set remains compelling: base-case yields exceeding 5%, trust-protected downside, and meaningful upside when quality transactions emerge. |
| Apr 9 2026 | 2026 Q1 | GSRI | arbitrage, Capital markets, SPACs, volatility, Yield | GSRI | RLH SPAC Fund sees the current market as approaching an inflection point with the most attractive risk-adjusted opportunities since inception. Elevated SPAC issuance outpacing transactions has created yield widening to 5% levels with protected downside and free optionality. The fund is actively deploying capital into this compelling setup. |
| Jan 23 2026 | 2025 Q4 | - | arbitrage, Capital markets, IPOs, optionality, SPACs, Transactions, Trust Value, Yield | - | RLH SPAC Fund delivered 21.8% returns in 2025 through disciplined SPAC arbitrage, non-redemption agreements, and proprietary investments. Strong SPAC IPO issuance but weak deal announcements created attractive yields despite recent IPO underperformance. The Fund positioned defensively in new issues while capitalizing on yield widening and growing market recognition of SPAC optionality entering 2026. |
| Sep 30 2025 | 2025 Q3 | AEXA, BACQ, CCCX, CCIX, CEP, HOND, TVA, WLAC | arbitrage, Capital markets, Fed policy, IPO, Risk Appetite, SPACs, Trust Value | - | RLH SPAC Fund delivered 2.2% in Q3 with 21.5% YTD returns as SPAC market discrimination returned. Quality deals now trade above trust value while weak structures don't, creating the selective environment the strategy targets. Fed rate cuts and improving IPO conditions support the thesis that embedded SPAC optionality can be unlocked through disciplined arbitrage. |
| Jul 22 2025 | 2025 Q2 | AIRO, MSTR | arbitrage, Bridge Loans, crypto, defense, nuclear, PIPE, SPACs |
AIRO AIRO |
RLH SPAC Fund delivered 13.9% returns in Q2 2025 as markets finally valued SPAC optionality for the first time since inception. Core arbitrage strategy benefited from renewed appetite for crypto, nuclear, and defense themes. Fund maintains disciplined approach to above-NAV positions while capturing upside through selective premium transactions and successful PIPE monetizations. |
| Apr 21 2025 | 2025 Q1 | - | arbitrage, Capital markets, Defensive, M&A, SPACs, Treasury, volatility | - | RLH SPAC Fund's treasury arbitrage strategy delivered positive returns while equity markets declined, showcasing its defensive positioning. The fund captures enhanced yields through SPAC discounts to trust value while maintaining treasury-backed downside protection. Despite subdued deal activity from macro uncertainty, continued SPAC issuance and attractive interest accruals provide compelling risk-adjusted return potential. |
| Jan 22 2025 | 2024 Q4 | - | arbitrage, Capital markets, IPO, M&A, rates, SPACs, Warrants | - | RLH SPAC Fund delivered 17% returns in 2024 through SPAC arbitrage, non-redemption agreements, and proprietary investments. Widening SPAC yields and lower financing costs create attractive opportunities. The manager sees early signs of SPAC market recovery with IPO revival, though dormant M&A markets remain a challenge. Potential capital markets acceleration under new administration offers upside optionality. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
SPACsThe Fund focuses on SPAC arbitrage, benefiting from attractive contractual yields supported by cash held in trust while retaining meaningful upside as transaction catalysts develop. The second quarter saw strong performance driven by yield convergence and transaction-related developments. The opportunity set remains compelling with base-case annualized yields approaching or exceeding 5%, downside supported by trust cash, and additional upside when transactions trade above trust value. |
SPACs Trust Value Arbitrage Transaction Catalysts Yield |
Capital MarketsSPAC issuance remained elevated relative to transaction announcements, with 55 SPAC IPOs raising $8.9bn in Q2 versus 62 IPOs raising $11.7bn in Q1. Transaction announcements accelerated to 28 deals versus 18 in the prior quarter, the strongest quarter for announcements in three years. The continued imbalance between issuance and transaction activity keeps yields wide across the pre-announcement market. |
SPAC IPOs Issuance Transaction Volume Market Structure | |
Risk AppetiteThe broader market environment improved during Q2 with risk assets recovering from earlier volatility. Within the SPAC market, investor sentiment strengthened as announced and completed transactions generated renewed interest. Approximately 20% of transactions announced in 2026 that remained pending at quarter-end were trading above trust value, demonstrating that investor demand can return quickly when compelling transactions emerge. |
Risk Assets Investor Sentiment Market Recovery Transaction Demand | |
| 2026 Q1 |
SPACsThe SPAC market is approaching an inflection point with elevated issuance outpacing transaction activity, creating yield widening and attractive risk-adjusted opportunities. The fund sees investors being paid to wait with protected downside, attractive yields around 5%, and free optionality. 62 SPAC IPOs raised $11.7bn in Q1 2026, the most active quarter since Q4 2021. |
SPACs Arbitrage Yield Optionality Liquidation |
Capital MarketsDespite elevated volatility and geopolitical uncertainty, SPAC issuance proved surprisingly resilient with more IPOs completed in Q1 2026 than all of 2024 combined. However, over 80% of SPAC IPOs were unprofitable when factoring in financing costs, suggesting capital was positioning for changing conditions. |
IPO Issuance Volatility Financing | |
VolatilityThe first quarter was defined by sharp increases in market volatility driven by geopolitical developments and repricing of inflation expectations. The VIX reached its highest level since the 2025 tariff-related dislocation, yet this volatility created meaningful dislocations and opportunities in the SPAC market. |
Volatility Geopolitical Inflation VIX | |
| 2025 Q4 |
GrowthThe Fund seeks long-term growth of capital by investing in growth-oriented common stocks using a quantitative formula that identifies the 50 stocks with highest one-year price appreciation meeting specific criteria. The Growth Strategy considers stock price appreciation as often associated with positive fundamentals such as strong growth or improving profitability. |
Growth Stocks Price Appreciation Quantitative |
ValueThe Growth Strategy uses price-to-sales ratio below 1.5 as its value criterion because sales figures are more difficult for a company to manipulate than earnings and frequently provide a clearer picture of a company's potential value. |
Price To Sales Value Criterion Sales | |
FinancialsThe Fund is currently substantially invested in the Financials sector, and its performance is therefore tied closely to developments in this industry. Companies in the Financials sector may be adversely affected by changes in the regulatory environment, interest rate fluctuations, and other factors. |
Financial Services Banking Interest Rates | |
| 2025 Q3 |
SPACsThe manager discusses the resurgence of SPAC activity with 35 SPAC IPOs raising $6.9bn in Q3 and 20 transaction announcements. Well-received deals are now trading above trust value, indicating market discrimination has returned. The Fund maintains ~43 SPACs in its arbitrage portfolio with embedded upside optionality. |
SPAC IPOs Trust Value Arbitrage Transaction Announcements Optionality |
Capital MarketsIPO market conditions are the most conducive since December 2021 according to Goldman Sachs' barometer. There have been 46 IPOs greater than $25mm YTD totaling $24bn, representing an 18% increase versus 2024. The average IPO has returned 30% on its first day of trading. |
IPO Market New Issuance Capital Formation Goldman Sachs Barometer | |
Risk AppetiteThe quarter saw modest continuation of risk-taking behavior supported by Fed rate cuts and expectations of further easing. Growing investor risk appetite is reflected in the IPO market recovery and SPAC transaction performance above trust values. |
Risk Taking Fed Rate Cuts Investor Appetite Market Recovery | |
| 2025 Q2 |
SPACsSPAC arbitrage remains the Fund's core strategy at 85% of portfolio. Q2 2025 marked first time since inception that market selectively valued optionality, driving strong returns. Several pre-deal SPACs now trading at premiums to trust, showing renewed risk appetite for differentiated sponsors and forward-thinking themes. |
Arbitrage Optionality Trust Value De-SPAC IPO |
CryptoConsistent with administration's crypto-friendly stance, increasing activity in sector. Cantor Fitzgerald's SPAC CEP announced transaction with Tether and SoftBank to create Twenty One, aiming to amass Bitcoin similar to MicroStrategy. Transaction raised over $500mm in PIPE capital with shares trading around $30, representing 200% gain from IPO price. |
Bitcoin Digital Assets PIPE Tether SoftBank | |
NuclearNuclear power transactions being well received with GSRT and HOND trading above trust value. Part of forward-thinking themes receiving positive investor reception alongside crypto and defense tech. |
Power Energy Trust Premium Clean Energy | |
DefenseDefense tech identified as one of the forward-thinking themes receiving renewed risk appetite. Airo Group case study exemplifies military-grade drone sector opportunities, with company being EBITDA-positive and operating in highly thematic defense sector. |
Drones Military Defense Tech Aerospace | |
| 2025 Q1 |
SPACsThe fund's core strategy is SPAC arbitrage, effectively treasury arbitrage seeking enhanced yield with minimal credit or market risk. Over $10 billion in new SPAC issuance occurred in the past 10 months, with 19 SPAC IPOs in Q1 2025 raising $2.8 billion. The fund maintains positions in 37 SPACs with attractive interest accruals from trust accounts providing compelling risk-reward in the current environment. |
Arbitrage Treasury IPO Merger Trust |
Capital MarketsTransaction announcements remained subdued amid high volatility and uncertainty, with M&A and IPO activity delayed until visibility is restored. The manager expects a robust capital markets environment would be better for SPACs and drive incremental upside. New tariffs surprised markets and contributed to heightened volatility affecting deal activity. |
M&A IPO Volatility Transactions Deals | |
Risk AppetiteThe fund's low correlation with traditional equity indices (34% with S&P 500) underscores its role as a defensive, non-correlated allocation in volatile markets. The strategy is positioned to perform even amid choppy equity markets, with low volatility and capital preservation as distinguishing features during broad market drawdowns. |
Correlation Defensive Volatility Preservation Uncorrelated | |
| 2024 Q4 |
SPACsThe SPAC arbitrage opportunity has increased driven by widening SPAC yields due to increased supply and decreasing financing costs from rate cuts. The fund expects monetization events for proprietary SPAC investments and continues to see a robust pipeline. The manager is cautiously optimistic that the SPAC market is beginning to inflect with revival in the IPO market as the first step. |
Arbitrage IPO Liquidation Warrants Rights |
Capital MarketsBoth the IPO and M&A markets have been dormant over the past few years, making it particularly challenging for SPACs. The consensus opinion under the new administration is an acceleration in deal activity. While not the manager's base case, this would offer incremental upside optionality to the portfolio and the SPAC market as a whole. |
IPO M&A Deal Activity Transaction Volume |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 20, 2026 | Fund Letters | RLH Capital | CCXI | Churchill Capital Corp XI | Shell Companies | Financial Exchanges & Data | Bull | NASDAQ | asymmetric upside, Event-driven, Merger Arbitrage, PIPE, robotics, SPAC, Special Situation, Trust-Supported | Login |
| Jul 20, 2026 | Fund Letters | RLH Capital | BRUN | Boost Run, Inc. | Software - Infrastructure | Specialty Stores | Bull | NASDAQ | Athletic Footwear, Business Combination, consumer, De-SPAC, Post-Merger, SPAC, Specialty retail, Zero Redemptions | Login |
| Jul 20, 2026 | Fund Letters | RLH Capital | BCAR | D. Boral ARC Acquisition I Corp. | Shell Companies | Financial Exchanges & Data | Bull | NASDAQ | AI, asymmetric risk-reward, Event-driven, Merger Arbitrage, SPAC, Special Situation, technology, Trust-Supported | Login |
| Apr 9, 2026 | Fund Letters | RLH Capital | GSRI | GSR IV Acquisition Corp. | Other | Specialized Finance | Bull | NASDAQ | arbitrage, Capital Protection, Liquidation, Optionality, SPAC, Transaction, Trust Value, yield | Login |
| Jul 22, 2025 | Fund Letters | Louis Camhi | AIRO | Airo Group Holdings, Inc. | Industrials | Aerospace & Defense | Bull | NASDAQ | Aerospace, Bridgefinancing, Defense, Drones, IPO | Login |
| Jul 22, 2025 | Fund Letters | RLH Capital | AIRO | Airo Group Holdings | Industrials | Aerospace & Defense | Bull | NASDAQ | Aerospace, Bridge Loan, defense technology, EBITDA Positive, IPO, Military Drones, SPAC Transaction, turnaround, Unmanned Aerial Vehicles | Login |
| TICKER | COMMENTARY |
|---|---|
| CCXI | On June 24, 2026, Churchill Capital Corp XI (Nasdaq: CCXI) announced a transaction to merge with Agility Robotics. Shares traded up from $10.20 in early June to as high as $19 and as of 7/17/26 trade ~$14. The warrants traded from $1.30 prior to announcement to as high as $9.20 and as of 7/17/26 trade at ~$7.00. The SPAC is sponsored by Churchill Capital and led by Michael Klein and the transaction is supported by a $200 million equity PIPE at $10 per share. The Fund held a modest position, which it sold shortly after the transaction announcement. Although the position was modest, the investment illustrates the asymmetric optionality available in trust-supported SPAC securities. |
| BRUN | Boost Run, Inc. (Nasdaq: BRUN) consummated its transaction with Willow Lane (prior ticker Nasdaq: WLAC) in early May. Shares are trading at ~$24 as of 7/17/26, after hitting a peak of ~$39 per share. There were zero redemptions and the company was able to keep 100% of the trust account. It was one of the first SPAC transactions in years to experience zero redemptions. |
| BCAR | D. Boral ARC Acquisition I Corp. (Nasdaq: BCAR) announced its transaction with Exascale Labs in early January and at the time, the Fund had no position. The initial reaction was positive with shares trading up ~5%, however, the enthusiasm faded and shares began to trade lower in the coming months. The Fund began acquiring shares in March at ~$10.11 – at the time our estimate of cash in trust was ~$10.25. Our thesis was simple: Downside case: if the transaction didn't close and the SPAC liquidated in April 2027, we would generate a positive return. Base case: the transaction closes over the summer generating a high-single-digit to low-double-digit unlevered return. Upside case: strong investor demand given Exascale's position in the AI ecosystem results in shares trading above trust value. Our upside case played out, and shares traded up to $11.00 (estimated cash in trust was $10.35). As in most situations, especially larger positions, when a SPAC trades above trust we begin reducing our position. Once shares trade above trust, the trust floor no longer provides the same downside protection, and the prospective yield is no longer sufficiently compelling. We monetized approximately two-thirds of the position above trust and subsequent to quarter end expect to redeem the remaining one-third in connection with the transaction vote, currently anticipated for late July or early August. |
| 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 | |||
