| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 57.7% | 1.2% | 1.2% |
RLH SPAC Fund returned 1.2% in Q1 2026, driven by yield widening across the SPAC universe that improved forward return potential. The fund believes the current SPAC market represents one of the most attractive risk-adjusted opportunities since inception, with elevated issuance outpacing transaction activity creating meaningful dislocations. Despite market volatility from geopolitical developments, SPAC issuance remained robust with 62 IPOs raising $11.7bn, the most active quarter since Q4 2021. The key opportunity is that investors are now being paid to wait, earning attractive yields around 5% with capital protection while retaining upside optionality. The fund highlighted GSR IV Acquisition Corp as representative of current opportunities, offering 5% yield to worst with potential for higher returns if transactions complete earlier. With over 80% of SPAC IPOs unprofitable at current financing costs, the manager expects further repricing to create more attractive entry points. The fund is actively deploying capital into this opportunity set.
The SPAC market is approaching an inflection point where elevated issuance and limited transaction activity have created attractive risk-adjusted opportunities with protected downside, yields around 5%, and free optionality.
The manager believes the coming quarters could present a compelling environment for returns as the SPAC market transitions into a phase where patience is being rewarded. They view this as one of the more attractive environments for SPAC investing in recent years and are actively deploying capital.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| 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 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 |
|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
|---|---|
| GSRI | GSR IV Acquisition Corp. is representative of the type of opportunity currently available in the SPAC market. As of April 3, 2026, the shares currently trade at $10.03, compared to our estimate of trust value of $10.19. The SPAC has a contractual maturity of June 2027, providing a defined timeline and embedded yield. In a downside case where the SPAC does not complete a transaction and instead liquidates at maturity, we estimate a terminal trust value of approximately $10.62. This implies a ~5.0% unlevered annualized yield to worst. If the SPAC instead completes a transaction by October 31, 2026, the shorter duration results in a higher annualized return of approximately 6.4% unlevered. This sponsor has previously completed a transaction where shares traded above trust value during the SPAC process. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||
