| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
The first quarter of 2026 was marked by geopolitical tensions in the Middle East that triggered significant corrections in European markets from late February. Rising oil prices reignited inflation fears and monetary policy uncertainty, with European indices falling 2.5% while energy sectors gained 38.4%. However, this correction has made European valuations more attractive at 13.9x P/E versus 20.5x for US markets. The underlying European fundamentals remain intact with gradually recovering economy, inflation returning to levels compatible with monetary easing, and manufacturing sector recovery particularly in Germany. Value style outperformed growth by significant margins during the quarter. Recent ceasefire developments in Iran have reduced oil prices and energy risk premiums. European earnings growth expectations remain around 10% for 2026, suggesting the correction was primarily valuation de-rating rather than fundamental reassessment. If geopolitical tensions continue to ease, European markets could refocus on their structural advantages including fiscal support, defense spending increases, and more favorable monetary policy positioning.
The Q1 2026 correction has restored relative appeal of European equities whose valuations remain moderate at 13.9x P/E versus 20.5x for US markets, while fundamentals including recovering economy and controlled inflation support the investment case.
If Middle East tensions continue to ease, European markets could refocus on fundamentals including attractive valuations, sustained earnings momentum around 10% growth, and gradual macroeconomic improvement. The correction appears more external stress than fundamental challenge to European investment case.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 16 2026 | 2026 Q1 | - | energy, Europe, Geopolitical, inflation, oil, valuation, value | - | Q1 2026 Middle East tensions triggered European equity corrections but restored attractive valuations at 13.9x P/E versus 20.5x US. Energy sector outperformed while value beat growth significantly. Recent Iran ceasefire reduces oil price pressures. European fundamentals remain solid with recovering manufacturing, controlled inflation, and 10% earnings growth expectations intact for potential rebound. |
| Jan 5 2026 | 2025 Q4 | ANTY.MI | Family Business, Leadership, planning, Stewardship, Succession, Values, Wealth management | - | Rothschild & Co's quarterly letter advocates for early succession planning with clear communication, gradual preparation of next generation, and strong values-based foundations. The firm's own CEO transition exemplifies these principles, emphasizing continuity in client relationships while allowing for evolution and growth in wealth management services. |
| Nov 30 2025 | 2025 Q3 | AAPL, ACN, AMZN, ASML, AVGO, CDNS, DHR, GOOGL, IDXX, INTC, META, MSFT, NVDA, SNPS, TMO, TSLA | AI, Cloud, Compounding, long-term, Quality, semiconductors, technology | - | LongRun Equity's quality-focused approach underperformed in Q3 as markets favored riskier growth names. The fund added Amazon and Synopsys while exiting Accenture, strengthening its semiconductor design and cloud computing exposure. Despite style headwinds, the manager maintains conviction in high-quality compounders with sustainable competitive advantages, expecting low double-digit forward returns from an attractively valued portfolio. |
| Jun 30 2025 | 2025 Q2 | AAP, AZO, COST, CRM, GE, IDXX, INTU, MC.PA, MSFT, ORLY, RMS.PA, TMO, UNH | AI, Auto Aftermarket, Compounding, healthcare, long-term, Quality, software |
ORLY CRM |
LongRun Equity underperformed in Q2 due to healthcare weakness and AI disruption concerns, despite strong gains from GE Aerospace, Intuit, and Microsoft. New positions in O'Reilly Automotive and Salesforce reflect continued focus on quality compounders with sustainable advantages. UnitedHealth exit demonstrates disciplined approach to visibility requirements. Portfolio fundamentals remain strong with attractive forward return expectations. |
| Mar 31 2025 | 2025 Q1 | 0700.HK, ACN, ADBE, ASML, CDNS, COST, GE, GOOGL, INTU, IT, LIN, MA, MSCI, MSFT, OR.PA, PG, RELX.L | Compounding, Consumer Staples, Defensive, long-term, Quality, technology |
CDS GE MSCI |
LongRun Equity's Q1 underperformance was driven by technology sell-offs amid risk-off sentiment, partially offset by defensive consumer staples resilience. New investments in semiconductor software leader Cadence and aerospace giant GE Aerospace capitalize on quality businesses with strong competitive moats. Management expects attractive low double-digit forward returns from current valuations. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
OilRising oil prices due to Middle East tensions triggered market corrections but also created opportunities. Energy sector outperformed significantly with +38.4% returns. Recent ceasefire in Iran has led to oil price declines, reducing the energy risk premium. |
Oil Energy Middle East Geopolitical Inflation |
InflationEnergy price increases reignited inflation expectations, particularly in the US. This has influenced monetary policy expectations and market positioning. The temporary nature of energy-driven inflation is emphasized. |
Inflation Energy Monetary Policy Fed Rates | |
ValueValue style significantly outperformed growth style in Q1 2026, posting +2.1% versus -5.9% for growth. This outperformance was driven largely by energy sector gains and rising interest rates that penalized duration-sensitive growth stocks. |
Value Growth Style Outperformance Energy | |
EuropeEuropean equity valuations have become more attractive following the correction, trading at 13.9x P/E versus 20.5x for US markets. The region benefits from controlled inflation, potential monetary easing, and manufacturing recovery, particularly in Germany. |
Europe Valuation Manufacturing Germany Recovery | |
| 2025 Q4 |
SuccessionSuccession planning is critical for families and businesses, requiring early planning, clear communication, and strong values. The letter emphasizes that successful transitions involve preparing the next generation through gradual involvement, fostering stewardship mindset, and maintaining continuity while allowing evolution. Japanese businesses with over 100 years of operation demonstrate how values-based succession creates resilience. |
Family Business Leadership Planning Values Stewardship |
| 2025 Q3 |
AIAI has sparked a global race to develop specialized, high-performance chips. Cloud providers like Google, Amazon, Meta and Microsoft, along with many startups, are now designing their own AI chips. Each new design requires advanced tools for modeling and verification, driving demand for chip design software. AI is a long-term trend spanning data centers to edge devices. |
Artificial Intelligence Chip Design Cloud Providers Semiconductors Data Centers |
SemiconductorsThe semiconductor industry exposure through picks and shovels approach had been a drag on performance until recently. Focus is shifting towards the backbone of the industry, particularly amid onshoring trends fueled by US government and Nvidia investments into Intel. Chip design sits at the beginning of the value chain where the fund is well positioned. |
Chip Design Onshoring EDA Foundries Semi Equipment | |
CloudAmazon Web Services is viewed as a highly profitable cloud computing division with growth potential. The market had viewed AWS growth as disappointing, but the manager sees a difference between falling behind and taking time for sustainable execution. Partnerships and monetization of generative AI capabilities are expected to support margin improvements. |
AWS Cloud Computing Generative AI Infrastructure SaaS | |
QualityThe fund's preference for highly profitable quality companies was not rewarded by the market, which focused on riskier, growth-oriented and often unprofitable companies. The strategy maintains focus on companies with superior economics, sustainable competitive advantages, and the ability to compound earnings over time. |
Profitability Competitive Advantage Compounding Margins Returns | |
| 2025 Q2 |
AISoftware companies like Intuit and Microsoft increased by around 30% with the market pushing their rating higher thanks to their near impenetrable market positions which are likely to be further solidified through the use and successful monetization of artificial intelligence. Salesforce is positioned to augment its strong position further via the use of operational AI agents, such as its Agentforce initiative. |
Artificial Intelligence Software Monetization Agents Positioning |
Auto AftermarketO'Reilly Automotive operates in the consolidating U.S. aftermarket auto parts retail market. The company benefits from increasing vehicle age (currently 13 years) and mileage, with parts typically starting to fail after 60,000 miles. The business demonstrates antifragile characteristics, thriving during economic stress when new car purchases decline and people maintain existing vehicles longer. |
Vehicle Age Parts Retail Consolidation Antifragile Economic Stress | |
QualityThe fund focuses on high-quality companies with superior economics, strong market positions, pricing power, high margins and asset-light business models. Portfolio companies demonstrate strong competitive advantages with 76% having high competitive advantage strength and 100% having high switching costs. The strategy emphasizes wonderful companies at fair prices rather than fair companies at wonderful prices. |
Superior Economics Pricing Power Competitive Advantage Switching Costs Business Models | |
| 2025 Q1 |
QualityThe fund focuses on high-quality companies with superior economics, strong market positions, pricing power, high margins and asset-light business models. These characteristics result in high returns on capital and the ability to compound earnings over the long term. |
Quality Compounding Margins Returns Economics |
SemiconductorsThe fund invested in Cadence Design Systems, a leading provider of electronic design automation software for semiconductor chip design. EDA solutions are mission critical to the semiconductor industry as chip complexity increases, yet account for only a small share of customer spend. |
EDA Chip Design Software Mission Critical Complexity | |
AerospaceThe fund built a position in General Electric Aerospace, which dominates the narrowbody engine segment and controls around half of the widebody engine market. The aircraft engine market is characterized by near insurmountable barriers to entry, punitive switching costs and a large profitable aftermarket. |
Aircraft Engines Barriers Aftermarket Switching Costs Pricing Power |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 1, 2025 | Fund Letters | Rothschild & Co LongRun Equity Fund | ORLY | O'Reilly Automotive | Consumer Discretionary | Specialty Retail | Bull | NASDAQ | aftermarket, Antifragile, automotive, consolidation, defensive, Distribution, DIY, high-ROIC, market share, Parts, Professional, retail | Login |
| Jul 1, 2025 | Fund Letters | Rothschild & Co LongRun Equity Fund | CRM | Salesforce | Information Technology | Application Software | Bull | NYSE | Agentforce, AI, cloud, CRM, enterprise, margin expansion, recurring revenue, SaaS, Software, Workflow Integration | Login |
| Apr 1, 2025 | Fund Letters | Rothschild & Co LongRun Equity Fund | CDS | Cadence Design Systems | Information Technology | Application Software | Bull | NASDAQ | EDA software, market leader, Pricing power, semiconductors, Software, subscription model, technology | Login |
| Apr 1, 2025 | Fund Letters | Rothschild & Co LongRun Equity Fund | MSCI | MSCI Inc | Financials | Financial Exchanges & Data | Bull | NYSE | analytics, Benchmark Business, ESG Data, financial data, Index Provider, network effects, subscription model | Login |
| Apr 1, 2025 | Fund Letters | Rothschild & Co LongRun Equity Fund | GE | General Electric Aerospace | Industrials | Aerospace & Defense | Bull | NYSE | Aerospace, aftermarket services, Aircraft engines, barriers to entry, Industrial, Joint venture, Pricing power | Login |
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