| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | 28.9% |
RV Capital's Business Owner Fund returned 28.9% in H1 2024, driven by investments in undervalued companies with strong owner-operators. The fund made its first oil and gas investment through International Petroleum, a Canadian company with production across three countries, attractive valuation metrics, and the Lundin family as major shareholders. The manager significantly expanded China exposure, adding NetEase, Yum China, H World, and Didi, describing Chinese valuations as the most astonishing of his career with blue-chip companies trading at single-digit to low double-digit P/Es despite strong fundamentals and aggressive capital returns. The letter extensively discusses ESG investing, with the manager criticizing current frameworks while supporting underlying environmental and governance principles. Key risks include China regulatory uncertainty and oil price volatility, while catalysts include IPCO's Blackrod development and Chinese companies' improved capital allocation. The fund maintains its focus on owner-operated businesses with sustainable competitive advantages.
The fund targets companies with rational and engaged owners trading at attractive valuations, recently expanding into Chinese equities at exceptional valuations and oil & gas through International Petroleum, while maintaining conviction that good governance and owner-operators drive superior long-term returns.
Manager expects continued opportunities in undervalued Chinese companies and energy sector, while maintaining focus on companies with rational owners and attractive valuations. Plans to potentially dive deeper into individual China investment hypotheses in 2024 annual letter.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Oct 1 2024 | 2024 Q2 | DIDI, HTHT, IPCO.TO, NTES, PRX.AS, YUMC | China, Esg, Governance, oil, value | IPCO.TO | RV Capital returned 28.9% in H1 2024, making first oil investment via International Petroleum and expanding China exposure with NetEase, Yum China, H World, and Didi. Manager sees exceptional valuations in China with blue-chips at single-digit P/Es. Extensive ESG discussion criticizes current frameworks while supporting underlying principles. Focus remains on owner-operators with attractive valuations. |
| Jan 10 2023 | 2023 Q3 | CACC, CRM, CVNA, GLJ.DE, IBKR, META, PDD, PRX.AS, RYM.AX, WIX | Concentration, global, Long/Short, Quality, value | - | Business Owner TGV employs concentrated value investing with a ten-year investment horizon, holding companies with sustainable competitive advantages and exemplary management at attractive prices. The globally diversified portfolio of ten holdings has delivered 29.9% YTD returns and 13.7% annualized returns since 2008 inception, reflecting disciplined selection of exceptional long-term opportunities. |
| Jun 30 2023 | 2023 Q2 | CACC, CRM, CVNA, IBKR, META, PRX.AS, RYM.NZ, WIX | Concentration, global, Long Term, Quality, value | - | Concentrated global value fund targeting quality businesses with strong management at attractive prices. Maintains high conviction positions across technology, financial services, and healthcare sectors. Strong 2023 performance with 27.1% YTD returns demonstrates the effectiveness of patient, long-term capital deployment in undervalued opportunities with durable competitive advantages. |
| Mar 31 2023 | 2023 Q1 | CACC, CRM, CVNA, IBKR, META, PRX.AS, WIX | Concentration, global, Long Term, Quality, value | - | Business Owner TGV is a concentrated global value fund that invests like a business owner in quality companies with competitive advantages and rational management. After a difficult 2022, the fund rebounded strongly in Q1 2023 with 15.9% returns, maintaining its long-term focus on businesses expected to flourish over ten-year horizons. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2024 Q2 |
OilFirst investment in oil and gas sector through International Petroleum, an oil company with production in Canada, France, and Malaysia. Manager views oil as essential product that cannot be eliminated despite environmental concerns, providing hedge against geopolitical disruptions. IPCO offers attractive valuation with substantial free cash flow generation expected. |
Energy Commodities Geopolitical Valuation Cash Flow |
ChinaAdded multiple Chinese investments including NetEase, Yum China, H World, and Didi. Manager describes valuations as most astonishing of career, with blue chip companies trading at mid-single to low double digit P/Es despite strong fundamentals. Acknowledges significant risks but believes upside compensates for downside. |
Valuation Risk Growth Technology Consumer |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 1, 2024 | Fund Letters | RV Capital | IPCO.TO | International Petroleum Corporation | Energy | Oil & Gas Exploration & Production | Bull | Toronto Stock Exchange | Canada, Commodity Producer, Cyclical, energy, Equity, family ownership, Free Cash Flow, M&A, Oil & Gas, Share Buybacks, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| IPCO.TO | IPCO is an oil and gas company with production in Canada, France, and Malaysia. It is based in Vancouver, Canada, and has a dual stock market listing in Canada and Sweden. Its market value is around US$1.5 billion. IPCO produces approximately 46'000 to 48'000 barrels of oil equivalent per day. IPCO's track record since its inception has been spectacular. It started out with little production or reserves, but had the advantage of owning some producing assets and a debt-free balance sheet. Today, its reserves have increased by 16x, and its share price has quadrupled. |
| NTES | In the first half of the year, I added one additional Chinese company to the portfolio - NetEase, a video gaming company. |
| YUMC | Since the end of the period, I added three more - Yum China (the operator of KFC and Pizza Hut in China). The most aggressive is Yum China, which is returning US$1.5 billion p.a. on a market cap of $13 billion at our cost, equivalent to a 12% shareholder return. |
| HTHT | Since the end of the period, I added three more - H World (the second-largest Hotel company in China). |
| DIDI | Since the end of the period, I added three more - Didi (the dominant rideshare platform in China). |
| PRX.AS | Each investment is around 3% of the portfolio except for Prosus (a proxy for Tencent), which is around 10%. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
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| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||
