The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 14, 2026
Spheria Global Smaller Companies Fund delivered a net return of 0.9% for the three-month period ending 30 September 2026, outperforming the MSCI World Small Cap Index benchmark return of -4.1% by 5.0% net of fees. For the month of September, the strategy returned -3.4% net, underperforming the benchmark's -1.3% decline by 2.1% as surging bond yields and cyclical pressures weighed on small-cap benchmarks globally. Strategy positioning remains anchored by a 6.3% cash buffer, alongside disciplined exposure spanning North America (56.6%), Japan (11.1%), the UK (6.7%), Australia (6.2%), and selective European markets, with core overweights concentrated in Industrials (23.4%) and Consumer Discretionary (17.1%). Macroeconomic conditions throughout the period were characterized by aggressive monetary tightening and escalating sovereign yields, highlighted by the US Federal Reserve increasing rates to 3.75%-4.00% and the 10-year Treasury yield closing at 5.29%. The manager notes that elevated energy costs and excessive capital consumption from artificial intelligence data center infrastructure have precipitated rate increases from central banks globally, including the ECB. Stress has surfaced across leveraged balance sheets, credit spreads, and housing activity, leading to indiscriminate selling across small-cap equities. The fund maintains a cautious stance toward speculative AI capital expenditure cycles, focusing instead on resilient, free-cash-flow-generative business models. Portfolio activity and attribution were led by standout operational strength in Applied Industrial Technologies and Bapcor, offset by short-term sentiment drags in Wise, Hemnet Group, and Rightmove. Wise experienced weakness related to European regulatory inquiries, which the manager views as an unwarranted compliance discount given 26% cross-border volume growth and ongoing market share gains. Conviction remains focused on self-funding compounders with clean balance sheets, where approximately 60% of portfolio companies maintain net cash positions.
Spheria invests in high-quality, cash-generative global small and microcap businesses with low financial leverage, sustainable competitive moats, and disciplined capital allocation trading at attractive valuations.
Spheria expects market conditions to remain volatile as rising interest rates test capital-dependent business models, but views current valuation dislocations across profitable, cash-generative small caps as a compelling entry point for patient investors.
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