| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 41.6% | 52.7% | 13.5% | -18.8% | 49.0% | 5.1% |
Starvine Capital delivered exceptional returns in 2025, with the Flagship Strategy up 41.6% and Mid-Large Cap Strategy up 37.0%, marking the third-strongest year on record. However, U.S. dollar depreciation against the Canadian dollar detracted approximately 3% from performance, reflecting the high proportion invested in U.S. companies. The strong performance was driven by broad gains across most positions with no significant detractors. Market volatility in spring 2025, triggered by trade tariff uncertainty, created a sharp sell-off that saw strategies down over 23% year-to-date at the April trough. The manager opportunistically added exposure during this decline at attractive prices, increasing conviction in existing holdings and initiating new positions. One top holding became subject to a takeout battle after years of underperformance. The manager emphasizes these returns are unsustainable, maintaining focus on owning quality companies at reasonable valuations for long-term compounding while taking advantage of market dislocations when they arise.
Own above-average quality companies purchased at cheap-to-fair valuations to create favorable asymmetry, while opportunistically taking advantage of market dislocations for long-term capital compounding.
The manager maintains that returns generated over the past two years are not sustainable and should be beyond question. The overarching objective remains unchanged: to own companies with characteristics that allow capital to compound at a reasonable rate over the long term, while opportunistically taking advantage of market dislocations. Using a baseball analogy, the aim is to consistently hit singles and doubles, with 2024 and 2025 representing anomalous home runs.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 13 2026 | 2025 Q4 | - | Canada, Compounding, long-term, Quality, value, volatility | - | Starvine delivered 41.6% returns in 2025 despite currency headwinds, capitalizing on spring volatility from trade tariff fears to add exposure at attractive prices. The manager emphasizes these exceptional returns are unsustainable, maintaining focus on quality companies at reasonable valuations for long-term compounding while opportunistically exploiting market dislocations. |
| Jul 23 2025 | 2025 Q2 | - | Alternative Asset Managers, Canada, long-term, Quality, Trade Policy, value | - | Starvine delivered solid H1 2025 returns despite tariff-driven market volatility, with portfolio businesses proving resilient to trade impacts. Ten-year track record reflects evolution from valuation-focused spin-off investing to quality-driven durable compounding strategy. Manager emphasizes long-term holdings of high-quality businesses while maintaining disciplined risk management and continuous portfolio optimization in dynamic market environment. |
| Jan 30 2025 | 2024 Q4 | - | Alternative Asset Managers, Bottom-up, Canada, Currency, value | - | Starvine delivered record 52.7% returns in 2024, driven by alternative asset manager rebounds and U.S. dollar strength. The manager maintains strong U.S. exposure for superior opportunity breadth despite currency risks. Investment approach focuses on quality companies with great management, durable moats, and attractive valuations using the MCARV framework for selective bottom-up stock picking. |
| Jul 27 2024 | 2024 Q2 | - | AI, Canada, Market Concentration, small caps, Tech Valuations, value | - | Starvine returned 10.8% YTD while warning of dangerous AI-driven concentration in mega-cap tech stocks. With top 8 S&P 500 names now comprising 30% of the index, Ko sees significant downside risk and prefers small/mid-cap value opportunities. Maintains bottom-up approach focused on absolute returns and quality businesses at reasonable prices. |
| Jan 31 2024 | 2023 Q4 | AAPL, AMZN, GOOGL, META, MSFT, NFLX, NVDA, TSLA | Benchmarks, large cap, Mega Cap, Performance, technology | - | Starvine Capital posted solid 2023 returns of 13.5-15.2% but lagged the mega-cap tech driven S&P 500. Manager Steven Ko maintains his disciplined bottom-up approach despite acknowledging the large-cap versus small-cap performance divide, focusing on long-term compounding rather than timing mean-reversion trades. |
| Jun 30 2023 | 2023 Q2 | AAPL, AMZN, GOOGL, META, MSFT, NFLX, NVDA, TSLA | AI, Canada, inflation, small caps, technology, value | - | Starvine outperformed in H1 2023 while avoiding AI speculation mania affecting mega-cap tech. Small-cap valuations remain at historical discounts versus large caps, creating opportunities similar to past downturns. With inflation easing and rate hikes slowing, the manager sees continued rally potential while maintaining focus on quality companies at defensive valuations. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process as a force multiplier for human judgment, not a replacement. The firm uses NotebookLM, Gems in Gemini, and Claude Code for efficiency and risk analysis. While AI creates opportunities in the application layer, the infrastructure narrative may be overblown with significant structural headwinds for software companies. |
Artificial Intelligence Machine Learning Automation Software Technology |
SemiconductorsLattice Semiconductor represents an under-appreciated AI winner with immediate gains and longer-term optionality. The company's focus on efficiency rather than maximal performance creates powerful counterpositioning in FPGAs, particularly for AI server security functions and Post-Quantum Cryptography. |
FPGAs Chips Hardware Security Edge Computing | |
CybersecurityLattice's FPGAs serve as the Root of Trust chip in hyperscaler server architectures, acting as security sentinels. Their Post-Quantum Cryptography secure chips are the only ones on the market, future-proofing against quantum attacks and making them unlikely to be replaced by ASICs. |
Security Encryption Quantum Infrastructure Protection | |
SoftwareSoftware companies face structural headwinds from AI, including increased customer bargaining power, pricing pressure, and lower barriers to entry for competitors. While AI can help defend margins through efficiency, it fundamentally challenges the sector's growth assumptions and creates deflationary pressures. |
SaaS Enterprise Software Pricing Competition Disruption | |
| 2025 Q2 |
QualityManager evolved from valuation-driven approach to emphasizing fundamental business quality. Introduced checklist in 2017 placing greater emphasis on business quality rather than relying heavily on valuation setups. Philosophy shifted from seeking great returns to prioritizing durable compounding with deeper appreciation for rarity and resilience of certain holdings. |
Business Quality Durable Compounding Fundamental Analysis Long-term Holdings |
ValueManager discusses evolution away from pure valuation focus while acknowledging valuation remains important as part of broader investment mosaic. Uses grocery store cashier line analogy where choosing shortest line doesn't always get you out faster, sometimes paying higher valuation multiple is wiser for businesses with strong earnings growth. |
Valuation Value Traps Intrinsic Value Price-to-Value | |
Trade PolicyFirst half 2025 brought steepest market drawdown since COVID due to uncertainty surrounding trade tariff proposals from Trump administration. Manager notes businesses owned were largely insulated in terms of free cash flow exposure, validated during Q1 earnings calls where management teams reiterated limited impact. |
Tariffs Trade Uncertainty Trump Administration Cash Flow Impact | |
| 2024 Q4 |
Alternative Asset ManagersLarge-cap alternative asset managers rebounded sharply in 2024 after facing pressure in 2022 due to rising interest rates. These companies continued to grow their businesses despite market skepticism, leading to a slingshot effect as share prices surged to reflect both mean reversion and recognition of increased intrinsic value. |
Asset Managers Rebound Interest Rates Intrinsic Value |
ValueThe manager employs a value investing approach, aiming to start below fair value like hanging from stretched rubber bands. Value investors can win through mean reversion or multiple expansion, and by staying on as the elevator ascends driven by earnings growth. |
Value Investing Mean Reversion Multiple Expansion Fair Value | |
| 2024 Q2 |
AIManager discusses the AI narrative driving market imbalances, noting much market value has been created from the AI theme without evidence of increased free cash flows to support it. The AI euphoria began in early 2023 as ChatGPT proliferated, contributing to tech company outperformance. |
Artificial Intelligence ChatGPT Tech Valuations Market Concentration |
Small CapsThe letter highlights the continued disparity between small caps and large caps, with small and mid-cap companies trading at lower forward P/E ratios compared to large caps. The manager believes there will be a reversion-to-the-mean trade to be made, though has not deliberately repositioned based on this belief. |
Small Cap Value Market Cap Disparity Valuation Gap Mean Reversion | |
ValueThe investment approach is predicated on value principles, focusing on attaching to good businesses and not overpaying. The manager emphasizes a seemingly naive approach of underpaying for quality businesses can lead to decent compounding over time. |
Value Investing Business Quality Compounding Bottom-up Selection | |
| 2023 Q2 |
AIAI is described as a disruptive technology that has captured investors' imaginations in 2023, but the fervor and speculation surrounding AI-associated stocks is reminiscent of market manias. Speculators have piled into AI-related companies without regard to valuation, with share prices moving on emotion rather than fundamentals. |
Artificial Intelligence Speculation Valuation Technology |
Small CapsSmall- and mid-cap stocks continue to trade at a discount relative to large-cap stocks compared to most points since 1999. The manager believes this presents an opportunity similar to past downturns, with potential for multiple expansion in concentrated mid-cap and below positions. |
Valuation Multiple Expansion Discount Opportunity | |
InflationInflation has been easing in the first half of 2023, which has led to a slowdown in the Fed's hiking of interest rates. Lower inflation readings are creating less tepid sentiment about future interest rate increases among market participants. |
Federal Reserve Interest Rates Economic Trends |
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