| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 23.0% | - | - |
Staude Capital's GVF delivered a 4.4% adjusted NTA return during the December 2025 half-year, with discount capture strategies contributing 3.0% to performance. The manager extensively analyzes current market valuations, noting US shares trade at historically expensive levels with a forward P/E of 25.6, suggesting poor long-term returns based on historical patterns. Key contributors included HarbourVest Global Private Equity, where the discount narrowed from 40% to 28%, and aircraft leasing fund Amedeo Air Four Plus, which benefited from positive aircraft valuation developments. The biggest detractor was Empiric Student Property, which the manager exited completely due to student accommodation market weakness and lack of near-term catalysts. While acknowledging strong US economic fundamentals with 12.8% EPS growth and AI-driven earnings forecasts of 44% over three years, the manager questions whether even exceptional growth can justify current valuations. Trade policy concerns include tariffs adding 0.7% to inflation and costing households $600. The manager maintains a value-oriented approach focused on discount capture rather than market timing.
As value investors focused on discount capture strategies, the manager builds portfolios to generate returns through actively unlocking value within holdings rather than relying on market movements, maintaining lower risk characteristics while markets trade at historically expensive valuations.
The manager presents three potential scenarios: exceptional earnings growth that justifies current valuations, a period of poor returns as predicted by fundamentally-based forecasters, or the possibility that this time is different due to AI-powered transformation. They remain focused on value investing principles and generating returns through active value unlocking rather than relying on market movements.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 30 2026 | 2025 Q4 | AA4.L, DNA2.L, DNA3.L, ESP.L, HVPE.L, UTG.L | AI, earnings, global, inflation, Trade Policy, Valuations, value | - | US share markets are trading nearly as expensively as they ever have relative to history. The manager presents extensive analysis showing strong negative correlation between high valuations and future 10-year returns, with current forward P/E of 25.6 suggesting poor long-term prospects. Even using 3-year forward earnings estimates, markets still appear fully valued with limited upside potential. Artificial Intelligence continues to drive investor excitement and market performance. US company earnings are forecast to grow by 44% over the next three years, driven largely by expectations for AI companies to deliver on their lofty targets. The manager acknowledges AI as a key driver but questions whether even exceptional earnings growth can justify current valuations. Early studies show that approximately 90% of tariff costs are being borne by US consumers and companies, contrary to Trump administration narratives. Tariffs added 0.7% to US inflation in 2025, making typical households $600 poorer. The manager views this as a longer-term headwind to the US economy and questions the real negotiating leverage tariffs provide. The manager positions as a value investor focused on building a portfolio where they generate returns by actively unlocking value within holdings rather than relying on market movements. They do not own many assets that investors are most excited about currently, preferring to focus on discount capture strategies and undervalued opportunities. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
ValuationsEquity valuations remain elevated with the S&P 500 trading near 23x forward earnings, well above its long-term average of 15.6x. High valuations may increase market sensitivity to earnings disappointments and tend to constrain longer-term returns, reinforcing the importance of selectivity. |
Multiples Premium Earnings Risk Selectivity | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
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| AA4.L | Another positive contributor was the aircraft leasing fund, Amedeo Air Four Plus (AA4). The catalyst for AA4's strong share price performance was an announcement by another UK-listed fund, Doric Nimrod Air Three (DNA3), that it had reached an agreement to sell four Airbus A380s to Emirates for $45 million apiece. This improved on similar sales to Emirates by another fund, Doric Nimrod Air Two (DNA2), for $40 million apiece in 2024 and $35 million in 2023. As mentioned in previous commentaries, half of AA4's twelve aircraft are Airbus A380s leased to Emirates. The sales at DNA3 therefore had a positive potential read across for AA4, and the fund's shares re-rated accordingly. |
| DNA2.L | This improved on similar sales to Emirates by another fund, Doric Nimrod Air Two (DNA2), for $40 million apiece in 2024 and $35 million in 2023. |
| DNA3.L | The catalyst for AA4's strong share price performance was an announcement by another UK-listed fund, Doric Nimrod Air Three (DNA3), that it had reached an agreement to sell four Airbus A380s to Emirates for $45 million apiece. |
| ESP.L | Turning to detractors, the biggest disappointment was our investment in Empiric Student Property (ESP), a London-listed real estate investment trust (REIT). As regular readers will recall, the underlying supply/demand dynamics of the purpose-built student accommodation market have been very favourable for some time, and GVF has been an investor in ESP in varying size for many years. In early CY 2025 we added to our holding, believing the REIT to be greatly undervalued, and a prime takeover candidate in a UK REIT sector that was seeing a lot of M&A activity. This thesis was ultimately borne out, as in mid-2025 ESP announced it had received a merger proposal from a larger rival, Unite Group (UTG), on terms that represented – in theory – a 10% premium based on ESP's and UTG's undisturbed share prices. However, shortly after the merger was announced, UTG and ESP's prices came under pressure, amid evidence of a slower student booking cycle and fears of what this might mean for future earnings growth. The fall was particularly pronounced in October when UTG confirmed that its occupancy levels for academic year 25/26 had undershot the company's targets. If this surprisingly poor student accommodation sales cycle was only a blip, the shares appeared cheap. However, we have struggled to find enough evidence that this will be the case with a high degree of certainty. Absent that, we saw no near-term catalysts to realise value and decided there were better places for GVF's capital to be deployed. We exited the position in full during the December half-year period. |
| HVPE.L | Harbourvest Global Private Equity (HVPE) and Pantheon International (PIN), our two private equity names, were solid contributors over the quarter on the back of discount tightening. Our thesis for this portfolio theme is that (i) notwithstanding recent narrowing, discounts for these two funds of funds are still far too wide and have been persistently so for too long, and (ii) a stark arbitrage is available from selling underlying third-party fund interests at tight discounts in the secondary market to fund share buybacks at much wider discounts. We were thus pleased to see HVPE announce in mid-December a $300m sale (7% of NAV) of five fund positions at a 6% discount to end-June NAV. The proceeds will be used to repay debt and buy back shares. |
| UTG.L | This thesis was ultimately borne out, as in mid-2025 ESP announced it had received a merger proposal from a larger rival, Unite Group (UTG), on terms that represented – in theory – a 10% premium based on ESP's and UTG's undisturbed share prices. However, shortly after the merger was announced, UTG and ESP's prices came under pressure, amid evidence of a slower student booking cycle and fears of what this might mean for future earnings growth. The fall was particularly pronounced in October when UTG confirmed that its occupancy levels for academic year 25/26 had undershot the company's targets. |
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