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 20, 2026
The London Company Income Equity portfolio posted a net return of -3.6% (-3.4% gross) in the third quarter of 2026, trailing the Russell 1000 Value Index gain of 2.6%. Year-to-date, the strategy delivered a net return of 12.6% compared to 19.3% for the benchmark. Relative performance was pressured by stock selection and sector allocation, notably an overweight stance in lagging Industrials and an underweight position in outperforming Health Care. The strategy was also impacted by benchmark reconstitution dynamics, having missed a cyclical rally in memory and semiconductor capital equipment prior to their removal from the index, while facing renewed strength from newly introduced mega-cap technology constituents in the value benchmark. From a macroeconomic perspective, manager commentary highlighted a bifurcated market regime marked by resurgent inflation pressures and tightening monetary policy. The Federal Reserve initiated a 25 basis point rate hike during September, its first increase since 2023, propelling 10-year Treasury yields to levels not seen since 2002. Elevated borrowing costs and higher crude prices stemming from escalating Middle East tensions compressed equity valuations. The investment team noted that headline market strength remains exceptionally narrow, driven by massive artificial intelligence infrastructure spending that echoes historical buildout cycles prone to interim drawdowns. Portfolio activity reflected disciplined re-underwriting toward high-quality, cash-generative franchises. The strategy initiated a new position in Alphabet Inc. through mandatory convertible preferred shares (GOOGM/GOOGN) yielding approximately 6.25%, capitalizing on the company's full-stack AI infrastructure buildout. Cisco Systems (CSCO) was trimmed following share price strength to balance position sizing. Conversely, the portfolio completely exited Crown Castle (CCI) due to muted carrier capital expenditures and competitive headwinds, reallocating capital toward higher-conviction compounders with conservative balance sheets and durable payout profiles.
The strategy invests in high-quality, dividend-paying equities with conservative leverage and superior returns on invested capital to deliver durable income, capital preservation, and attractive risk-adjusted returns across full market cycles.
The economic backdrop remains supported by solid growth and improving business activity, but mounting headwinds from Fed tightening, elevated Treasury yields, and energy prices warrant portfolio discipline. Management anticipates that high-quality attributes—strong returns on capital, conservative balance sheets, and durable dividends—will provide essential downside protection and relative outperformance as fundamental realities reassert themselves.
Moderate Conviction Bullish
Market Conviction
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Forward Guidance
Language Signal
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Top Conviction Themes
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