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 Small Cap portfolio declined 2.5% net of fees in the third quarter of 2026, significantly outperforming the Russell 2000 Index decline of 7.2%, driven by favorable bottom-up stock selection and resilient downside capture. Year-to-date, the strategy has gained 7.6% net of fees compared to a 13.7% advance for the benchmark. Relative performance benefited from an underweight stance in Utilities, which lagged the broader market, though it was partially offset by an underweight exposure to Health Care. The portfolio maintained its disciplined low-beta, unleveraged capital orientation, holding ground as speculative rallies reversed. Macroeconomic conditions grew increasingly complex as the Federal Reserve enacted a 25 basis point rate hike, lifting the 10-year Treasury yield to its highest mark since 2002. Surging oil prices reignited inflation concerns while borrowing costs pressured lower-income consumer cohorts. Broader equity strength remained narrow and concentrated in mega-cap technology, masking underlying weakness across smaller-cap equities and emerging credit stress in lower-tier corporate debt. In response, the strategy emphasizes quality companies equipped with pricing power, conservative leverage, and sustainable dividend yields capable of navigating sustained cost of capital pressures. Portfolio activity reflected selective capital redeployment into durable franchises. The team initiated a new position in Churchill Downs Incorporated (CHDN), capitalizing on recent valuation compression to acquire an irreplaceable entertainment and gaming asset. Capital was also deployed to expand McGrath RentCorp (MGRC) to a full 3% position and add to Vontier Corp (VNT) on robust operating efficiency. Conversely, positions were liquidated in UniFirst Corporation (UNF) following its acquisition announcement and in Enovis Corporation (ENOV) due to diminished management confidence following an M&A transaction.
Focus on high-quality, profitable small-cap businesses with conservative balance sheets, high returns on unleveraged capital, and strong free cash flow generation acquired at reasonable valuations to deliver durable compound returns and downside protection.
Headwinds from tighter monetary policy, elevated yields, and living costs argue for investment discipline, but durable businesses with conservative leverage, high returns on capital, and reasonable valuations are well positioned as market fundamentals reassert themselves.
Moderate Conviction Bullish
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