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 Jul 29, 2026
The London Company SMID Cap portfolio returned 11.8% net in Q2 2026, underperforming the Russell 2500 Index which gained 20.3% as the market rewarded high-beta, momentum-driven names over quality fundamentals. The rally was fueled by AI infrastructure spending and strong earnings, with semiconductors staging a historic rebound. Top contributors included Entegris, benefiting from improving semiconductor demand and AI investment, Credit Acceptance on improving credit performance, and Qualys as cybersecurity sentiment improved. Quality was among the weakest factors, creating a headwind as only 25% of profitable Russell 2500 companies beat the benchmark. The manager made no trades during the quarter, maintaining conviction in durable, high-quality businesses positioned to compound over full cycles. Looking ahead, the outlook remains broadly constructive but increasingly cautious, as AI capex shows fragility with negative hyperscaler free cash flow, valuations are elevated, and Fed rate cuts face headwinds from sticky inflation. The manager expects more modest equity returns ahead and believes their quality-focused, high active share approach will serve as important portfolio ballast.
The London Company SMID Cap strategy focuses on high-quality, durable businesses with strong competitive positions and free cash flow generation, maintaining discipline through market cycles rather than chasing momentum or high-beta opportunities.
The manager's outlook remains broadly constructive, supported by a healthy earnings backdrop, resilient economic data, and the prospect of meaningful long-term productivity gains from artificial intelligence. However, headwinds facing market leadership are accumulating, including fragile AI capex dynamics with negative free cash flow at hyperscalers, fluid geopolitical and tariff conditions, and difficulty achieving further Fed rate cuts against sticky inflation. With historic index concentration, elevated valuations requiring near-flawless execution, and dividend yields near multi-decade lows, the manager believes it is prudent to expect more modest equity returns ahead. The tone is cautiously optimistic with a strong emphasis on discipline and quality over momentum.
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