| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| 2024 |
|---|
| 35.2% |
Torghatten Capital delivered 35.2% returns in 2024, slightly outperforming the global index's 32.6%. The fund follows a quality-focused strategy built around three principles: quality can only be understood through comparison, simplicity and avoiding bad investments, and winners keep winning. The Quality Triangle framework evaluates companies on historical numbers, management clarity, and forecastability. The portfolio is concentrated in high-quality compounders like Visa (29.1% weight) and Constellation Software, which demonstrate strong competitive moats, high returns on capital, and predictable cash generation. The manager emphasizes long-term thinking, avoiding speculation in hyper-growth companies, commodities, and sectors with poor value creation. Key holdings include payment processors, software acquirers, and industrial companies with pricing power. The approach prioritizes inactivity and compound growth over trading, with continuous monitoring of intrinsic value gaps. Looking forward, most holdings are expected to generate 10% annual returns, with Evolution Gaming facing near-term headwinds but potential recovery.
Invest in high-quality companies with strong competitive moats, predictable cash flows, and excellent management that can compound capital at attractive rates over the long term.
The manager expects most holdings to return around 10% annually from current levels. Evolution Gaming faces near-term challenges from cyberattacks but could normalize growth by 2025. Medistim's growth has slowed but innovation continues with new products.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 11 2025 | 2024 Q4 | ATCO-A.ST, ATD.TO, BOUV.OL, CSU.TO, EVO.ST, INVE-B.ST, MEDI.OL, NVO, V | Compounding, fundamentals, long-term, Margins, moats, Quality, ROCE, value creation |
V CSU CN EVO SS V CSU.TO EVO.ST |
Quality-focused fund delivered 35.2% in 2024 through concentrated holdings in high-ROCE compounders like Visa and Constellation Software. Strategy emphasizes simplicity, avoiding speculation, and partnering with businesses that demonstrate pricing power and predictable cash generation. Portfolio weighted toward payment processors and software acquirers with strong competitive moats and excellent capital allocation track records. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2024 Q4 |
QualityThe fund focuses exclusively on high-quality companies with strong competitive advantages, trustworthy management, profitable operations, and smart capital allocation. Quality is defined through the Quality Triangle: historical numbers, management clarity, and forecastability. |
ROCE Moats Margins Compounding Fundamentals |
PaymentsVisa represents the largest holding at 29.1% weight, viewed as one of the best businesses globally with 31% ROCE, 69% gross margins, and positioned to benefit from the ongoing transition from cash to digital payments worldwide. |
Digital Payments Network Effects Transaction Processing Fintech |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 11, 2025 | Fund Letters | Arne Ulland | EVO SS | Evolution AB | Consumer Discretionary | Leisure Facilities | Bull | NASDAQ | Asia, cybersecurity, Gaming, Margins, valuation | Login |
| Feb 11, 2025 | Fund Letters | Arne Ulland | V | Visa Inc. | Information Technology | Data Processing & Outsourced Services | Bull | New York Stock Exchange | compounding, Margins, network, Payments, Regulation | Login |
| Feb 11, 2025 | Fund Letters | Arne Ulland | CSU CN | Constellation Software Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | Acquisitions, Capitalallocation, Decentralization, Incentives, Software | Login |
| Feb 4, 2024 | Fund Letters | Torghatten Capital | V | Visa Inc. | Information Technology | Data Processing & Outsourced Services | Bull | NYSE | Cash Displacement, digital payments, growth, high margins, network effects, payment processing, Regulatory risk, Roce | Login |
| Feb 4, 2024 | Fund Letters | Torghatten Capital | CSU.TO | Constellation Software Inc. | Information Technology | Systems Software | Bull | TSX | Canada, capital allocation, Decentralization, M&A Integration, ROIC, serial acquirer, Software, vertical market software | Login |
| Feb 4, 2024 | Fund Letters | Torghatten Capital | EVO.ST | Evolution AB | Consumer Discretionary | Casinos & Gaming | Bull | Stockholm Stock Exchange | Asia Growth, contrarian, Cyberattack, EBITDA margins, Gaming, live casino, Sweden, Value Investment | Login |
| TICKER | COMMENTARY |
|---|---|
| V | Visa (29,1% weight) experienced for a while a storm due to regulatory noise and while I must admit that the prosecutors wrote a very solid piece of research, in the end, I didn't find many solutions in the paper as an alternative to Visa. That part was pretty weak and there was no chance that a major disruption could happen shortly. When one took the stock price fall into account and compared it to the size of a potential fine, it was pretty clear that the correction was overdone. In my opinion, Visa continues to be one of the best businesses in the world with extremely solid fundamentals along with solid growth. The case is pretty simple if you ask me: The firm is operating with ROCE at 31%, gross margins at 69%, and free cash flow margins at 27%, and is expected to grow its earnings per share over the long run at 13% annually. |
| CSU.TO | Another holding that is firing on all cylinders is the Canadian vertical market software acquirer Constellation Software. What I admire so much about this company and the best serial acquirers is that they do very complicated things so well, and they do it over time. |
| MEDI.OL | Medistim is a fantastic company, but growth has slowed down and that will be the main thing to focus on going forward in 2025 as they continue to innovate and expand their new product MiraQ™ INTUI Software Platform. |
| EVO.ST | Evolution is naturally a stock I've been paying close attention to lately. There's been a lot of noise, and both investors and analysts are growing concerned that the company's moat is weakening, with EBITDA margins and growth either slowing or stalling. Right now, I'm focusing on the fundamentals and the potential for growth in Asia. According to the CEO, growth could normalize by 2025 if the cyberattack issues are resolved. However, it will likely take a few quarters before the company's countermeasures start to show results. My view is that the numbers are simply too attractive to ignore, and it feels like emotions are currently driving the narrative. I wouldn't be surprised if I ended up buying more in 2025. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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