Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
White Brook Capital's 2025 commentary reveals a manager navigating multiple market dynamics with selective conviction. The firm operates three strategies: an Ethical S&P 500 replacement that performed in line with the index, a Small Cap Absolute Growth strategy that vastly exceeded expectations, and a new All Cap strategy launched after shutting down an underperforming midcap fund. The manager expresses skepticism about AI spending efficacy and the bitcoin treasury company mania, which he believes is ending as these companies now trade below their bitcoin reserves. Portfolio positioning includes overweight housing exposure through Builders FirstSource and Floor & Decor, semiconductor leaders Nvidia and Taiwan Semi as AI rent extractors, and a concentrated healthcare focus in small caps. Key macro concerns include consumer spending divergence across income levels, softening labor markets, and uncertain inflation trajectory. The manager feels optimistic about finding new return pockets across market caps while maintaining discipline around valuation and seeking potential doubles rather than modest gains.
White Brook Capital focuses on finding potential doubles across market capitalizations by investing in best-in-class operators during periods of weak stock prices, with particular emphasis on small cap growth opportunities and selective positioning in AI beneficiaries while avoiding overvalued manias.
The manager feels as good about owning a nimble portfolio of stocks with the ability to find new pockets of returns as they have since starting the firm. They are confident in the future of the new All Cap strategy and expect continued success in the near term for the Small Cap strategy.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 31 2026 | 2025 Q4 | BLDR, FND, GOOG, JAKK, MSFT, MSTR, NVDA, PTLO, RPID, TSM | AI, crypto, growth, healthcare, inflation, semiconductors, small caps, value | - | The efficacy of AI expenditures started to be questioned during Q4 2025. Companies like Microsoft continue spending aggressively on cloud capacity, but value is now… |
| Oct 16 2025 | 2025 Q3 | TGT, TTSH | Artificial Intelligence, Housing, Market Bubble, small caps, Value Investing |
PTLO US TGT US |
White Brook critiques AI euphoria and speculative valuations, comparing the boom to the fiber-optic bubble. The fund remains cautious but opportunistic, favoring companies with real… |
| Jul 15 2025 | 2025 Q2 | - | Compounding, Concentration, free cash flow, Governance, Quality | - | The commentary centers on owning a concentrated portfolio of high-quality businesses with durable competitive advantages. Management emphasizes free cash flow generation, strong governance, and long-term… |
| Apr 5 2025 | 2025 Q1 | - | - | - | - |
| Jan 27 2025 | 2024 Q4 | AFYA, BOX, DNUT, GBRE, GBX, INFU, KAR, LTH, MOS, OKTA, PTLO, RPID, W | - | - | - |
| Oct 22 2024 | 2024 Q3 | AFYA, BLDR, DNUT, OKTA, W | - | - | - |
| Jun 30 2024 | 2024 Q2 | AFYA, BLDR, GPRE | - | - | - |
| Apr 27 2024 | 2024 Q1 | PETQ, RILY | - | - | - |
| Jan 25 2024 | 2023 Q4 | BLDR, GPRE, MOS, RILY | - | - | - |
| Oct 20 2023 | 2023 Q3 | BLDR, GBX | - | - | - |
| Jul 15 2023 | 2023 Q2 | MOS, RILY, U | - | - | - |
| Apr 19 2023 | 2023 Q1 | AFYA, GBX, GPRE, ITRI, KAR, MOS, PSPC, RILY | - | - | - |
| Jan 25 2023 | 2022 Q4 | BOX, GBX, MOS, RILY | - | - | - |
| Apr 11 2022 | 2022 Q3 | BOX, GBX, ITRI, KAR | - | - | - |
| Jun 30 2022 | 2022 Q2 | AFYA, ITRI | - | - | - |
| Mar 31 2022 | 2022 Q1 | IAC, KAR, MHK, MTCH, QRTEA | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
CryptoFund focuses exclusively on Bitcoin accumulation through disciplined cycle-aware positioning. Manager shifted to defensive posture in Q3 anticipating correction, ending Q4 with two-thirds Bitcoin and one-third cash. Going forward, fund will hold only Bitcoin based on data showing altcoins have terrible odds with only 1-in-70 beating Bitcoin historically. |
Bitcoin Altcoins Cycles Accumulation Volatility | |
SemiconductorsMACOM Technology Solutions rose nearly +40% as the company experienced broad-based demand, similar to many semiconductor companies in 2025. The team exited Astera Labs following industry conference presentations that suggested emerging competitive risks and concerns over single customer concentration, while initiating a position in Credo Technology for AI-connectivity exposure. |
Demand Competition Connectivity Customer Concentration | |
Small CapsThe fund invests in a portfolio of competitively advantaged small and medium-sized businesses, which remained out of favor for most of the quarter. The strategy of owning leading small-cap businesses has been the foundation since inception, delivering 354 basis points of annual outperformance over the benchmark since inception despite recent headwinds. |
Growth Outperformance Benchmark Russell Businesses | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
Small CapsThe fund invests in a portfolio of competitively advantaged small and medium-sized businesses, which remained out of favor for most of the quarter. The strategy of owning leading small-cap businesses has been the foundation since inception, delivering 354 basis points of annual outperformance over the benchmark since inception despite recent headwinds. |
Growth Outperformance Benchmark Russell Businesses | |
ValuationAI-related companies continue to command premium valuations while other sectors remain reasonably priced. This valuation divide continues to guide investment activity, with the fund remaining wary of companies trading at exceedingly high valuations that imply exceptional multi-year earnings growth. |
Premium Divide Discipline Stretched Reasonable | |
| 2025 Q2 |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 16, 2025 | Fund Letters | Basil F. Alsikafi | PTLO US | Portillo’s Inc | Consumer Discretionary | Restaurants | Bull | NASDAQ | growth, management, Margins, Restaurants, turnaround, valuation | Login |
| Oct 16, 2025 | Fund Letters | Basil F. Alsikafi | TGT US | Target Corp | Consumer Discretionary | General Merchandise Stores | Bull | NYSE | cashflow, consumer, dividend, management, retail, turnaround | Login |
| TICKER | COMMENTARY |
|---|---|
| BLDR | This is the largest supplier of building materials in the United States. They sell lumber and prefabricated products such as trusses and millwork to homebuilders, often helping the builders improve efficiency. The company has been buying up industry competitors. We bought a small amount of stock in 2024 at the price of US$149 per share. I estimated this represented approximately 12 times earnings. However, lumber prices and home building activity are cyclical, and both continued to decline from elevated levels after the COVID-19 crisis. I still like the company and the investment idea. I think the company will benefit from continued industry consolidation. The stock is currently trading at US$105 which is about 17 times earnings. I believe the company's earnings could be temporarily depressed but we have not yet bought more shares. Builders FirstSource is now one of our smallest investments. |
| FND | Floor & Decor (FND) is a business I've wanted to own shares in for some time. They are the leading warehouse-style flooring store with higher in-stock inventory selection and lower prices than scaled competitors, and have been taking market share for years if not decades. In my opinion, they are following the Home Depot model to disrupt a profitable subcategory of home improvement. I still believe the current purchase price is not obviously cheap on near-term earnings, but the purchase price does reflect an attractive valuation on long-term margins. The company's current EBIT margins are about 30% below their long-term pre-COVID levels, and I believe EBIT margins should continue to scale towards the low-to-mid-teens as the company builds out its store base. Current sales per store are depressed by a post-COVID hangover and higher interest rates which have depressed existing home sales, a key catalyst for renovation activity. Higher sales per store will lead directly to higher store-level margins, which flow nicely through to EBIT margins. I believe, with a more favorable existing home sales macro backdrop, that sales can grow at double digits with significant flow-through to the bottom line. It would not surprise me to look a couple years out and see the company generating $6.5B of sales at 7.0% net margins, which would mean the company is trading at 16x that admittedly uncertain (due to macro uncertainty) future earnings with nearly a decade of future store growth and comp growth. I see the company generating nearly $12 earnings per share 10 years from now, when it's store growth plan should be essentially complete. |
| GOOG | Alphabet's Q4 performance marks a significant triumph, characterized by a rare beat and raise narrative across all critical business segments. The company's recent earnings report was driven by a balanced contribution from its legacy Search and YouTube divisions, with Google Cloud emerging as the standout performer. Cloud's revenue growth reached an impressive 34%, and it boasts an extraordinary $155 billion backlog, a nearly double increase compared to the previous quarter. This remarkable transformation has propelled Cloud from a margin drag to a high-octane profit center. |
| JAKK | The All Cap Strategy also borrows from the highest conviction theses in liquid stocks owned in the Small Cap Strategy and has been a beneficiary of Rapid Micro Biosystems (RPID) rapid rise while also holding the heretofore underwhelming JAKKS Pacific, Inc (JAKK). |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| MSTR | Our original cost basis is around $17/share. Strategy operates as the leader in pioneering corporate bitcoin strategy. The company holds the largest corporate bitcoin stash (by far). It monetizes this through fixed-income securities like convertible notes and structured debt. The case for MSTR is leveraged bitcoin upside under proven capital allocators, with a steady software business on the side. 2025 was a tough year for MSTR. The stock declined 47.53% thanks to BTC volatility and market rotation away from high-conviction names. Putting the 'treasury company' hype aside, which now includes many MSTR copycats, I still think the core thesis holds. |
| NVDA | Capital spending from Google, Microsoft, Amazon, Meta, OpenAI, and more have led to Nvidia becoming the Rrst 5 trillion market cap company. |
| PTLO | While we'll miss, as we have so far with Portillo's Inc (PTLO), if it's in the portfolio, our belief is that there's the potential to double our investment. |
| RPID | The All Cap Strategy also borrows from the highest conviction theses in liquid stocks owned in the Small Cap Strategy and has been a beneficiary of Rapid Micro Biosystems (RPID) rapid rise while also holding the heretofore underwhelming JAKKS Pacific, Inc (JAKK). |
| TSM | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||