PerformanceThe portfolio returned 20.21% after all fees* during the six months to 30 June 2026. This compares with a return of 12.74% from the MSCI All Country World Index in GBP .* based on my largest and longest standing client of my Separately Managed Accounts (SMA) serviceSpecial Situations Global Equities is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.I am pleased with the result, although six months is too short a period from which to draw meaningful conclusions. Encouragingly, it is consistent with the account’s longer-term record, which has delivered a 39.5% CAGR since June 2023.Santec Holdings (6777.T)Santec was one of the largest contributors to performance during this period (along with Tobila Systems). When I first wrote about the company in May 2025, it was trading at just 6.5x EBIT. An extraordinary valuation for a consistently growing, high-margin business of this quality. I therefore took a maximum-sized position at the time and gradually trimmed it as the valuation increased.Its optical instruments division delivered exceptional growth and prompted guidance upgrades from management, largely driven by demand from the data centre buildout.The rerating was further fuelled by the possibility that Santec’s technology could play a larger role in the build-out of co-packaged optics (CPO). CPO is a key technology for the next generation of data centres, placing high-speed optical connections beside computer chips so they can move far more data while using less power and producing less heat.After an approximately 700% return in one year, I have now largely exited the position. This was entirely a valuation decision rather than any loss of confidence in the business. As the share price rose, the potential downside increased and the risk-reward became less attractive. The subsequent sell-off has reinforced the importance of continuing to monitor valuation, even when the underlying thesis remains intact.I still believe Santec is attractively valued following the recent selloff, and could benefit from further CPO developments and continued revenue growth, so I have retained a smaller position. This reflects my approach of allowing winners to run while the thesis remains intact, but trimming when the prospective risk-reward no longer justifies a large portfolio weightA new exceptional businessI have a new investment that meets all the criteria I look for in an exceptional opportunity.I intend to publish a full write-up soon. But before releasing the research more widely, I have a responsibility to ensure that my recent new investment partners are properly invested first.I look forward to sharing the investment thesis with my paid subscribers before the end of August and explain why I believe it is such an unusual opportunity.Greater clarity about my approachWriting down my investment philosophy has helped me become clearer about the opportunities I most want to pursue.I will occasionally invest in special situations, such as Capricorn Energy (most recently), when I believe the risk-reward is unusually attractive. However, what I really want to spend most of my time doing is searching for exceptional, overlooked businesses that meet my criteria.That is the research I enjoy most, where I believe my strengths lie and where I see the best long-term balance between risk and reward.These companies are difficult to find, but I want to become more disciplined about keeping the majority of my time and capital focused on searching for them.Finding the right structureI have continued exploring the options for a longer-term fund structure.The current separately managed account structure has been extremely valuable in allowing me to establish the strategy and build a track record.However, it has two significant limitations:I cannot charge a performance fee,It does not provide gross roll-up. Creating an ongoing tax drag for my investment partners and me.I am therefore considering which structure would create the strongest long-term alignment between the strategy and its investors.I am still looking for a long-term anchor partner ($10m+ investment) who shares my approach and can help me build the strategy on the right foundations. Current AUM has reached around $7m.Building my online reachOver the last few months, I have increasingly recognised how important Substack and social media can be in helping aligned future investment partners discover my work and understand how I invest.This has already worked extremely well, and I intend to continue expanding my presence online.I have also recorded an interview with The Microcap Club, which I think you will enjoy and find valuable. Towards the end, I discuss my worst investment and the lessons learned from it that helped shape my current strategy. This will be released towards the end of August.The simplest way to support me on this journey is to keep liking, sharing and commenting on my work. Even a short comment makes a real difference.I would also be very grateful for introductions to podcasts, interviewers or anyone else you think I should speak with.Thank you to the vocal followers who regularly interact, challenge my thinking and share ideas. I also appreciate that many more people read quietly from the sidelines, and I am equally grateful for your support.If anyone has any questions or wants to get in touch, please send me a direct message. I’m always happy to hear from you!Thank you all again for your support, it means the world to me!Best wishes,Joe KayeInvestment ManagerDisclaimerJoe Kaye is a trading name of Albert E Sharp LLP.The views expressed in this document are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument. The views reflect the views of Albert E Sharp LLP at the date of this document and, whilst the opinions stated are honestly held, they are not guarantees and should not be relied upon and may be subject to change without notice. Investments entail risks. Past performance is not necessarily a guide to future performance. Investments in overseas stocks are subject to currency risk. There is no guarantee that you will recover the amount of your original investment. The information contained in this document does not constitute investment advice and should not be used as the basis of any investment decision. Any references to specific securities or indices are included for the purposes of illustration only and should not be construed as a recommendation to either buy or sell these securities or invest in a particular sector. If you are in any doubt, please speak to us or your financial adviser as appropriate.Issued by Albert E Sharp LLP which is authorised and regulated by the Financial Conduct Authority. © Albert E Sharp LLP 2026. Registered in England & Wales with the partnership number OC339858Special Situations Global Equities is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.