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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Castlebay prioritises long-term preparation and 'cornered resource' moats over short-term market forecasting, actively recycling capital in 2025 to position the portfolio for a strong valuation reversal relative to the UK market."
Castlebay's December 2025 investor letter utilizes the historical lens of Lord Nelson's victory at Trafalgar to advocate for preparation and structural clarity over short-term market reaction. It introduces the concept of a 'Cornered Resource' (from Hamilton Helmer's Seven Powers), showcasing how key holdings BAT, Diageo, and Compass Group utilize time, regulatory, and contractual advantages to secure durable cashflows. Operationally, the fund experienced higher-than-average turnover (20%) in 2025 due to active capital recycling, initiating stakes in Greggs and AJ Bell, while trimming Admiral, NEXT, Compass, and exiting AutoZone. Performance-wise, the fund was flat in 2025 against a 22%+ UK market return driven largely by banks and commodity names, but the manager highlights the fund's superior quality metrics (35% ROE, 24% Operating Margin) and compelling valuation (5.5% FCF yield) as a strong signal for future performance recovery.
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