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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Greenhaven Road returned 25% YTD through Q2 2023, focusing on small-cap value opportunities with clear improvement catalysts. Manager emphasizes patience and long-term value creation, believing time favors competitively advantaged businesses."
Greenhaven Road Capital returned 8% net in Q2 2023, bringing YTD returns to 25%. Manager Scott emphasizes his one day closer philosophy, believing time favors competitively advantaged businesses despite short-term market volatility. The portfolio consists primarily of small-cap companies undergoing business transformations or benefiting from specific catalysts. Key holdings include Hagerty, which is integrating 480,000 State Farm policies and expanding its classic car marketplace; Lifecore, a CDMO business likely to be sold at a premium after resolving debt issues; and Sphere Entertainment, opening its $2.3B Las Vegas venue in September. The manager sold positions in Elastic, Patrizia, and Clarus to fund higher-conviction opportunities. Despite a challenging macro environment including rising rates, inflation, and geopolitical tensions, the manager believes portfolio companies will continue fundamental progress. He expects the 10-year cycle of large-cap outperformance to eventually favor smaller companies, positioning for multiple expansion as business improvements become reflected in share prices.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evident through concentrated portfolio of 10-15 named positions with detailed thesis explanations. Manager provides specific catalysts, timeframes, and return expectations for each holding. Strong declarative language about business improvements and value realization paths.
Growth Outlook
Manager acknowledges significant macro challenges including war, inflation, and rising rates, but expresses cautious optimism that waters ahead appear less choppy. Believes in eventual resolution of banking issues and rate peaks, though maintains realistic view of current environment.
Risk Appetite
Portfolio remains concentrated in small-cap growth stories with clear catalysts. Manager actively deploying capital into new opportunities like Sphere Entertainment while maintaining conviction positions. Some hedging through short positions but overall risk-on positioning.
Capital Deployment
Moderate deployment activity through rotation - selling Elastic, Patrizia, and Clarus to fund new positions like Lifecore and Sphere Entertainment. No explicit cash level changes mentioned, suggesting capital rotation rather than net deployment or de-risking.
Forward Guidance
Manager selectively adding to positions and funding new opportunities by selling others. Expresses confidence in long-term thesis but acknowledges timing uncertainty for catalysts. Moderate deployment bias with focus on highest-conviction ideas.
Language Signal
Language is predominantly constructive with frequent use of opportunity, attractive, and growth terminology. Balances optimism about individual holdings with realistic assessment of macro challenges. More bullish than bearish directional language overall.
Perceived Risk
Manager acknowledges multiple meaningful risks including recession potential, geopolitical tensions, inflation, and rate environment. Discusses specific business risks like customer loss at Digital Turbine. Risk discussion is substantial but not alarmist.
Opportunity Density
Manager describes attractive opportunity set with multiple new positions being added and clear catalysts across portfolio. References small-cap underperformance creating opportunities and ability to find compelling ideas despite macro challenges.
Time Horizon
Strong emphasis on multi-year thesis realization with one day closer philosophy. Manager discusses 2-5 year improvement paths for most holdings and explicitly references playing the long game. Some near-term catalysts mentioned but overall patient capital approach.
