Institutional Research Archive

Hedge Fund Letters Archive

Browse the world's most comprehensive database of hedge fund investor letters, sorted by recent quarter. Access primary source research from leading institutional managers.

Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

Home Letters Funds Account

Farrer 36 Asset Management 2024 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Farrer 36 Asset Management)

Primary Source Intelligence • Q2 2024 Letter Analysis

Farrer 36 Asset Management Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Farrer 36 Asset Management. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized-14.31%

Digest Analysis

Quick Take

"Concentrated value portfolio has severely underperformed over three years due to transformation stories not working in volatile markets and missing Mag 7 rally. Manager sees 100% upside to fair value with limited downside given cheap valuations and strong fundamentals."

Executive Summary

Farrer Wealth's concentrated portfolio has underperformed significantly over three years since inception, declining 43% cumulatively versus a 19% benchmark gain. The manager attributes poor performance to investing in transformation stories during a volatile period that hasn't provided smooth recovery, plus missing the Mag 7 momentum rally. The portfolio consists of 12-20 positions focused on businesses growing market share in expanding markets, with top holdings including eDreams, Evolution, Sea Limited, and Alphabet. Six of the top seven positions are conducting buybacks, emphasizing portfolio cheapness. Key themes include e-commerce dominance in Southeast Asia through Sea Limited, travel subscription models via eDreams, and high-margin gambling businesses like Evolution. The manager calculates nearly 100% upside to fair value and believes downside is limited given attractive valuations, double-digit revenue growth, and active capital returns. Despite acknowledging timing mistakes, particularly around selling decisions, the manager maintains conviction in the long-term strategy and expects transformation stories to deliver significant returns as financial performance translates to stock appreciation.

Unlock Full Institutional Analysis

Sign in or create a free account to unlock full commentary, extracted equity pitches, and direct outbound manager source links with your 3 quarterly credits.

Sign In to Unlock (3 Free Credits)View Pricing Tiers

Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

78%

CautiousHigh

High Conviction (78%)

High conviction evidenced by concentrated portfolio with top seven positions representing 81% of holdings. Manager provides detailed analysis of each major holding with specific financial projections and upside calculations. Maintains positions despite significant underperformance and adds to existing holdings rather than diversifying.

Growth Outlook

38%

BearishBullish

Neutral (38%)

Manager acknowledges difficult market conditions and volatility over past three years that hasn't provided smooth recovery. Discusses how momentum behind index-heavy stocks creates challenging periods for active managers. However, shows some optimism about underlying business performance and expects conditions to improve.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Portfolio remains concentrated with 81% in top seven positions and manager added to existing position in Assaí during the quarter. However, made no new additions and exited State Bank of India, showing selective approach rather than aggressive deployment.

Capital Deployment

43%

De-riskingDeploying

Net Neutral (43%)

Made no new additions to portfolio this quarter, choosing to allocate spare cash to existing positions. Exited State Bank of India position, realizing gains. Net activity shows slight de-risking through position exit despite adding to one existing holding.

Forward Guidance

25%

CautiousExpansionary

Cautious (25%)

Manager expects big wins to materialize soon and sees significant upside potential. Plans to continue patient approach with existing holdings rather than chase momentum. Maintains conviction in long-term strategy despite recent underperformance.

Language Signal

45%

BearishBullish

Balanced (45%)

Language includes significant discussion of mistakes, underperformance, and challenging conditions. However, balanced with confidence in portfolio valuations, upside potential, and underlying business quality. Overall tone is honest about difficulties but maintains conviction.

Perceived Risk

65%

Low RiskElevated

Elevated Risk (65%)

Manager acknowledges significant risks including high valuations in Mag 7 stocks, momentum-driven markets that can make active managers look stupid, and volatility that prevents smooth recovery. Discusses specific risks around timing mistakes and the challenge of transformation stories in volatile markets.

Opportunity Density

35%

ScarceAbundant

Selective (35%)

Manager sees significant opportunities in existing holdings with 100% upside to fair value, but made no new additions this quarter. Suggests selective opportunity set where manager prefers to add to existing positions rather than find new ideas. Limited discussion of broader opportunity landscape.

Time Horizon

85%

Short-TermLong-Term

Decade+ (85%)

Explicitly states long-term investment approach with portfolio constructed with several years of runway in mind. References Peter Lynch quote about big winners taking 3-10 years to play out. Asks investors for five-year commitment and emphasizes decades-long return generation goal.