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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Apis Deep Value Fund 2024 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Apis Deep Value Fund)

Primary Source Intelligence • Q2 2024 Letter Analysis

Apis Deep Value Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Apis Deep Value Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Digest Analysis

Quick Take

"With Asia-driven performance and strong contributions from electrification and defense themes. The manager leverages structural advantages in under-covered SMID-cap markets, highlighting extreme valuation disparities favoring small-caps."

Executive Summary

Apis Deep Value Fund delivered 3.1% net returns in Q2 2024, driven by strong performance in both longs and shorts with Asia leading geographic returns. The fund maintains 60% net long exposure across a concentrated portfolio of small and mid-cap global opportunities. Key contributors included electrification and defense themes, with HD Hyundai Electric adding 2.4% and DPC Dash representing a compelling China restaurant franchise opportunity. The manager emphasizes the structural advantages of SMID-cap investing, citing Goldman Sachs research showing thousands of stock-picking opportunities, significant analyst coverage gaps, and minimal institutional competition. Current valuation extremes favor small-caps with profitable Russell 2000 companies trading at 15x earnings with 35% growth versus S&P 500 at 23x with 14% growth. After 20 years of operation and 6% annualized outperformance, the firm sees no structural impediments to continued success, expecting small-cap headwinds to eventually shift to tailwinds while maintaining their focus on cash flow and valuation-driven investing.

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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

72%

CautiousHigh

High Conviction (72%)

High conviction evidenced by concentrated portfolio with detailed analysis of specific holdings like DPC Dash and E-Ink, including specific valuation metrics and growth projections. The manager provides clear investment theses with falsifiable catalysts and demonstrates willingness to size positions meaningfully, though some hedging language prevents maximum conviction scoring.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager presents a mildly positive outlook, highlighting structural advantages of small-cap investing and citing Goldman Sachs research supporting their thesis. However, they acknowledge current headwinds and market concentration risks, balancing optimism with realistic assessment of challenges.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

The fund maintains 60% net long exposure (99% long, 39% short), indicating a moderate risk-on positioning. The manager demonstrates selective risk appetite through concentrated positions but maintains significant short exposure as a hedge, suggesting cautious optimism rather than aggressive deployment.

Capital Deployment

5%

De-riskingDeploying

De-risking (5%)

The letter describes trimming alternative energy short positions expecting a rebound, suggesting modest capital rotation rather than significant net deployment. No explicit cash level changes mentioned, and the 60% net long positioning appears stable from prior periods.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

The manager expresses confidence in their ability to continue outperforming over the next 20 years and expects small-cap headwinds to shift to tailwinds. They indicate readiness to capitalize on opportunities while maintaining their disciplined approach to valuation-driven investing.

Language Signal

20%

BearishBullish

Bearish (20%)

Language is balanced with more opportunity-focused terms like 'attractive,' 'mispriced,' and 'undervalued' than risk language. The manager uses constructive framing around market inefficiencies and structural advantages while acknowledging some risks and challenges.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Moderate risk acknowledgment including mining sector volatility (Victoria Gold incident), meme stock resurgence impact, and large-cap concentration concerns. The manager discusses risks in context but doesn't express systemic alarm, treating them as manageable within their strategy framework.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

The manager emphasizes abundant opportunities in SMID-cap space, citing thousands of stock-picking opportunities versus concentrated large-cap indices, significant analyst coverage gaps, and multiple new positions highlighted. Goldman Sachs research supports the breadth of the opportunity set in their focused market segment.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The manager explicitly discusses 20-year track record and confidence in next 20 years of performance, indicating long-term orientation. Specific investments like E-Ink are described as 'long-term compounders' and DPC Dash growth plans extend to 2027, suggesting multi-year thesis horizons with patience for value realization.