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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Horizon Investment 2024 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Horizon Investment)

Primary Source Intelligence • Q3 2024 Letter Analysis

Horizon Investment Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Horizon Investment. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+8.1%

Digest Analysis

Quick Take

"European banks trade at significant discounts to peers while benefiting from rising infrastructure spending. Commodity holdings rallied on supply constraints and geopolitical tensions."

Executive Summary

PM Capital's Global Companies Fund delivered strong quarterly performance of 8.1%, reinforcing their strategy of investing in high-quality, undervalued companies leveraged to attractive global themes. The fund's two largest themes by portfolio weighting are European banks and commodities. European banks, including AIB Group, Lloyds Banking Group, CaixaBank, and ING Groep, are significantly undervalued relative to US and Australian peers, trading at circa 8x earnings. They benefited from expectations of rising infrastructure and defense spending in Europe. In commodities, the fund's longstanding view that underinvestment in resource projects will constrain supply proved correct, with key gold and copper holdings rallying amid geopolitical tensions and US tariff policy fallout. The portfolio also benefited from gaming positions MGM China and Wynn Resorts. Key risks include ongoing tariff wars, geopolitical tensions, and inflationary pressures. The manager maintains conviction that the recovery in European banks and select commodity producers could take years to play out, requiring patience and discipline.

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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%)

The manager demonstrates high conviction through concentrated thematic positioning with European banks as the largest theme and specific named holdings with clear thesis explanations. Position sizing is discussed explicitly (net invested increased from 75% to 85%), and the manager maintains conviction despite short-term underperformance in commodities. The multi-year investment horizon and willingness to add during volatility indicate strong conviction, though the diversified nature across themes prevents a higher score.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about specific themes like European economic revival and commodity supply constraints, but acknowledges significant market uncertainties from tariff wars, geopolitical tensions, and Federal Reserve independence concerns. The outlook is constructive on selected opportunities rather than broadly bullish on markets.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

The fund increased net invested position from 75% to 85% during the quarter, taking advantage of April market weakness to add new positions. This shows selective risk-taking and opportunistic deployment, but the positioning remains measured rather than aggressive with active currency hedging in place.

Capital Deployment

50%

De-riskingDeploying

Net Neutral (50%)

Net invested position increased from 75% to 85% during the quarter, representing a 10 percentage point increase in equity exposure. The manager actively deployed capital during April market weakness, initiating several new positions including Spectris and Diageo while exiting Shell. This represents moderate deployment activity.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

The manager indicates continued focus on identifying opportunities from the Great Decoupling theme and maintains conviction in existing positions despite short-term underperformance. The approach is described as patient and disciplined, suggesting selective rather than aggressive future deployment.

Language Signal

20%

BearishBullish

Bearish (20%)

Language is balanced with equal emphasis on opportunities and risks. Positive terms include 'attractive valuations,' 'compelling opportunities,' and 'strong performance,' but these are balanced by risk discussions of tariff wars, geopolitical tensions, and market uncertainties. The tone is professional and measured.

Perceived Risk

65%

Low RiskElevated

Elevated Risk (65%)

The manager identifies multiple specific macro risks including Trump's tariff policies, geopolitical tensions from Iran-Israel conflict, concerns about Federal Reserve independence, and persistent inflationary pressures. These risks are discussed in detail with specific examples of their market impact, indicating moderate to high perceived risk in the environment.

Opportunity Density

70%

ScarceAbundant

Abundant (70%)

The manager sees attractive opportunities across multiple themes including European banks, commodities, and reshoring trends. The April market sell-off provided opportunities to add new positions at attractive valuations. The identification of specific undervalued sectors and the ability to deploy capital suggests a relatively rich opportunity set, though selectivity is emphasized.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The manager explicitly states that 'the recovery in European banks and select commodity producers could take years to play out fully, necessitating a patient, disciplined approach.' The recommended investment timeframe is seven years plus, and the strategy focuses on long-term themes like the Great Decoupling. This indicates a multi-year investment horizon with patience for thesis realization.