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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Tarkio Fund 2024 Q3 Investor Letter | Buyside Digest

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Primary Source Intelligence • Q3 2024 Letter Analysis

Tarkio Fund Quarterly Analysis

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

Fund Returns

Digest Analysis

Quick Take

"City Different's Multi-Cap Core strategy lagged the S&P 500 in Q3 due to weakness in emerging businesses and mid-caps, though remains ahead year-to-date. The firm sold Digital Ocean and concentrated capital in higher conviction ideas."

Executive Summary

City Different Investments' Multi-Cap Core strategy underperformed the S&P 500 in Q3 2025, returning 6.34% versus 8.12% for the benchmark. The 1.8% shortfall was primarily driven by stock selection among emerging businesses and mid-cap holdings. Emerging businesses declined 3% compared to a 15% gain for the benchmark's emerging group, reflecting weakness in speculative growth names the firm largely avoids. Mid-caps were the primary detractor, trailing benchmark peers by almost nine percentage points. Despite quarterly underperformance, the strategy remains slightly ahead year-to-date at 15.0% versus 14.8% for the S&P 500. The firm sold Digital Ocean during the quarter due to disappointing business fundamentals and used proceeds to increase positions in higher conviction ideas. The portfolio ended with 24 long-term investments. Manager Rob MacDonald emphasizes their disciplined, thrift-shopping approach to idea generation and deep fundamental research, maintaining focus on long-term value creation despite near-term performance headwinds.

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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

65%

CautiousHigh

Moderate (65%)

The manager demonstrates moderate conviction through concentrated positioning (24 holdings), selling underperforming positions to fund higher conviction ideas, and maintaining specific sector allocations. The detailed attribution analysis and willingness to make portfolio changes based on fundamental deterioration shows conviction in their process, though the diversified nature and hedged language around performance prevents a higher score.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager acknowledges the S&P had a strong quarter and notes that markets will go up and down over time. There's no explicit bearish or bullish market commentary, but the tone suggests acceptance of market volatility with a neutral to slightly positive long-term view.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

The portfolio sold one position and concentrated proceeds into higher conviction ideas, suggesting selective risk-taking. However, the overall positioning appears cautious with a focus on avoiding speculative growth names and maintaining balance across the business life cycle.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

The firm sold Digital Ocean and used proceeds to buy more of their higher conviction ideas, representing capital rotation rather than net deployment. No cash level changes are mentioned, and the activity appears to be reallocation within existing positions rather than new capital deployment.

Forward Guidance

10%

CautiousExpansionary

Cautious (10%)

The manager states they will continue working to improve longer-term performance numbers and maintains their long-term investing gaze. There's no indication of aggressive deployment or major strategy changes, suggesting a patient, steady approach.

Language Signal

20%

BearishBullish

Bearish (20%)

Language is balanced with mentions of both challenges (underperformance, disappointing results) and opportunities (ideal time to put new money to work). The tone is measured and professional without strong directional bias.

Perceived Risk

25%

Low RiskElevated

Low Risk (25%)

Risk discussion is minimal. The manager mentions their balanced approach helps them sleep better at night regardless of market conditions, suggesting awareness of volatility but no specific risk concerns are articulated. The focus on avoiding speculative growth names implies some risk awareness but without detailed discussion.

Opportunity Density

45%

ScarceAbundant

Selective (45%)

The manager describes their investment process as searching through thousands of stocks but notes that most ideas don't survive deep research. The metaphor of thrift shopping suggests opportunities exist but require significant effort to find. The sale of Digital Ocean and concentration into higher conviction ideas suggests selective opportunity identification.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The manager explicitly states their investing gaze remains on the long-term horizon and describes their 24 holdings as long-term investments. The thrift shopping metaphor emphasizes patience in the investment process, and they note that disappointing performance is often ideal for long-term strategy deployment. The multi-year attribution discussion reinforces their long-term perspective.