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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Ennismore Global Smaller Companies 2023 Q2 Investor Letter | Buyside Digest

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Primary Source Intelligence • Q2 2023 Letter Analysis

Ennismore Global Smaller Companies Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Ennismore Global Smaller Companies. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+80%

YTD+2.4%

Annualized+3.6%

Positioning StanceConstructive

Market CapSMID Cap

GeographyGlobal

Digest Analysis

Quick Take

"Ennismore delivered modest Q2 returns amid extreme mega-cap divergence, resisting AI momentum while building Japan exposure and trimming winners. Detailed Melrose analysis showcases aerospace engine aftermarket opportunity with decades-long cash flows."

Executive Summary

Ennismore Global Equity Fund delivered 0.8% returns in Q2 2023, underperforming the MSCI World Index's 3.2% gain due to extreme market divergence favoring mega-cap stocks. The fund's long book contributed 2.1% while shorts cost 0.4% during the quarter. Key contributors included Deliveroo and successful short position in Swedish property company SBB, which collapsed due to excessive leverage. The manager resisted chasing the AI theme despite 739 mentions in Q2 company calls, preferring to stick with their 25-year proven process. Portfolio changes included trimming Buzzi and thyssenkrupp after strong performance and establishing a 5.5% Japan exposure featuring Nintendo and value opportunities like Okamoto Industries. The detailed Melrose Industries analysis highlights their aerospace focus, particularly GKN's engine business with long-term revenue sharing partnerships offering 40-year cash flow visibility. Management expects the current extreme market divergence to reverse while maintaining disciplined fundamental approach.

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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 detailed Melrose analysis with specific financial projections through 2027, concentrated Japan exposure with named positions and valuations, and maintained short conviction in Atlanticus despite recent underperformance. Portfolio of 59 long positions shows moderate concentration with clear thesis articulation.

Growth Outlook

25%

BearishBullish

Bearish (25%)

Manager acknowledges challenging market conditions with extreme divergence but expresses confidence that this will reverse before too long. Constructive but cautious tone with recognition of current headwinds.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Portfolio shows selective risk-taking with new Japan exposure and short additions, but also defensive trimming of winners. Net exposure decreased from 46.1% to 42.3%, indicating modest risk reduction.

Capital Deployment

43%

De-riskingDeploying

Net Neutral (43%)

Net exposure decreased from 46.1% to 42.3% indicating modest de-risking. Manager trimmed winning positions in Buzzi and thyssenkrupp while adding some new shorts, suggesting cautious capital management rather than aggressive deployment.

Forward Guidance

10%

CautiousExpansionary

Cautious (10%)

Manager is selectively adding shorts and monitoring opportunities but shows restraint on AI theme deployment. Cautious deployment bias with emphasis on patience and process discipline.

Language Signal

0%

BearishBullish

Bearish (0%)

Balanced language with equal weight given to challenges (narrow breadth, newsletter curse) and opportunities (Japan exposure, aerospace thesis). Neither overwhelmingly bullish nor bearish directional signals.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Manager acknowledges extreme market divergence as challenging and notes risks around AI theme repricing, but discussion is measured rather than alarmed. Standard risk awareness without systemic concerns.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Manager sees selective opportunities in Japan with seven new positions and describes short opportunity set as most attractive since last summer. Suggests decent opportunity availability in specific areas despite challenging broad market conditions.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

Aerospace investment thesis spans decades with 40-year engine lifecycles and revenue sharing partnerships. Manager emphasizes 25-year proven process and long-term approach, though some positions are more tactical. Multi-year outlook dominates.