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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"13D Activist Fund underperformed in Q1 2025 due to geopolitical volatility disrupting fundamentals and M&A activity. The fund added four new activist positions including Starboard campaigns at Kenvue and Qorvo focused on operational improvements."
The 13D Activist Fund returned -10.17% in Q1 2025, underperforming the Russell 2000's -9.48% return. Manager Ken Squire attributes short-term underperformance to market volatility driven by trade wars and geopolitics, which have hijacked fundamental analysis and put M&A activity on hold pending tariff decisions. The fund maintains its disciplined approach of holding activist positions through full cycles rather than trading on daily volatility. During the quarter, the fund added four new positions: Kenvue (Starboard Value campaign focused on marketing strategy), Middleby (Garden Investment targeting margin improvement and capital allocation), Qorvo (Starboard Value semiconductor margin improvement play), and Yeti (Engaged Capital pushing for growth acceleration and better communication). The fund exited four positions where activist catalysts were no longer compelling. Squire expects activist activity to remain robust, with 2025 already outpacing 2024's record pace. He believes markets will eventually rationalize once tariff uncertainty passes, enabling increased M&A activity and allowing activist catalysts to drive returns.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The manager demonstrates high conviction in the activist investment approach, maintaining disciplined positioning through volatility and adding new positions based on specific activist catalysts. Detailed analysis of each new position and clear articulation of value creation paths indicate strong conviction in the strategy.
Growth Outlook
The manager expresses concern about current market conditions being hijacked by trade wars and geopolitics, with M&A activity on hold. However, he maintains optimism that markets will eventually rationalize and resume rational behavior, showing a mixed but slightly negative near-term outlook.
Risk Appetite
The fund actively added four new positions during the quarter while exiting four others, showing selective deployment. The manager maintains a disciplined approach focused on activist catalysts rather than defensive positioning, indicating moderate risk appetite despite market volatility.
Capital Deployment
The fund added four new positions while exiting four others during the quarter, representing balanced activity with no net change in deployment pace. No specific cash level changes or aggressive deployment signals were mentioned, indicating neutral capital deployment.
Forward Guidance
The manager expresses confidence that tariff noise will eventually pass and markets will resume rational behavior with increased M&A activity. He expects activist catalysts to play out over time, showing cautious optimism about future positioning and outcomes.
Language Signal
Language is balanced with concerns about current volatility and geopolitical disruption offset by confidence in long-term activist value creation. The tone is measured and professional, with slight optimism about eventual market rationalization and M&A recovery.
Perceived Risk
The manager acknowledges significant risks from trade wars, geopolitics, and market volatility that have disrupted fundamental analysis and M&A activity. He notes the unusual nature of current market conditions where daily decision-making is highly volatile, indicating elevated perceived risk.
Opportunity Density
Despite market volatility, the manager found four attractive new activist situations to invest in during the quarter. He notes that activist activity is outpacing 2024's record levels, suggesting a rich opportunity set in activist investing despite broader market challenges.
Time Horizon
The manager explicitly states they hold positions for the full activist cycle and are not traders who react to short-term factors. The focus on activist catalysts playing out over time and waiting for markets to rationalize indicates a long-term, patient capital approach.
