Browse the world's most comprehensive database of hedge fund investor letters, sorted by recent quarter. Access primary source research from leading institutional managers.
| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Kernow Asset Management. This analysis is provided for institutional research purposes only and is not investment advice.
"Kernow returned 2.3% in August, using broad market volatility to expand its position in CMC Markets. The fund remains net long UK equities at 76% exposure, prioritizing asymmetric contrarian ideas while passing on names with distant cash flow catalysts like Jet2 or limited upside like Rightmove."
The Kernow Portfolio returned 2.3% in August 2024, outperforming market indexes amid significant global equity volatility. The fund maintains a contrarian, asymmetric investment approach focused on long and short UK equities across all market capitalizations. During the market panic triggered by a sharp decline in Japanese equities and a surge in the VIX index, Kernow capitalized on dislocation by increasing its holding in CMC Markets, whose core contracts-for-difference platform thrives on market turbulence. The manager evaluated 16 potential investment ideas during the month, passing on long candidates Jet2 due to lengthy capital deployment cycles for aircraft deliveries, and Rightmove due to capped valuation upside despite its demonstrated pricing power. Kernow expressed caution regarding prospective UK tax hikes in the upcoming October budget—specifically capital gains, inheritance, and corporation tax—which could pressure housebuilders and financial institutions. Portfolio positioning remains selective with 138% gross exposure and 76% net long exposure, supported by ongoing scenario planning to navigate potential fiscal regulatory shifts.
Sign in or create a free account to unlock full commentary, extracted equity pitches, and direct outbound manager source links with your 3 quarterly credits.
Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction is evidenced by a focused portfolio of 20 long and 17 short positions, with the top 5 long positions comprising over 42% of NAV. The manager articulates definitive buy and pass criteria.
Growth Outlook
The manager maintains a moderately constructive stance on UK market opportunities despite global market spikes and prospective local tax increases. Broad market panic in August created mispricings that the manager actively exploited.
Risk Appetite
Portfolio leverage stands at 138% gross exposure and 76% net long exposure. The team actively added to existing positions during the market sell-off, signaling a willing risk posture.
Capital Deployment
The manager actively deployed capital into CMC Markets during market volatility, while disciplined filtering led to rejecting 14 of 16 reviewed ideas.
Forward Guidance
Kernow outlines clear action plans for upcoming policy events, including specific short lists for AIM tax changes and buy lists for market dislocations.
Language Signal
Language features strong positive terms regarding fundamental quality alongside clear warnings about prospective fiscal policy tax headwinds.
Perceived Risk
Risk perception is driven by macro policy uncertainties, including potential UK capital gains and inheritance tax hikes that could hurt specific sectors.
Opportunity Density
The manager reviewed 16 new stock ideas during the month but found only two that passed their strict investment threshold, demonstrating a selective opportunity environment.
Time Horizon
Kernow focuses on multi-year thesis realization, passing on Jet2 because its capital expenditure catalyst horizon extends to 2035, which is considered too long.
