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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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McIntyre Partnerships 2024 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (McIntyre Partnerships)

Primary Source Intelligence • Q2 2024 Letter Analysis

McIntyre Partnerships Quarterly Analysis

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

Fund Returns

Annualized+9.9%

Digest Analysis

Quick Take

"Concentrated small-cap value fund underperformed in Q2 but maintains conviction in core holdings. Largest position SHC trades at 10x EBITDA versus peer at 15x, offering compelling value despite legal risks."

Executive Summary

McIntyre Partnerships declined 7% net in Q2 2024, underperforming the Russell 2000 Value by 600bps, bringing YTD underperformance to 500bps. The fund maintains a concentrated approach with top five positions representing 72% of assets at 99% long, 6% short exposure. Manager Chris McIntyre significantly reduced record label exposure after UMG reached 30x earnings, demonstrating disciplined valuation approach. The portfolio's largest holding, Sotera Health Company (SHC), represents the core thesis of buying quality businesses at deep discounts. Trading at 10x 2025 EBITDA versus peer STE at 15x, SHC offers compelling value despite legal overhang. Key catalysts include resolution of medical industry destocking and potential legal settlements. McIntyre expects SHC to compound at high teens IRR through 10% EBITDA growth and multiple expansion. The manager has identified several new potential top-five positions, suggesting active pipeline development. Risk factors include prolonged legal uncertainty and continued inventory normalization headwinds, though management signals indicate stabilization is occurring.

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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

82%

CautiousHigh

High Conviction (82%)

Very high conviction evidenced by concentrated portfolio with top five positions at 72% of assets. Manager provides detailed, specific analysis of largest holding SHC including precise valuation metrics (10x EBITDA vs peer at 15x) and clear catalyst timeline. Demonstrates strong conviction through willingness to maintain large position despite legal risks while showing discipline by exiting overvalued UMG position.

Growth Outlook

25%

BearishBullish

Bearish (25%)

Manager acknowledges recent sharp rally in small cap value stocks benefiting the portfolio and sees improving conditions with destocking headwinds fading. However, overall tone is measured with focus on specific company fundamentals rather than broad market optimism.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

Portfolio maintains high net long exposure at 93% with concentrated positioning in top holdings. Manager demonstrates selective risk-taking by maintaining large SHC position despite legal risks while trimming overvalued positions like UMG, showing disciplined but constructive approach.

Capital Deployment

15%

De-riskingDeploying

De-risking (15%)

Manager reduced record label exposure significantly and mentions identifying new potential top-five positions but no evidence of major cash deployment or position scaling. Portfolio composition largely unchanged since year start, suggesting measured rotation rather than aggressive deployment.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

Manager expresses confidence in SHC's prospects and mentions identifying several new potential top-five positions, indicating selective deployment bias. However, approach remains patient and value-driven rather than aggressively bullish on broad deployment.

Language Signal

20%

BearishBullish

Bearish (20%)

Language focuses on specific opportunities like SHC's attractive valuation and multiple expansion potential, with some positive framing around destocking resolution. Balanced by acknowledgment of legal risks and measured tone throughout the letter.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Manager acknowledges specific risks including legal uncertainty for SHC with litigation potentially lasting over 20 years and destocking headwinds in medical industry. However, risks are presented as manageable and addressable rather than systemic threats, with detailed analysis of worst-case scenarios.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Manager identifies several new potential investment ideas that could reach top-five position size, suggesting reasonable opportunity set. Focus on specific undervalued situations like SHC indicates selective but available opportunities in small-cap value space.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Manager demonstrates multi-year investment horizon, particularly with SHC position where legal resolution could take years and business fundamentals expected to compound over time. Expects high teens IRR through sustained EBITDA growth, indicating 3-5 year investment timeframe rather than near-term catalyst dependency.