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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Mayar Capital 2023 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Mayar Capital)

Primary Source Intelligence • Q3 2023 Letter Analysis

Mayar Capital Quarterly Analysis

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

Fund Returns

QTD-5.26%

YTD+4.05%

Annualized+8.31%

Positioning StanceConstructive

GeographyGlobal

Digest Analysis

Quick Take

"Mayar Capital endured another challenging quarter but maintains conviction in value investing approach. Manager sees current tech bubble similar to late 1990s and believes higher rates will favor quality businesses over mediocre ones."

Executive Summary

Mayar Capital's Q3 2023 letter reflects on a challenging 24-month period of underperformance while maintaining conviction in their value investing approach. The fund declined 5.26% in Q3 versus the MSCI World's 4.31% decline, with since-inception returns of 8.31% annualized. Manager Abdulaziz Alnaim draws parallels between current market conditions and the late 1990s technology bubble, noting that a handful of big technology companies have reached levels disconnected from fundamentals while average stocks declined. The fund initiated positions in Capgemini and Kenvue while adding to existing holdings in Helical, Brenntag, and UPS. Alnaim believes higher interest rates will favor quality businesses with high returns on capital over mediocre companies that borrowed extensively during the zero-rate environment. He expects distress among overleveraged companies as refinancing occurs at higher rates. The manager views the current portfolio as one of the most attractive ever owned and believes patience will be rewarded as their value approach benefits from the new rate environment.

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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%)

Manager demonstrates high conviction through concentrated portfolio of named positions, specific investment theses for new holdings, and explicit statements about portfolio attractiveness. Maintains conviction despite 24 months of underperformance, with clear reasoning for each position and strong belief in value approach.

Growth Outlook

38%

BearishBullish

Neutral (38%)

Manager expresses cautious optimism about future while acknowledging current challenging conditions. Compares current environment to late 1990s tech bubble and warns of potential bursting, but believes higher rates will create favorable conditions for quality businesses going forward.

Risk Appetite

25%

DefensiveAggressive

Defensive (25%)

Portfolio remains fully invested with new positions initiated and existing holdings added to during the quarter. Manager maintains conviction in holdings despite recent underperformance, suggesting moderate risk appetite with selective deployment.

Capital Deployment

30%

De-riskingDeploying

De-risking (30%)

Fund initiated two new positions (Capgemini and Kenvue) and added to three existing holdings while trimming two others. Cash decreased from 5% to 4%, indicating modest net deployment activity during the quarter.

Forward Guidance

50%

CautiousExpansionary

Neutral (50%)

Manager explicitly states belief that next few years will be great for their types of businesses and expects patience to be rewarded. Confident that higher rate environment will favor their quality-focused approach over time.

Language Signal

0%

BearishBullish

Bearish (0%)

Language is balanced between acknowledging risks (tech bubble, underperformance pain) and expressing optimism (attractive portfolio, patience will be rewarded). Risk warnings about current market conditions offset by positive outlook for strategy.

Perceived Risk

65%

Low RiskElevated

Elevated Risk (65%)

Manager identifies significant risks including tech bubble conditions similar to late 1990s, potential distress from higher rates, and acknowledges 24 months of disappointing performance. Discusses risk management as crucial part of investment process and notes unpredictable future events impact returns.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

Manager sees attractive opportunities in current environment, initiating new positions and adding to existing ones. Believes current portfolio is one of most attractive ever owned and expects higher rates to create more opportunities in quality businesses going forward.

Time Horizon

80%

Short-TermLong-Term

Decade+ (80%)

Fund explicitly defines long-term as minimum five years, emphasizes patience and discipline as core to strategy, and discusses willingness to endure short-term underperformance for long-term gains. Manager references permanent capital mindset and multi-year investment horizons throughout letter.