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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Turtle Creek 2024 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Turtle Creek)

Primary Source Intelligence • Q1 2024 Letter Analysis

Turtle Creek Quarterly Analysis

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

Fund Returns

Digest Analysis

Quick Take

"Turtle Creek demonstrates exceptional risk management with losses on only 3 of 85 positions over 15 years while generating 17.9% annual returns."

Executive Summary

Turtle Creek Asset Management delivered a detailed attribution analysis demonstrating their low-risk investment approach over 15 years, generating 17.9% annual returns while losing money on only 3 of 85 positions. The fund added three new companies in Q1 2024 at greater than 50% discounts to Business Value, compared to only two additions in all of 2023. Their investment strategy focuses on controlling downside risk while identifying quality companies trading at significant discounts. Of 53 former holdings no longer in the portfolio, 43 were profitable, 7 broke even, and only 3 lost money with combined losses under 1% of total gains. The current portfolio of 32 holdings shows 30 positive contributors to date. Returns have been broadly distributed across holdings rather than concentrated in a few home runs. The fund maintains strict qualitative criteria, following 18 former holdings that still meet standards but trade above attractive valuations. Geographic allocation remains 67% US and 33% Canadian companies across their flagship fund.

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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

68%

CautiousHigh

Moderate (68%)

The manager demonstrates moderate-high conviction through concentrated holdings (32 positions), specific position sizing discussions, and detailed attribution analysis showing long-term commitment to holdings. The 15-year track record with named positions like TFI International, Premium Brands, and ATS Corp as largest holdings indicates strong conviction, though the diversified nature prevents a higher score.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses mild optimism about finding opportunities, evidenced by adding three new positions in the quarter at attractive valuations. However, the tone is measured and focused on selectivity rather than broad market enthusiasm.

Risk Appetite

30%

DefensiveAggressive

Defensive (30%)

The fund added three new positions during the quarter, showing willingness to deploy capital, but maintains a disciplined approach requiring significant discounts to Business Value. The 67% US / 33% Canadian allocation suggests moderate risk appetite.

Capital Deployment

35%

De-riskingDeploying

Net Neutral (35%)

The fund added three new positions during the quarter compared to only two in all of 2023, indicating moderate deployment activity. However, no cash level changes are disclosed, and the manager emphasizes selectivity and patience, suggesting measured rather than aggressive deployment.

Forward Guidance

15%

CautiousExpansionary

Cautious (15%)

The manager indicates they would be happy to own 18 former holdings again if they become cheap enough, but notes current holdings are more attractive. This suggests a patient, selective approach to future deployment rather than aggressive expansion.

Language Signal

20%

BearishBullish

Bearish (20%)

Language is predominantly focused on opportunity identification and value discovery, with terms like 'attractive,' 'discount to Business Value,' and 'profitable.' Risk language is present but framed constructively around their risk management success.

Perceived Risk

25%

Low RiskElevated

Low Risk (25%)

The manager acknowledges investment risk conceptually but frames their discussion around successful risk management rather than current market dangers. The detailed attribution analysis showing minimal losses suggests confidence in their risk control rather than concern about environmental risks.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

The manager found three new attractive opportunities in Q1 at 50%+ discounts to Business Value, suggesting a reasonably rich opportunity set. However, they note that 18 former holdings still meet qualitative criteria but aren't cheap enough, indicating selectivity is required.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The 15-year attribution analysis and discussion of owning companies 'throughout the full 15 years' demonstrates a long-term investment horizon. The manager's willingness to hold quality companies that temporarily don't meet valuation criteria indicates patience and multi-year thinking.