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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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L1 Capital International Fund 2024 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (L1 Capital International Fund)

Primary Source Intelligence • Q1 2024 Letter Analysis

L1 Capital International Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, L1 Capital International Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+12.2%

Digest Analysis

Quick Take

"L1 Capital International delivered solid Q1 performance while navigating mixed economic conditions. The fund maintains quality focus with strategic portfolio adjustments including selling Graphic Packaging and adding to ICE and UnitedHealth on weakness."

Executive Summary

L1 Capital International delivered 14.0% net returns in Q1 2024, slightly outperforming their benchmark by 0.1%. The fund maintains focus on quality companies with sustainable leadership positions, pricing power, and financial strength. Economic conditions remain generally favorable with U.S. growth exceeding expectations, though inflation stays above central bank targets and interest rates are likely to remain higher for longer. Business conditions are mixed, with pressure on lower-income consumers while affluent segments benefit from strong asset prices. The manager made significant portfolio adjustments including selling Graphic Packaging due to industry headwinds and adding to Intercontinental Exchange and UnitedHealth Group on weakness. Key contributors included Amazon, Microsoft, CRH, Eagle Materials, HCA Healthcare, and Mastercard across diverse sectors. The fund celebrates its 5-year anniversary having delivered 15.5% annualized returns, exceeding the benchmark by 1.6% annually. With markets reaching record highs, the manager emphasizes valuation discipline while finding selective opportunities in consumer-facing businesses where near-term performance is subdued.

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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%)

High conviction evidenced by concentrated portfolio of 20-40 positions with detailed thesis explanations for major holdings. Manager provides specific rationale for major moves like selling GPK entirely and adding to UNH and ICE, with clear position sizing language and long-term commitment.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager describes economic conditions as generally favorable with U.S. growth exceeding expectations, but acknowledges mixed conditions and inflation concerns. Language is constructive but balanced with risk awareness.

Risk Appetite

10%

DefensiveAggressive

Defensive (10%)

Portfolio positioning appears cautious with selective additions and disciplined trimming at fair value. The manager is finding opportunities but emphasizes selectivity and valuation discipline rather than aggressive deployment.

Capital Deployment

48%

De-riskingDeploying

Net Neutral (48%)

Net neutral deployment with rotation activity. The manager sold entire GPK position and used proceeds to add to existing positions like ICE, UNH, and AMZN, plus some new smaller positions. This represents capital rotation rather than net deployment or de-risking.

Forward Guidance

0%

CautiousExpansionary

Cautious (0%)

The manager takes a measured approach to future deployment, emphasizing company selection and valuation discipline. No clear directional bias toward aggressive deployment or defensive positioning.

Language Signal

15%

BearishBullish

Bearish (15%)

Language is balanced with both opportunity and risk language. Terms like 'favorable,' 'opportunities,' and 'excited' are offset by 'mixed conditions,' 'pressure,' and 'challenging' throughout the letter.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Moderate risk acknowledgment with specific concerns about inflation expectations, long-term interest rates, mixed business conditions, and geopolitical tensions. Risks are discussed but not central to the investment thesis.

Opportunity Density

50%

ScarceAbundant

Selective (50%)

Manager sees selective opportunities, particularly in consumer-facing businesses where performance is subdued, but emphasizes that finding investments offering both Quality and Value is challenging. Opportunity set is characterized as requiring selectivity.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

Multi-year investment horizon evidenced by statements about ICE change being 'measured over years, not quarters' and positioning for 'longer-term investment horizon.' Fund structure and 5-year track record discussion reinforces patient capital approach.