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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Asian consumer franchises are decoupling fundamental earnings growth from pervasive multiple compression by pivoting toward capital-light, franchisee-led expansion models."
Arisaig Asia Consumer Fund declined 4.6% net of fees in September 2026, bringing third-quarter net performance to 1.3% and year-to-date net return to -12.9%. The fund's decline was primarily driven by valuation multiple compression rather than deteriorating underlying operating performance, as portfolio rolling twelve-month price-to-earnings contracted from 12.0x to 11.2x while aggregate FY26 earnings growth forecasts improved slightly from 18.4% to 18.8%. Cash balances closed the period at 6.6% of net asset value, with 81% of holdings by weight maintaining net cash balance sheets and portfolio-weighted return on capital employed reaching a robust 43.3%. The broader macroeconomic environment across Asia ex-tech remains gripped by an ongoing consumer bear market, marked by subdued consumer sentiment and deflationary pressures outside AI-driven markets such as Korea and Taiwan. Management's strategic framework concentrates on structural formalization tailwinds, market consolidation, and operational adaptation within branded consumer essentials, retail networks, and quick service dining. Portfolio businesses are increasingly implementing capital-light operational strategies, expanding franchised footprints, and lifting store-level unit productivity to insulate returns against broader cyclical demand headwinds. Key portfolio actions during the period included the initiation of a 1.0% toehold position in Eternal, the parent company of Indian quick commerce pioneer Blinkit, capitalizing on the rapid shift toward ten-minute doorstep grocery delivery. High-conviction holdings Jollibee Foods and Amorepacific demonstrated accelerating international transition toward high-ROIC, asset-light models, while premium tea operator Chagee exhibited positive domestic same-store sales recovery alongside aggressive share repurchases.
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