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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Desert Lion Capital delivered +8.3% net year-to-date through June 2026, outperforming the JSE All Share Index by 12.1%. Manager Van Niekerk maintains high conviction in SA small- and mid-cap equities, where capital outflows and market inefficiency have created a compelling valuation opportunity with double-digit growth companies trading at single-digit PEs."
Desert Lion Capital returned -2.9% net in June 2026 versus -4.9% for the JSE All Share Index, bringing year-to-date returns to +8.3% net versus -3.8% for the benchmark. Manager Rudi van Niekerk reaffirms the original 2019 investment thesis that SA small- and mid-cap equities represent an overlooked, capacity-constrained, and inefficient market opportunity. Capital outflows driven by perceived country-specific risk and market structure have been most pronounced outside the top 40 stocks, creating a valuation environment where double-digit growth companies trade at single-digit PEs. The scarcity of capital has eliminated most competing funds and analyst coverage, while retail investors have shifted to global tech and AI. Companies that survived the challenging environment have emerged with hardened balance sheets and efficient cash returns on capital. Van Niekerk maintains that the valuation opportunity is even more compelling today than at inception, expressing strong conviction that the fund is just getting started despite delivering +34% net in 2024 and +20% net in 2025. The majority of his personal wealth remains invested alongside limited partners in the concentrated 8-15 position portfolio.
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