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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Laughing Water Capital delivered 39.8% net returns in Q2 2026 as three portfolio companies were acquired and the largest position doubled. The concentrated portfolio now holds significant cash following exits, with new position AnaptysBio offering 50-80% upside as GSK litigation approaches trial in July."
Laughing Water Capital returned 39.8% net in Q2 2026, bringing year-to-date returns to 33.6% and 10-year annualized returns to 20.0%. The exceptional quarter was driven by three portfolio company acquisitions (Theravance, Avanos, SECURE Waste) and the doubling of the largest position. The manager emphasizes that timing was largely coincidental, but the process of identifying mispriced opportunities in forgotten corners of the market remains sound. The portfolio is currently more concentrated than typical, with a double-digit cash position providing flexibility for future deployment. New position AnaptysBio represents a special situation with 50-80% upside potential over the next 4-6 weeks, as the company faces litigation with GSK over Jemperli royalties that could result in settlement or outright acquisition. Other key positions include Liquidia awaiting a favorable patent ruling, Nextnav awaiting FCC spectrum approval, and Lifecore evaluating strategic alternatives. The manager continues to focus on idiosyncratic healthcare and special situation investments largely removed from the real economy, with distinct catalysts on the horizon to surface value while ignoring macro headlines.
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