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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Night Watch delivered 12.80% in Q2 by exploiting market bifurcation, buying quality compounders sold off for AI stocks while taking profits in cyclical memory positions. Marex surged 37% on volatility and M&A execution."
Night Watch Investment Management delivered 12.80% net returns in Q2 2026, bringing year-to-date performance to 15.85% and since-inception CAGR to 20.06%. The fund's largest position, Marex, appreciated 37% in the quarter and 230% since initial purchase, benefiting from market volatility and successful M&A execution in prime brokerage. The manager is exploiting severe market bifurcation where AI-related stocks trade at unsustainable levels while quality compounders with decade-long track records of 10-15% earnings growth are being sold off indiscriminately. Night Watch added positions in Stryker, Adyen, and Booking.com, moving up the quality spectrum while maintaining discipline around stock-based compensation. The fund took profits in memory stocks like Western Digital and Silicon Motion despite strong AI-driven performance, recognizing their cyclical nature. Core position Watches of Switzerland Group is executing well following tariff removal, with US growth reaccelerating to 24%. The portfolio remains concentrated in overlooked sectors with structural tailwinds including aerospace aftermarket, futures commission merchants, and payments, providing strong diversification from major indices while compounding capital at over 20% annually with minimal drawdowns.
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