Investor Letter 2025

Dear Investors,

We are told that 2025’s return of 42.7% for a fund that averages below 90% gross exposure and 50% net exposure is a decent accomplishment. We think we should have been up over 60%. Nevertheless, we have now compounded returns at c.20% per annum across the 5-and-three-quarter years since launch, something we are proud of. A remarkable 17-month streak of positive returns ended in December, and we have now been asked a number of times whether our returns are real. At first, we took deep offence at the question but upon reflection we take it as a compliment!

In 2025, we caught most of the major themes in the markets we follow and yet made many mistakes along the way. Ask any fund manager if they are happy with their returns and you shouldn’t find one who is. It should always be better. If you do find one, get rid of them.

As we come off last year’s exploits and into a brand-new year fresh with possibility, we wish to draw your attention to the one thing we spend an inordinate amount of time on.

Momentum.

And no, we don’t mean momentum in markets. We mean momentum in business and in life. We always try to make sure we in an optimal frame of mind as we are so desperately aware that momentum is something that once lost is very difficult to recover. And so, we direct our focus and attention to making sure we don’t lose it. We try to stay healthy, fit and positive and balanced. When times are bad, we don’t get too down and when times are good, we don’t get too carried away. We know that anything can be lurking just around the next corner. And so, we are EXTREMELY aware that we have had an exceptional run of good performance. We believe we have a process that is repeatable across our large universe of assets and markets, but we also know that we DO NOT want to lose momentum.

Case in point, something we used to care much more about than we do today, but something instructive for the purposes of this letter. Liverpool Football Club won the English Premier League last season by a country mile. They were supreme and didn’t put a foot wrong. The result was the outcome of lots of excellent planning and management and coming into the new season thereafter lots of money was spent on transfers and some upgrades were made to the squad. Expectations were high and the season started off well with 5 wins out of 5. But from then on, the wheels came off. A record losing streak ensued and the team has struggled to regain the momentum of last season with pitiful performances coming one after the other. The question is what went wrong? Everyone has their opinion but ours is that they messed with a winning formula and they didn’t plan for what could go wrong. They became overconfident and attempted to make wholesale changes to something that required maybe a few small tweaks.

Our point with this story is that we are not making any changes at all. If anything, we want to make as few changes as possible. We are often asked why we don’t hire more people, why don’t we get a fancy office etc. The answer is because we are enjoying ourselves and it shows in our numbers. We promise you, our investors, that we won’t change anything. We certainly won’t chase AUM. We have grown organically since we launched this product, avoiding like the plague any fundraising that takes us away from our desks (and our families) for long periods of time. We will continue to grow organically. As we said on a recent new investor call, we would rather have $50m under management and change nothing than make big changes to our day-to-day in order to get $500m.

Looking ahead to 2026 and what it holds for us all, our answer is that we don’t know. We never do. There isn’t much point waxing lyrical on geopolitics and making outlandish predictions. Of course, we have opinions, and we write about them every week in our newsletters which we have written pretty much every week since 2018. What we find in markets and in life is that the path usually reveals itself once we are well on our way. We trust that it will always do so, as long as we trust ourselves and our instincts. Our favourite quote from Sufi mystic and poet, Rumi, is the background for this. We refer to it often as it really is simply just true for us.

“As you start to walk on the way, the way appears”

We embrace right brained thinking, and we believe it will continue to work for us, whatever gets thrown in our path.

Our product isn’t predictions. It’s returns.

We wish to deeply thank all our investors for your trust in us. We know that returns drive much of this trust and we have no intention of losing either (your trust or the returns). There is a saying in sport that form is temporary and class is permanent, but we are well-aware in this industry form needs to be permanent. A timely reminder that our capital sits right alongside yours as we endeavour to look after it responsibly for many more years to come.

Kind regards,

David and Eugene