Minotaur Capital launched its fund mid-month to much fanfare (ie. two fans in Thomas and Arms) amidst a volatile market backdrop. The fund was down 0.4%, which is a somewhat arbitrary datapoint given it covers three weeks of trading and our fund has longer-term views.

Our best performers were Japanese stocks and AI beneficiaries. Our detractors were generally more broad-based although our pharma and biotech names were concentrated down this end of the list. Shorting contributed positively to our performance displaying its power as a risk mitigant.

There is mounting interest in Japan amongst investors globally as the country shifts to a new equilibrium of sustained, moderate inflation and stronger nominal GDP growth. A more capital efficient and dynamic corporate sector with improved governance is emerging and should continue to uplift sustainable ROE and valuations.

AI, which sets our business apart as it’s the backbone of how we run it, perhaps unsurprisingly also drives the underlying performance of some of our stocks. AI is becoming pervasive full stop. It was mentioned in the vast majority of transcripts during US reporting season. Companies primarily cite AI as an efficiency gain rather than a revenue driver. Companies without obvious AI use cases often reference adding AI to internal data models to help improve decision-making or client analytics.

We are excited to be back in action doing the investing we love with proprietarily developed software to maximise our efficiency. We learnt a lot in the set up, putting together all the different layers of service providers (trustee, custodian, fund administration, order management system, prime brokers). More importantly, we keep iterating on the different ways to enhance our processes using software, including recording stock-specific ‘digital footprints’ (ask us for more detail if you want it).

And in keeping with the Minotaur imagery, we will leave you with a quote from an Ancient Greek philosopher. Plato in The Republic says “You know that the beginning is the most important part of any work… for that is the time at which the character is being formed…”