L1 Capital’s International Fund returned 2.6% in Q2 2026, lagging its benchmark amid narrow market conditions and Microsoft’s execution concerns.
L1 Capital’s International Fund posted a 2.6% net return in Q2 2026, underperforming its benchmark’s 12.5% gain. The fund attributed the shortfall to its exclusion of high-momentum stocks rather than poor performance of its holdings, citing a ‘narrow’ market characterized by extreme sentiment swings.
The fund’s letter highlighted Microsoft (MSFT) as a key holding but emphasized the need for stronger execution to meet elevated expectations. Microsoft’s dominance in cloud, AI, and gaming remains intact, though valuation pressures persist in a two-speed global economy.
L1 Capital maintained its focus on quality and valuation, positioning the portfolio for long-term risk-adjusted returns despite near-term volatility.