L1 Capital, an investment management firm, released its “L1 Capital International Fund” (unhedged) second-quarter 2026 investor letter.
A copy of the letter can be downloaded here
The letter discusses the current investment environment as a ‘two-speed’ but resilient global economy, accompanied by an uncertain future. The letter explores the potential of an AI bubble, distinguishing between strong fundamentals and speculative momentum. Additionally, the market displays a ‘narrow’ character, marked by high exuberance and pronounced over-pessimism.
Against this backdrop, the Fund returned +2.6% (net of fees) during the June 2026 quarter, compared to the benchmark return of +12.5% (all in A$). The underperformance was driven more by which investments were not held in the Fund. The Fund remains focused on quality, valuation and the avoidance of permanent capital loss, and believes the portfolio is positioned to deliver attractive risk-adjusted returns for patient investors.