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Latest Letter
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LATEST LETTERS

Our primary communication with investors is the annual letter. However, we also use quarterly updates to introduce new holdings and discuss any other updates to the business of Capensis. Our latest letters can be read here.

SECOND QUARTER 2023

Most of our work analysing companies follows the process of considering whether a company is of sufficient quality to invest in. We cannot guarantee that we will avoid all mistakes, but if we do our job right we might go through periods where there is little change to your portfolio. This quarter is one such period. Our letter discusses why.

FIRST QUARTER 2023

This quarter marks the sixth birthday of Capensis Capital. Over the quarter we began adding listed property to the portfolio and provide a writeup of our rationale for investing in this unloved space. We also discuss our concerns about the risks posed by rapidly rising rates which led to selling out of First Republic Bank. 

ANNUAL LETTER 2022

In our sixth annual letter we discuss the timeless principles that provide comfort in times of uncertainty. While we are disappointed in the returns over the past year, we remain excited about the intrinsic potential of the portfolio. We discuss the main detractors from performance and the potential we continue to see in many of these companies.

THIRD QUARTER 2022

There is currently a stampede out of risky assets to cash as investors look for a safe place to hide out the chaos. We are taking a different view, selectively adding to equities, mostly in the UK and out of favour corners of the US, where share prices fail to reflect the long-term optimism we feel. We discuss the short term risks but potential long-term rewards. 

ARCHIVE OF LETTERS

We have made all our quarterly letters since inception available here to openly share our investment journey, the highs and lows, successes and failures, and what we have learnt along the way.

SECOND QUARTER 2022

We address some of the recent market volatility and how we make the right decisions in the midst of pounding storms.  We discuss the opportunities that have opened up to buy great companies at bargain prices, adding to our semiconductor exposure and Howden Joinery. We introduce our new addition, Adobe and explain our exit from Twitter.  

FIRST QUARTER 2022

This quarter marks the fifth birthday of Capensis Capital. Five years still places us firmly in the early years of our dream. We wrote in our introductory letter that “our aim for Capensis is to build our corporate home for the next 40 years or more. We love what we do, and we hope to continue doing it for decades to come”. In this letter we discuss how we are navigating turbulent waters. 

ANNUAL LETTER 2021

Closing out a pleasing year, we highlight key contributors to performance including the semiconductor businesses, First Republic Bank and Berkshire Hathaway. We also explain why we believe the main detractors (Wix, Twitter and AIA Group) are misunderstood opportunities with strong growth potential.

THIRD QUARTER 2021

In this letter we discuss Micron, one of a few investments where we are excited about the long-term opportunity in a market that is generally focused on the near-term direction of share prices. We provide an update on MEIP and introduce a new position in Wix (which we used to create this website).

SECOND QUARTER 2021

After a period of good performance, we discuss our approach to patient investing and taking a long-term view: batting averages rather than big swings. This includes a brief update on our trading in the quarter - no new positions but continuing to allocate to the best opportunities.

FIRST QUARTER 2021

Marking the fourth birthday of Capensis Capital we reflect on our journey thus far. We introduce a new position in Applied Materials, another semiconductor equipment manufacturer who will complement our current position in Lam Research.

ANNUAL LETTER 2020

In our fourth annual letter we discuss our investments in semiconductors, MEI Pharma and First Republic Bank. We also provide updates on changes made to your portfolios including new investments in British American Tobacco and CTT-Correios de Portugal.

THIRD QUARTER 2020

This quarter we discuss two new additions to our semiconductor holdings: the world's largest foundry Taiwan Semiconductor Manufacturing Company and one of the largest memory chip manufacturers Micron. We also introduce Twitter, an underappreciated platform opportunity.

SECOND QUARTER 2020

With portfolio performance back to where it started 2020, we discuss how its composition has changed to reflect a changed world. We reflect once again on the investment case for semiconductors into a rapidly digitising world and introduce AIA Group, a Hong Kong based life insurance company.

FIRST QUARTER 2020

After an extremely turbulent quarter brought on by the emergence of covid-19, we update investors on how we have taken advantage of the opportunity to buy "A Team" businesses at very attractive prices. We were unusually active in response to an unusual situation.

ANNUAL LETTER 2019

Our third annual letter discussed our top contributors to performance, Brookfield Asset Management, Lam Research and RIB Software, as well as the biggest detractors. We also introduce MEI Pharma, a pharmaceutical company focused on oncology research.

THIRD QUARTER 2019

We reiterate our approach of keeping cash to add resilience during market downturns and offer flexibility. We explain our decision to sell Teekay Offshore and provide an update on developments at Burford following a negative report on the company and political changes in Argentina.

CHANGES AT CAPENSIS

Tie-up with Granate - June 2019

The planned expansion of Capensis Capital came to fruition in June 2019, involving high-calibre people joining Capensis and Capensis joining forces with another highly regarded business. This letter explains the nature and impact of these changes.

SECOND QUARTER 2019

After a relatively quiet quarter, we discuss two possible corporate actions within our portfolio companies including a takeover bid for Teekay Offshore by Brookfield Asset Management and Exor's decision to walk away from a tie up of Fiat with Renault.

FIRST QUARTER 2019

In addition to some personal good news (a new addition to the family) we explain our exit from Genworth and introduce a new addition, Burford Capital, a specialty finance business with a strong track record and long runway.

ANNUAL LETTER 2018

Our second annual letter explains the lessons we have learnt over a year of underperformance: How we plan to optimise returns and tax implications, detractors from performance and the importance of maintaining a long term focus.

THIRD QUARTER 2018

In a difficult period for markets globally, we discuss three important aspects of our investment process. We also introduce Lam Research, a semiconductor equipment manufacturer who stands to benefit significantly from the data economy.

SECOND QUARTER 2018

We pay tribute to Sergio Marchionne, who was responsible for unlocking significant value for Exor through the successful turnaround of Fiat. We discuss the investment case for Hastings Group, a UK-listed general insurance company.

FIRST QUARTER 2018

This letter includes an introduction to two new holdings, Teekay Offshore which operates infrastructure assets for deep-water offshore oil production and First Republic Bank, a very impressive US bank and wealth management business.

ANNUAL LETTER 2017

In our first annual letter we reflect on performance and growth over the year and present a post mortem of the SNC deal. We introduce the investment holding company Exor, the insurance company Genworth Financial and RIB software.

THIRD QUARTER 2017

In this letter we discuss the planned sale of SNC to Markel Corporation and new investments in the US bank Capital One and L Brands, owner of brands including Victoria’s Secret and Bath & Body Works.

SECOND QUARTER 2017

In our second letter to investors we introduce some of our initial buys. These include the niche insurance company SNC, a kitchen manufacturer and retailer Howden Joinery, Brookfield Asset Management and Berkshire Hathaway.

First Letter

OUR FIRST LETTER

Introducing Capensis - April 2017

In our very first letter we introduce Capensis Capital to prospective investors. We discuss our investment philosophy, our dreams for the business, what we offer, the fees we charge and the benchmarks we will be measured by. This is the best place to start if you'd like to determine whether Capensis is a match for your needs.

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