Spree Capital Advisers is a very young long biased investment firm that looks for undervalued companies with various catalysts. It was launched last year, and it runs a portfolio of 15 to 20 stocks. Recently, the fund released its Q1 Investor Letter – a copy of which you can download below.
Among other things in the letter, the fund reported returning 14.6% in January, 4.53% in February, and 1.96% in March, which amounted to a return of 22.16% year-to-date, beating the S&P 500, which posted gains of 13.65% for the same period.
“One of the driving forces behind the catalyst to launch Spree Capital Advisers was our observation of the reflexive pricebehavior resulting from the intersection of quantitative factor investing, momentum trend followers, and high frequency traders. When this combination of players conspire together, valuation dislocations create asymmetricopportunities for the long-term investor in great businesses.We capitalized on this dynamic in several instances early in the quarter.
Our Undiscovered Compounder strategy contributed17.65% to our 22.16% net return in the quarter. This strategy consists of great businesses led by proven, properly incentivizedmanagement teams whichhave clearly defined strategiesto maximizeshareholder value. These businesses are supported by secular tailwinds which provide long runways for the business to grow, and management teams with an ability and willingness to reinvest cash flows at high incremental returns on invested capital. In Q1, our Undiscovered Compounder watchlist had 45 businesses in the funnel, not including the investments we made in the quarter.”
You can download the copy of the letter below: