CA - Alluvial Capital Management Q1 2025 Letter To Partners

2025-04-23 07:50:00 ET

Summary

• Alluvial Fund gained 6.5% in Q1, outperforming benchmarks despite market volatility, driven by strong performances from London-listed holdings amid tariff concerns.
• UK companies Zegona Communications and McBride Plc significantly contributed, with Zegona's Vodafone Spain acquisition and McBride's strong earnings and undervalued shares.
• Cement industry holdings, including Titan Cement and Monarch Cement, delivered solid results, benefiting from pricing actions and underinvestment in production post-Financial Crisis.
• Real estate investments in out-of-favor sectors like office and mall properties continue to execute well, offering high cash flow yields despite rising interest rates.

Dear Partners,

Alluvial Fund enjoyed a strong start to the year, gaining 6.5%. This is particularly notable given the dismal backdrop, especially for small domestic stocks. The Russell 2000 Index ( RTY ) returned -9.5%, while the Russell Microcap Index fell -14.4%. All told, Alluvial Fund enjoyed one of the best quarters in our history versus relevant benchmarks. Our performance was driven by upward moves in our two core London-listed holdings, while stock indexes declined on worries about tariffs and declining business and consumer confidence....

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