VVVNF - Palm Harbour Capital Q4 2024 Investor Letter

2025-03-10 07:30:00 ET

Summary

• The fourth quarter was characterized by political uncertainty in much of the world both before and after elections took place.
• Our blurb about Europe was just a delay in speaking about what really moved the market in the fourth quarter.
• We purchased shares in a French holding company, a Spanish copper miner and a Korean rice cooker manufacturer.
• The top contributor during the quarter was Ginebra San Miguel (+9.9%, +51 bps), the Filipino gin and spirits company which we introduced in our second quarter 2021 letter.
• The top detractor was Esprinet (-27.8%, -67 bps), the Italian electronics distributor, introduced in our fourth quarter 2019 letter.

Dear fellow investors,

During the fourth quarter the fund lost -0.88% gross of fees ¹ . We do not have a stated benchmark in our Key Investor Information Document (KIID) and therefore cannot comment on relative performance. We leave it up to you to decide. We note the above number appears higher than European and significantly lower than global benchmarks driven by US outperformance. Our last reported NAV at quarter-end was 16.91 (27/12/2024), -0.65% from the closest reported NAV at the third quarter end of 17.02 (26/09/2024). This brings our 2024 NAV return to +12.7% (28/12/2023 to 27/12/2024). Inception to quarter end NAV return was 69.1% or 9.6% compounded annual return. We are extremely optimistic about our portfolio’s prospects and believe we will reach our compound return aspiration over time. Our fund’s composition is unlike any index, and we are unlikely to perform in a similar manner.

The fourth quarter was characterized by political uncertainty in much of the world both before and after elections took place (2024 was a record calendar year with 74 national elections across the globe ² ) . We generally believe that politics are usually short-term noise and rarely make investment decisions based on it. The market often overreacts baking in extreme political outcomes whereas businesses usually just get on with it and politicians often bark more than they bite once elected. This of course is true most, but not all the time. Sometimes there are political shifts that need to be watched very carefully by investors. Especially when they lead to increased risk of inflation, war, expropriations, currency debasement or increased taxes. We worry about a broad re-pricing of the cost of risk. ...

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