Quercus Fund 2025 Second Letter To Shareholders

2025-05-26 03:05:00 ET

Summary

• Despite recent market volatility, our portfolio remains resilient and is valued at nearly 4x current prices, emphasizing long-term fundamentals over short-term swings.
• Key holdings like First Pacific, Sanjiang Fine Chemicals, and Compagnie de l’Odet reported solid results, with positive income growth and strategic developments supporting intrinsic value.
• Halyk Bank stands out as our second largest position, offering exceptional ROEs above 20%, high dividends, and significant growth potential in Kazakhstan’s underpenetrated banking sector.
• We remain focused on resilient, undervalued businesses with strong cash flows, patient capital allocation, and the ability to withstand macroeconomic shocks for long-term compounding.

Dear partners,

In the First Letter of the year, written in February, I mentioned that in-depth discussions of the companies we are invested in would be more productive after their soon to be released full year results were reported....

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