By Soumya Eswaran
Publication Date: 2026-10-21 13:59:00
L1 Capital, an investment management firm, released its “L1 Capital International Fund” (unhedged) third-quarter 2026 investor letter. A copy of the letter can be downloaded here. This Quarterly Report covers the unusually complex investment environment, AI’s opportunities and challenges, portfolio strategy, September 2026 performance, and recent adjustments. The Fund returned +3.5% net of fees in the September 2026 quarter, outperforming its benchmark’s 1.5% gain, despite a stronger Australian dollar. Energy, Information Technology and Communication Services performed well, while Utilities, Industrials and Real Estate lagged. The portfolio held 22 investments, with the ten largest representing about 63% of assets. The strategy emphasizes diversification across different earnings drivers rather than concentration in a single sector or theme, including AI. Amid geopolitical instability, higher interest rates, and rapid technological change, the Fund assesses multiple scenarios while maintaining exposure to high-quality companies and managing valuation risk. It views AI as both an opportunity and a source of uncertainty, focusing ultimately on businesses with durable competitive advantages, earnings, and cash generation. Additionally, reviewing the Strategy’s top five holdings provides insight into its best positions for 2026.
In its Q3 2026 investor letter, L1 Capital International Fund highlighted NVIDIA Corporation (NASDAQ:NVDA) as a leading…
