The portfolio’s return in Q1 2026 was -0.78%, which outperformed an all-equity benchmark like the Vanguard FTSE All-World, which had a return of -2.7%.

The long-term objective is to compound capital at approximately 7–8% annualized over a full cycle, while limiting drawdowns to a level that allows disciplined decision-making during periods of stress.

Top contributors / detractors during the month:

• Contributors: Johnson & Johnson, Gold, Deutsche Boerse, Colgate

• Detractors: Global Equities (Vanguard FTSE All-World), Christian Dior SE, Unilever, VISA

Asset Allocation

The portfolio ended the quarter with the following allocation:

• Equities: 68%

• Diversifying Strategies: 28%

• Cash: 3%

Commentary

Overall, I’m quite pleased with the portfolio’s performance. It’s been consistent with my expectations during volatile times. In Q1 interest rates, equities, commodities, and currencies, experienced volatility.

Macro Environment & Winners
A significant portion of the portfolio is invested in USD-denominated equities. The EUR/USD exchange rate fluctuated from a high of 1.20 in February to a low of 1.14 in March. Despite broader market volatility, Gold (priced in EUR) positively contributed to the performance. Within equities, Johnson & Johnson provided stability in the less cyclical healthcare sector, while Colgate served as a reliable staples play. Deutsche Boerse also made a positive impact as the company benefits from heightened market volatility and higher interest rates through its settlement business.

Detractors & Strategic Pivots
One of the major detractors were clearly global equities broadly. Christian Dior showed additional weakness, and I do not anticipate a quick turnaround in the global outlook for luxury stocks. I expect further economic weakness and potential inflation coming from the geopolitical situation in Iran.

Unilever and Visa were also significant detractors. Following the spin-off of its Magnum division in March, Unilever announced its intention to combine its food business with McCormick, while notably retaining its food business in the growing Indian market. Unilever is effectively pivoting toward a pure-play home and personal care business, focusing on higher-growth beauty and wellness markets. Long-term, this strategic shift should enhance focus on core units and potentially re-rate the stock from a forward P/E in the teens to the low twenties.

Visa continued to decline in March amid concerns over slowing consumer spending, the adoption of domestic payment solutions (WERO, Pix), and the future impact of stablecoins. Renowned investor Stanley Druckenmiller recently said in an interview:

“I assume our whole payment systems will be stablecoins in 10 or 15 years, as they are more efficient, faster, and cheaper than existing solutions.”

Despite this, Visa is proactively addressing these shifts, notably by integrating stablecoin settlements. I believe Visa will continue to evolve and embrace technological advancements while maintaining its status as a foundational railway for global spending. I addressed a few issues regarding Visa in the February Update:

Uncorrelated Strategies
The uncorrelated strategies basket performed well, adding 0.8 percentage points to the overall portfolio performance. Major contributors included Gold, BH Macro, and the catastrophe bond fund (insurance risk). Looking ahead, I expect BH Macro to benefit from ongoing volatility. The cat bond fund may provide a more mixed picture, balancing potentially lower short-term rates with a reduced risk premium. I also expect the two quant funds (GAIA and AQR) to positively contribute finally as the year progresses.

Buys & Sells

• Visa: Increased the position in February and I will likely add further on weakness.

• Blue Balance Global Opportunities Fund: Exited as it was only a minor 1% position. I will reallocate these funds to either AQR or BH Macro to increase portfolio concentration.

• Twelve Capital Cat Bond Fund: Trimmed the position to bring the insurance risk allocation back below the 10% threshold. I still believe this asset class offers attractive risk-adjusted returns, and these funds will be redeployed into better opportunities in the coming weeks.

Thank you for reading along, I am looking forward to the next update.

This publication is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. Past performance is not indicative of future results.

I am currently on holiday with the whole family enjoying some nice sunny weather in Spain while I read headlines that airlines in Europe fear a lack of kerosene in a few weeks already if the supply chain does not return quickly to the pre-war standard. The events over Iran are changing by the minute.
For me personally I have three points that I believe are currently running a bit under the surface:

• the number of ships crossing is likely greater than what journalists and analysts are estimating by using AIS data

• if the issue over the strait does not resolve itself within the next 3-4 weeks I believe we will face shortages in a lot of supply chains from kerosene over plastics, lubricants, and many other goods

• we are used to a world where the scarcity of goods usually ends up in inflation. We are not used to a world where we cannot physically access any goods because they are simply not being produced. This is something different and it is a situation that cannot be solved by throwing money at it. Neither by the consumer nor by the government with interest rates, quantitative easing or stimulus checks.

Worth Noting

If there is anything worth reading it is the quarterly letter of Graham Rhodes founder of Longriver Investment Partners based out of Hong Kong.

The Q1 letter is about Hong Kong’s ongoing economic transformation which is influenced by more integration with Chinese capital markets and demographic shifts. Graham evaluates the potential of Futu, highlighting effects of a global expansion and the transformation from a simple brokerage into a financial platform.

Thank you for reading along.

The situation in the ME keeps markets quite busy. While overall indices are down barely 10% I see much greater declines in single names or at least the ones I am watching closely. I will get into more details in the portfolio update that I will publish at the beginning of April. I think of companies like Visa, Mastercard, Thermo Fisher, Danaher, Microsoft, Booking, S&P Global, Berkshire Hathaway, Intuit, Chipotle, Uber and many more.

These are no value picks trading at a P/B of 0.5 but certainly these businesses are of (at least previously perceived) very high quality. Still, they are trading at the lowest valuations in years. I read an article on X this week about Guy Spier closing down his fund due to health reasons, and I believe somebody commented something in the sense of: stock picking is dead.

I do not think it is dead. Even with all the information that is available to individuals, institutional investors, algorithms, markets are always the result of human psychology and emotions. I think running a portfolio of 15 or 30 stocks and trying to outperform the market with large caps is dead, and it always was. Is it possible with only 5 or 6 individual stocks? Absolutely.

This is not the way I invest here at The Tiny Family Office, as I have a different mandate and investment goal, but sometimes I feel the urge to sell it all, just buy 5 great businesses, and never look back. As Charlie Munger used to say: putting all eggs in one basket and watch it carefully.

Worth Noting

Nordea published another interesting piece with the title “Macro & Markets: Will higher energy prices alone justify hiking rates?”

Europe and Asia are perceived to be more vulnerable to prolonged energy prices than the U.S.. Slowing economic activity across one region will also affect other regions with spill-over effects. So yes, the U.S. economy is shielded but not immune. The big question is if central banks will have to hike interest rates. According to the chart above taken from Nordea’s research this would not be the case for Europe at the moment. Especially because economic activity is already slowing down globally across PMIs, consumer confidence and with higher inflation expectations. Lower asset prices also have an effect on that.
Nordea writes:

“While we are on the verge of moving our baseline ECB hikes from 2027 clearly forward, we have not done so yet. We still tend to think it would be easier for the ECB to wait at least until the June meeting for better visibility on the how the situation in the Middle East evolves, how the economy reacts to the higher prices, what is the response from fiscal policy and, most importantly, how higher energy prices feed through to other prices and inflation expectations. Further, a full set of staff forecasts would be available at the June meeting.”

As you know I am not a big fan of acting on macro research, and I think predicting short-term movements of economies, interest rates or currencies does not really matter if you invest for the long-run. I can spoiler a tiny fraction of the portfolio update for March already: I barely did anything.

I am certain we have another interesting week ahead of us.

Thank you for reading along.

On my mind this week are, unsurprisingly, the ongoing events in Iran and the Middle East. Analysts, asset managers, politicians try to make predictions about oil prices, shipping traffic, durable damages to physical assets, potential outcomes of the conflict and many other events influencing markets.

During times like these I try to stay away from too much noise. More often than not, we fool ourselves into thinking we know exactly how things will play out, when the reality is that there are simply too many variables to model accurately.

The magnitude of this crisis, exceeds those in the past. In the 1990 Gulf War only about 5% of global oil supply was removed from the market temporarily. The current complete shutdown of the Strait of Hormuz is the issue here trapping roughly 20% of daily global oil supply and 20% of LNG supply. The solution of free markets to higher prices is usually demand destruction. A crisis like this will be solved at least partially “naturally” at some point.

There is one thing I am certain of, however, no matter how this crisis will play out: Governments will further accelerate strategic on-shoring of critical industries and energy infrastructure. This crisis once again shows how vulnerable a globalized world has become to regional shocks.

Worth Noting

Warren Buffet in 2017 said about Bill Ruane, co-founder of the Sequoia fund: "A truly wonderful human being and a man whom I identified 60 years ago as almost certain to deliver superior investment returns over the long haul".

Since its inception in the 1970s, Sequoia has famously outperformed the S&P 500 by running a concentrated, long-only equity strategy.

Sequoia Fund Top 10 Holdings

(As of their latest reporting, representing over 60% of the total portfolio)

1. Rolls-Royce Holdings PLC (Industrials) - 12.4%

2. Alphabet Inc. Class A (Communication Services) - 8.2%

3. Liberty Media Corp - Formula One (Communication Services) - 7.1%

4. Universal Music Group NV (Communication Services) - 6.0%

5. Eurofins Scientific SE (Healthcare) - 5.6%

6. Capital One Financial Corp (Financial Services) - 5.3%

7. Constellation Software Inc. (Technology) - 5.3%

8. Elevance Health Inc. (Healthcare) - 4.9%

9. Charles Schwab Corp (Financial Services) - 4.4%

10. Intercontinental Exchange Inc. (Financial Services) - 4.3%

I am quite surprised, but they announced their decision to transfer the mutual fund into an actively managed ETF strategy. The new Sequoia ETF (NYSE: SEQ) is expected to become available late 2026. This ETF could potentially become an interesting addition to The Tiny Family Office portfolio, and I will be watching it very closely.

I wish us all a safe week.

Thank you for reading along.

I decided to have a look at Merrill Lynch’s Capital Market Outlook again this week, and stumbled across the following:

After reading the first few lines on biotechnology and life sciences Thermo Fisher Scientific and Danaher came to my mind. Both companies have great portfolios in the life sciences and diagnostics spaces.

Interestingly enough, the market is not pricing in huge future tailwinds into the share prices at the moment. Both companies trade at the lower end of their EV/EBITDA valuation ranges.

Francois Rochon of Giverny Capital published his Annual Letter 2025. It is worth reading, some great analogies can be found between railway investments and the current AI capex. The best part perhaps is usually the podium of errors:

Gold Medal: Canadian National Railway

In my brief (!) historical text about railways in this letter, you may have noticed that CN was privatized by the Canadian government in 1995. Its shares were then listed on the Toronto stock exchange. We could therefore have invested in it at that time. In Peter Lynch’s book “Beating the Street,” published in 1992, there was this rule: “Whatever the Queen is selling, buy it!” But unfortunately, I ignored Peter’s rule and passed on it. The following figures will send chills down your spine: the share price has risen from $1.75 in December 1995 (adjusted for stock splits) to $136 in December 2025. With the dividends received over the years, we’re talking about an approximate annual return of 17% over 30 years. Would you believe me if I told you that this is a better return than Microsoft’s for the same period?

You can find it here.

Thank you for reading along.

The portfolio returned 3.71% in February 2026. YTD the portfolio is up 4.40% outperforming even an all-equity benchmark like the Vanguard FTSE All-World.

The long-term objective is to compound capital at approximately 7–8% annualized over a full cycle, while limiting drawdowns to a level that allows disciplined decision-making during periods of stress.

Top contributors / detractors during the month:

• Contributors: Nestlé, Global Equities (Vanguard FTSE All-World), Berkshire Hathaway

• Detractors: Visa, Magnum Ice Cream Co, RIT Capital Partners

Asset Allocation

Commentary

The portfolio ended the month with an allocation of 68% equities and 32% diversifying strategies.

I could make it short here and just say that January’s top detractors became February’s top contributors. The portfolio performed very well across all segments with only 4 positions being down during February. The substantial exposure to the consumer staples sector (>12%), and the 7% allocation to Gold provided the intended diversification against global equity indices. Especially as technology-related sectors were impacted by fears of disruption through AI. The chart below shows the portfolio compared to an all-equity benchmark.

While I am happy about the performance in February, I am well aware that the high exposure to the staples sector will become a drag once technology-related sectors recover or initiate a new bull market.

JNJ Update
Johnson & Johnson published its 2025 Annual Report this month, with a few positive pipeline news. The company announced a $1 billion investment to expand its cell therapy manufacturing footprint in Pennsylvania, aiming to scale its oncology portfolio. JNJ secured a notable FDA approval for Rybrevant Faspro and published landmark clinical data for its multiple myeloma treatments. The company is trying to move further into complex biologics with these developments. And as exciting as this might be, I also think about the company’s intention to separate the orthopedics business within the next 2 years. I really liked JNJ exactly for this boring part of the whole product portfolio. Interestingly, recent reports from mid-February suggest JNJ might be pivoting from a spin-off to an outright $20 billion sale of this unit to private equity. I will monitor the situation closely.

Portfolio Changes & Visa Deep Dive

I doubled the position in Visa this month. Visa is currently trading at metrics that remind me of previous lows. A P/E at 29, the EV/EBITDA at 21 and the FCF yield is at almost 4%. Markets are pricing in a mixture of headwinds and future disruption fears for the company. This includes lower credit card issuance in the US due to tightening consumer credit, a rise of stablecoins as alternative payment means or cheap domestic payment solutions like WERO in the EU (influenced by successful examples like PIX in Brazil).

A few thoughts on this topic:

Domestic payment systems such as PIX (Brazil) and WERO (European Union) will likely only replace very low-margin, day-to-day transactions for V and MA. Think of your daily groceries (if at all) or the sandwich at the small deli next to you. Since its launch 2020 PIX has surpassed the combined number of credit and debit transactions in Brazil with a very high adoption rate of roughly 80% of the adult population. PIX or WERO is not about the hotel or flight you are booking or the shopping you’re doing on your holiday abroad. These are the high margin transactions for credit card companies. Coming from abroad you also cannot use these systems anyway. From the consumer perspective these systems are debit systems, there is no cashback, no fraud protection, no bonus points, no miles, no lounge access, no insurance benefits. The incentive to use them is 0, even if the merchant gives you a discount of 0,5 or 1% you may still want to collect those points.

The widespread use of instant payment systems such as PIX, WERO or others will or can hurt Visa and Mastercard, but these transactions are not the main driver of revenues for them.

To mitigate risks arising from stable coins, Visa has integrated USDC on the blockchain directly into operations. With a USDC settlement, banks benefit from faster funds movement over blockchains, seven‑day availability and enhanced operational resilience across weekends and holidays without any change to the consumer card experience. Banks are ready to use it and Visa is simply adapting.

“Visa is expanding stablecoin settlement because our banking partners are not only asking about it - they’re preparing to use it,” said Rubail Birwadker, Global Head of Growth Products and Strategic Partnerships, Visa. “Financial institutions are looking for faster, programmable settlement options that integrate seamlessly with their existing treasury operations. By bringing USDC settlement to the U.S., Visa is delivering a reliable, bank‑ready capability that improves treasury efficiency while maintaining the security, compliance and resiliency standards our network requires.”

Source: Visa

Visa is actively adopting and open to new technologies.

This is what Jack Forestell, VISA Chief Product and Strategy Officer recently said at the Wolfe Fintech Forum:

...I'd say I've been doing this payment technology thing for a really long time, 20+ years, and I will honestly tell you, I have not stared into a bigger growth opportunity than what we have ahead of us in the development of the agentic web. See, agentic web broadly that then will turn into agentic commerce, turn into agentic payments. I haven't seen anything like this since the dawn of e-commerce itself in the late 1990s, early 2000s."

Over time we will see if either Visa (and me) are wrong or the market.

In the Diversifying Strategies segment, my investment in the Schroder GAIA Oaktree Credit Fund was converted into the Oaktree Global Credit Selection Fund (1.8% weight). The new fund has a similar risk profile to the one previously distributed by Schroder. GAIA Oaktree was a multi strategy credit fund, specializing in allocating capital across various segments of the credit spectrum, including high-yield bonds, structured credit (such as real estate debt), convertibles, and emerging market debt. The other credit fund in the portfolio is the MAN GLG Global Investment Grade Bond Fund. Is has a similar risk and return profile like the old GAIA fund and the new Oaktree product. All of these credit funds are correlated to high yield corporate bonds as visible below, although they have higher returns (and higher volatility).

Instead of keeping two separate positions I may consolidate the credit risk in the portfolio into only one of the funds for simplification purposes.

Another position I may change is the BlueBalance Global Opportunities Fund, which is a boutique macro hedge fund from Austria. The position is only 1% of the portfolio and therefore too small to really have an impact, so I am considering to sell it and buy some more of the Brevan Howard feeder fund (BH Macro). BH Macro is listed in London as a closed-end investment fund. It provides access to the Brevan Howard Master fund and invests primarily in global macro themes with trading strategies across asset classes like fixed income, forex. Returns are somewhat uncorrelated to global equity markets and especially during downturns BH Macro generally shines.

Thank you for reading along.

This publication is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. Past performance is not indicative of future results.

Inspired by the recent market fears around SaaS disruption through AI, I continue to think about businesses or more broadly about industries that seem quite immune to disruption.

One sector standing out is transmission and distribution of electricity. While returns are regulated, the assets are extremely difficult to replicate. There are a few pure-play companies that are not vertically integrated and therefore have no generation business (which is great). If generation technology changes they will not be affected, and transmission still remains essential.

In 2006, Warren Buffett attempted an acquisition of the transmission assets of TXU but was ultimately outbid by Sempra Energy.

I listened to a podcast this week with the CEO of Fortis Inc., a Canadian holding company that owns more than $60 billion of regulated electricity and gas transmission and distribution assets across North America. The entire company is managed from a headquarters of only 50 employees in Newfoundland. It is one of the largest pure-plays in the sector.

(Energy) infrastructure that is essential, regulated, and nearly impossible to replicate tends to age very well as an investment.

If you are interested in the topic, I highly recommend this episode:

One Asset

This week, for me, was all about Berkshire Hathaway. CEO Greg Abel announced he intends to purchase Berkshire shares with his entire net salary of approximately 15 million USD throughout his tenure. After consultation with Warren Buffet Berkshire also has resumed share repurchases on Wednesday. The last share repurchases happened in 2024.

Alignment between me as a shareholder and company management is one of the most important factors when evaluating a business. Knowing that my capital is in good hands, and there is a very high probability that decisions will (continue) to be made through the lens of a long-term owner by the management team feels very comforting. As a Berkshire shareholder, I have rarely felt more comfortable holding the stock.

Thank you for reading along.

Research released a compelling piece of research on February 22nd that triggered an overwhelming media response, sparking intense debates and criticism:

• Citrini Founder Shocked His AI Prediction Spurred Stocks Selloff (Bloomberg)

• White House Economist Calls Citrini AI Report “Science Fiction” (Bloomberg)

• FT Coverage

Markets were down the following day, with SaaS, payment networks, wealth management, and a few other industries being hit. The Macro Memo illustrates a quite bearish AI scenario for 2028. Without diving into too much details (I recommend reading the memo) it paints a trajectory: Companies realize they can replace white collar workers. Layoffs start, which leads to less consumer spending, hurts the economy, and incentivizes companies to focus even more on the bottom line and introduce more cost efficiency programs. It is a vicious cycle. From the memo:

It was a negative feedback loop with no natural brake. The humanintelligence displacement spiral. White-collar workers saw their earnings power (and, rationally, their spending) structurally impaired. Their incomes were the bedrock of the $13 trillion mortgage market - forcing underwriters to reassess whether prime mortgages are still money good.

I find the memo extremely valuable, it is a great starting point for scenario planning. The timeline may be ambitious, and I do not expect something like this before 2030. What is truly entertaining is the fact that reactions were so mixed. Neither governments, nor investors like the idea that AI may initially, in a period of transition, not be net positive for society / humanity / economies. Industrial revolutions were always part of our history, and personally I do believe we will live in a better world in 20 years, but I think that we cannot rule out the possibility that near-term impact (say 5-10 years) will be rough, bearish, and marked with job losses, and corresponding financial market reactions. Remember that economies are driven by consumer spending. Are we prepared for that?

One Asset

Gold and oil posted solid gains in expectations of the events currently happening in the Middle East over the last 4 weeks. The scale of what is currently happening and the timeline is completely unknown, and I wonder what the market has already priced in, and what may be priced in over the next few days. Any involvement of ground troops in Iran is unlikely with a population of over 90 million people and a landmass that is roughly 2.4 times as large as Texas, so I am keen to see what the mid-term plan is.

Worth Noting

The Wigmore Association released its 2026 Capital Markets Outlook.

Wigmore is a group of five global family offices, including HQ Trust, a multi-family office with its roots in the Quandt family (BMW).

It is a quick five-minute read and well worth your time.

Thank you for reading.

This week’s CIO Note has a little different format. I am combining all three sections in one theme:

A CNBC article on Mattel brought toy manufacturers to my mind again.

Mattel posted peak sales in 2010. After that, the industry changed. Cheap imports from China, Vietnam, and elsewhere commoditized large parts of the toy market. Consumers became more price-sensitive, and recent inflationary pressures have likely reinforced that behavior. Add to that pressure from tariffs.

The total return numbers over the last decade tell the story:

• Hasbro: +92%

• Mattel: –42%

• Games Workshop: ~+5000%

At first glance, Mattel and Hasbro look like excellent businesses:

• Global footprint

• broad product portfolios

• powerful brands such as Hot Wheels, Play-Doh, Fisher-Price, Nerf, and Monopoly

But strong brands and scale are not enough if industry dynamics work against you. Mass-market toys are often hit-driven, retailer-dependent, and vulnerable to price competition.

Games Workshop, on the other hand, is different:

Games Workshop is a British manufacturer and retailer of miniature wargames, best known for the Warhammer and Warhammer 40,000 universes. The company does not just sell toys. It sells a hobby ecosystem.

Customers assemble and paint miniature figurines, they meet for games, buy rulebooks, novels, hobby supplies, and increasingly engage through licensed video games and other media. Games Workshop owns the intellectual property behind the Warhammer universe, this includes characters, stories, and artwork which creates a defensible and monetizable asset base. While Mattel and Hasbro optimize for mass-market reach, Games Workshop optimizes for intensity of engagement. It is easy to manufacture a toy for a 5 year old kid of plastic, but it is almost impossible to replicate decades of world-building, customer engagement, and brand loyalty in a niche.

One additional thought: in an increasingly digital world, physical communities built around shared hobbies may become more valuable in the future.

This podcast is very good starting point if you are interested in the topic:

This is not investment advice. Do your own research.

Thank you for reading and enjoy the next week!

Apollo’s Torsten Slok recently wrote on AI:

“After three years with ChatGPT and still no signs of AI in the incoming data, it looks like AI will likely be labor enhancing in some sectors rather than labor replacing in all sectors.”

I see a lot of speculation on what AI could mean in the future for industries such as SaaS, rating agencies, real estate services, and many others. Yet, so far, the measurable impact is quite limited. Markets seem eager to price in disruption before disruption shows up. The current price action suggests something more nuanced: uncertainty rather than conviction in a certain story. Markets are not decisively pricing in collapse or transformation, they are just discounting a set of open questions which brings me to the next company: S&P Global.

One Asset

The market appears concerned that AI could disrupt S&P Global’s Market Intelligence segment and potentially commoditize elements of its ratings franchise. I do not see the ratings business as structurally threatened. It remains deeply embedded in the financial system, with regulatory entrenchment and strong pricing power. Market Intelligence is more exposed, in my view, but it is also the lowest-margin segment (approximately 18% operating margins versus roughly 60% in ratings). Importantly, it provides steadier recurring revenues compared to the more cyclical ratings business.

S&P has long been considered a “quality compounder” with the typical story attached to it: consistent growth, strong free cash flow conversion, high margins, and disciplined capital allocation. The market is now discounting a more uncertain future. That does not mean the thesis is broken or the business is bad. The narrative has just changed from easy to a few more question marks.

Worth Noting

I published the January 2026 Portfolio Update including two portfolio additions:

• A position in the AQR Apex Fund, a multi-strategy hedge fund

• Deutsche Boerse, which I view as an emerging market infrastructure monopoly in Europe.

I hope you enjoy the read.

Thank you for reading and enjoy the next week!

The portfolio returned 0.7% in January 2026. The long-term objective is to compound capital at approximately 7–8% annualized over a full cycle, while limiting drawdowns to a level that allows disciplined decision-making during periods of stress.

Top contributors / detractors during the month:

• Contributors: Gold, Global Equities (Vanguard FTSE All-World), Colgate-Palmolive

• Detractors: Berkshire Hathaway, Christian Dior, Nestlé

Asset Allocation

Commentary

The portfolio ended the month with an allocation of 68% equities and 32% diversifying strategies. Two new positions were added in January.

AQR Apex Fund
A position in the AQR Apex UCITS Fund, managed by AQR Capital Management, was established. Apex is AQR’s multi-strategy vehicle combining different return streams such as global macro, equity long/short or corporate arbitrage. The strategy seeks to deliver equity-like returns over the long term with a low correlation to traditional markets. Historically, Apex has performed quite well cross various environments. In EUR the strategy delivered a CAGR of 9.43% since November 2018 which is roughly 2% lower than global equity indices. Over the last 5 years, the strategy has outperformed global equity indices.

The strategy is certainly not one with the lowest volatility, but I am satisfied with the expected returns and believe it is a great diversifier for the portfolio. The position may be increased over time. Within the hedge fund allocation, it represents my highest conviction position.

Deutsche Boerse
A position was also initiated in Deutsche Boerse AG. This is arguably the most vertically integrated European market infrastructure provider. The group combines trading venues, clearing, custody, fund services, data, and investment software within a single ecosystem:

• Investment Management Solutions (IMS)

  Deutsche Boerse provides mission-critical front-to-back software (SimCorp), portfolio analytics (Axioma), ESG research and governance services (ISS), and index products including the STOXX and DAX families.

• Trading & Clearing

  Operates key platforms such as Eurex (financial derivatives), EEX (energy and commodities), 360T (FX trading), and Xetra (cash equities and ETFs).

• Clearstream

  Provides custody, settlement, collateral management, and fund processing services globally. A potential acquisition of Allfunds will further strengthen its position in fund distribution and deepen its integration.

My investment case rests on three main pillars:

• The growing strategic importance of financial market infrastructure and (good) data.

• Increasing European policy focus on capital market development and pension reforms. Both, German chancellor Friedrich Merz and Ursula von der Leyen, have recently highlighted the importance in speeches. I see Deutsche Boerse as the main beneficiary as it is the most integrated player in this field in Europe.

• A gradual shift toward higher recurring revenue through data, software, and services.

Positioning
I have certain legacy holdings in the portfolio, accumulated over years, that currently are above the target weight I have in mind. Within the equity sleeve consumer staples exposure is elevated. High-conviction holdings such as Deutsche Boerse and Visa are below my desired strategic weights.

Gold has experienced a strong advance over recent months. Should the position increase its relative weight any further I may consider to trim the exposure and put the money to work elsewhere. My exposure to catastrophe bonds has grown as well over the past years. This particular asset class benefited from higher interest rates, and reduced capital inflows following repricing as fixed income with similar risk and return characteristics became more attractive again. Should interest rates decline again, capital inflows may increase and premiums may compress. The current position size of over 11% exceeds my original intentions, and I am considering a partial reduction (probably in favor of AQR Apex).

Thank you very much for reading. Subscribers will receive further updates and research as the portfolio evolves.

This publication is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. Past performance is not indicative of future results.

highlighted an interesting quote by Dan Loeb, founder and CEO of Third point:

“A simple query into Claude’s chatbot — ‘Which companies is Anthropic capable of dislocating or disrupting?’ — yields some fascinating results and was, in our view, a fruitful source of hedges for our firm.”

This touches on something I’ve been thinking about quite a bit: what happens to price discovery in the markets, research and the edge of active strategies in a world where high quality tools are available for everyone. You just have to ask the right questions.
Never before was it so easy for every investor to read a headline and get the same insights seconds later with the same conclusions. Narratives may translate even quicker into markets and at larger scale than before. I think it makes it even more important to find good companies and just continue to hold on to them. This will still be the greatest “edge” you can have as an investor.

One Asset

This week I spent more time digging into Visa, particularly financial statements, podcasts, and other material to better understand how developments such as stablecoins, central bank digital currencies, and the potential success of a domestic European payment system could affect the business.

The stock initially caught my attention after falling toward the lower end of its historical valuation range. Will get back on this in the future.

Worth Noting

Seafarer Overseas Value Fund Letter

My recommended reading this week is the latest letter from Seafarer Overseas Value Fund. I regularly enjoy their commentary. The fund focuses on emerging markets, especially Asia, and the letters often provide clear insights into portfolio companies, positioning, and long-term thinking.

Thank you for reading and enjoy the next week!

Donald Trump has picked Kevin Warsh as a candidate for the next Fed Chair. He is paving the way to eventually replace Jerome Powell.

The debate about whether Warsh is a dove or a hawk feels secondary to me. The Fed Chair does not set policy alone, the FOMC does that. What will matter far more is communication and signals. I expect markets to focus very much on initial messaging, interviews, public appearances rather than now drawing conclusions from the past. We may or may not see some surprises here. Rate cuts are far from assured.

One Asset

Gold and silver experienced heightened volatility this week. Gold remains part of the Tiny Family Office portfolio.

I briefly considered trimming exposure, but the recent move never turned into a true vertical one and ultimately reversed on Friday. From a strategic allocation perspective, gold continues to serve its purpose: a hedge against fiscal dominance, geopolitical risk, and currency debasement. I see no reason to change the long-term allocation.

Worth Noting

Podcast: Odd Lots - What It Takes to Build One of the World’s Biggest Banks

A great discussion on PNC’s strategic direction, technology investments, and the impact of AI on cost structures and product offerings (which may actually be smaller than we think). CEOs are generally quite good salesmen but Bill Demchak of PNC seems exceptionally likeable. Worth monitoring as an investment case.

Thank you for reading and enjoy the next week!

Exciting few days, and I spent some time this week watching the echoes after Davos. No big surprises there.

Markets calmed down as the Greenland situation faded from the headlines. What initially felt dramatic, with headlines dropping the U.S. would militarily secure the territory of a NATO ally, got absorbed quite quickly. New rumors are already circulating around a potential U.S. military intervention in Iran.

Circling back to Davos, one thing stood out to me: Ursula von der Leyen’s speech. It was a remarkably clear articulation of what Europe needs to do if it wants to remain economically relevant.

One statement in particular caught my attention:

“We are now building the Savings and Investment Union. We need a large-scale, deep and liquid capital market that attracts a wide range of investors…”

This leads me to the next point.

Deutsche Boerse and Market Infrastructure

I own Deutsche Boerse AG, which is arguably one of the most integrated market infrastructure businesses in Europe. It is operating across trading, clearing, settlement, custody, data, and financial software through platforms such as Xetra, Eurex, and Clearstream and has now reached a deal to acquire Allfunds.

Initially, I was skeptical whether such a transaction would pass European regulators. But hearing this speech, and seeing the political momentum behind capital market integration makes me more open to the idea that this deal could actually go through.

If completed, it would further cement Deutsche Börse as a central backbone of Europe’s financial system.

Why Allfunds?

Here is a short quote from the website giving an overview of the business activities:

“Allfunds (AMS: ALLFG) is one of the leading global WealthTech companies with a service offering tailored for Fund Houses and Distributors that ranges from dealing and execution services, to data analytics, reporting and portfolio tools, ESG advisory and custom software solutions.”

Since going public Allfunds nearly halved its share price, the performance was not great at all. But, Allfunds combined with Clearstream and a growing software and data business for asset managers would meaningfully deepen integration across the whole value chain for Deutsche Boerse. In the short term, the acquisition may pressure the share price. Long term, it strengthens the strategic positioning.

Bonds and “Abnormal Markets”

The Bank of Japan reiterated this week that it would intervene if markets “react abnormally.” Looking at long-end yields globally, I struggle with that statement.

Long-term yields are rising not only in Japan, but also across Europe and the United States. It is not abnormal. It is rational.

Investors are demanding a higher premium in a world of:

• structurally higher government spending,

• persistent fiscal deficits,

• rearmament

Sometimes I feel like if markets react to anything that politicians do it is immediately labeled as dysfunctional. I would genuinely enjoy a long conversation with the more enthusiastic proponents of Modern Monetary Theory about where the limits are supposed to be…

A Note on Nestlé

An interesting read this week came from Magellan Investment Partners on Nestlé, another portfolio holding.

You can read it here.

Nestlé currently trades at roughly a four-turn discount to its 10-year average forward P/E. Investor sentiment has turned negative due to a sequence of developments largely outside management’s control: cost-of-living pressures, commodity inflation, post-pandemic consumption normalization, and a recent leadership change.

Last year, I initiated a first position in Nestlé. It was an impulsive valuation-driven decision. Companies like Nestlé rarely become materially cheaper unless investors start questioning growth, pricing power, or consumer resilience.

I do not know how long these headwinds will persist. They are certainly there. What I do know is that Nestlé has the scale, balance sheet strength, and operational depth to adapt. Over a 20-year horizon, I am quite confident the company can deliver satisfactory returns as part of a defensive portfolio serving basic human needs.

It has the backbone and scale to do what is required.

This is no financial advice. Please do your own research. I can be wrong.

Enjoy the upcoming week!

This week will likely reinforce a point I have made repeatedly over the past months: It is probably not the worst idea to have a diversified portfolio in terms of asset classes.

I had expected gold to have reached a short-term peak last year. After this week’s developments, that assumption may have been a little premature. President Trump’s latest comments and actions, renewed pressure on Europe and the announcement of potential 25% tariffs tied to the demands for Greenland remind me again of the volatility in politics we have seen in the past years.

A Brief Note of Self-Reflection

In the first From The Desk of 2026, I wrote about Greenland and framed the most likely outcome as a negotiated solution between the U.S. and Denmark without any necessary escalation. I expected some tough negotiations, but I did not expect new tariffs. This reminds me of how little we really know and how little we can really predict. We will see what the coming weeks and months will bring.

This week is also shaping up to be interesting from a policy perspective. A court ruling on the current tariff framework is expected mid-week, potentially as early as Wednesday. Depending on the outcome, this could once again shift narratives and markets quickly.

Air Liquide

Over the past days, I also revisited an older podcast conversation between Nicolas Tangen and the CEO of Air Liquide. It remains well worth listening to:

Air Liquide is a truly impressive business that I had wanted to own for some time. The business model seems well positioned with several structural tailwinds: onshoring and reshoring of production, inflation-linked contracts, and exposure to growing markets such as semiconductors, space, and advanced manufacturing. I will be taking a closer look at the company in the next weeks. Perhaps a correction in equity markets will provide a good entry point for me.

Enjoy the week!

The year has already started in a way that once again confirms what some have come to call “the new normal”: a world where initially unusual, and unsettling things happen, and markets learn to live with them.

Donald Trump already removed Maduro from power. We have seen U.S. forces board a Russian-flagged vessel just days ago. On X, many immediately declared that “red lines had been crossed.” And yet nothing happened. No immediate escalation, no direct confrontation.

This is the world we are operating in now. I do not expect 2026 to be any calmer. At the time of writing, I am also watching developments in Iran closely.

Despite initially aggressive trade rhetoric and potential “tariff wars”, and policy uncertainty, the global economy has proven more resilient than many feared. President Trump’s America First agenda and trade confrontations dominated much of 2025, alongside the AI investment boom, rising geopolitical tensions, and Europe’s historic rearmament (and lacking growth).

Global growth remains close to 3%, broadly in line with recent years.

We enter 2026 from a relatively solid starting point. With the so-called “Liberation Day” now behind us it is difficult to construct a near-term scenario where the global economy truly derails. Companies and economies adapt quickly.

There are a couple of major developments I will be watching particularly closely this year:

Can Germany Reignite Growth?

The loosening of the debt brake has opened the door to large-scale investment in defense and infrastructure. We are also seeing encouraging, and politically meaningful, steps in capital markets: a new German “micro” pension scheme based on equity investments and the creation of a small sovereign wealth fund. Americans may smile at the scale, but for Germany this represents a substantial shift.

Structural challenges, however, remain formidable:

• An aging population

• Unfunded pension obligations

• Lagging productivity

• Intensifying competition from China, particularly in automotive manufacturing

• High energy costs, expensive labor, and a bloated bureaucracy

An Independent Federal Reserve?

Another key issue is the appointment of Jerome Powell’s successor as Chair of the Federal Reserve.

President Trump has been explicit in his desire for significantly lower interest rates. It is reasonable to expect that the next Fed Chair will be more receptive to White House preferences. That alone is not necessarily problematic as the Chair does not set policy unilaterally.

The risk lies elsewhere.

If markets begin to question the independence of the Federal Reserve, confidence could erode quickly, particularly in bond and currency markets. Long-term yields not (short-term) policy rates will be the signal to watch.

Greenland: Will Donald Trump follow through?

According to betting platform Kalshi, there is roughly a 40% probability that the U.S. will take control of some part of Greenland. This would have far-reaching implications for the U.S. role within NATO and Europe’s security architecture.

My personal view is that an agreement with Denmark will ultimately emerge: Europe will increase its presence in Greenland, and U.S. troops will likely do so as well. European leaders appear hesitant to meet Trump’s demands head-on, but Europe today is too fragmented and too weak to stand entirely on its own.

In a world undergoing a clear reshaping of the global order, steering away from the United States does not strike me as a prudent strategy.

Berkshire and the Long View

On a personal note, I will be watching Berkshire Hathaway closely this year as it is Greg Abel’s first year as CEO.

Over the Christmas period, I spent time reflecting on Berkshire’s role across themes such as grid expansion, energy security, a possible lender of last resort, and its unique portfolio of privately owned operating businesses.

There are very few companies globally that can play such a broad set of themes simultaneously. To me, Berkshire remains one of the greatest companies in the world, and I am proud to hold it in my portfolio.

The Portfolio

I have also partially introduced The Tiny Family Office portfolio, outlining a structure of roughly 70% equity investments and 30% alternatives, including hedge funds, insurance risk, credit, and gold.

👉 https://www.tinyfamilyoffice.com/p/introducing-the-portfolio

I encourage you to read it carefully.

I wish us all a healthy, thoughtful and fruitful year 2026.

Yours sincerely,

The Tiny CIO

As an investor I always assume I will most likely be wrong all the time. This portfolio is not designed to be exciting. It is designed to survive, and compound, across cycles, regimes, narratives, and despite my own mistakes. It is not designed to achieve a performance of 15% annualized. I do not optimize for quarterly outperformance.

Most retail portfolios depend on a single bull market in stocks. I have built this portfolio to compound across various cycles, inspired by the endowment models of Yale and Harvard, but adapted for individual implementation.

Structure

The portfolio is built around two functional sleeves, as visualized in the charts below:

1. Equity Allocation (≈70–75%)

This is my portfolio part for long-term participation in global growth. The equity portfolio is intentionally conservative. The core consists of global equity exposure through an index fund. I also add individual companies based on my research. Rather than trying to predict the next technological wave, I focus on businesses that benefit from structural demand, high capital returns, and limited risk of disruption. The businesses in the portfolio can be categorized into a few functional categories such as capital allocators or toll booths of economic activity.

2. Diversifying Strategies (≈25–30%)

The purpose of this part is not return maximization, but the reduction of dependence on an equity bull market. It is designed to perform when equities fail, and markets get shaken. The inspiration to invest in alternatives initially came from David Swensen. It then developed through a savvy (finance) community, and was possible due to generous decision by my banks (thank you) to give me access to the funds. I have allocated to specialized vehicles typically reserved for much larger institutional investors. The portfolio consists of e.g. multi-strategy hedge funds, discretionary macro strategies or some long / short funds. Furthermore, I hold insurance risk exposure through cat bonds, I own credit and some gold or other commodities (real assets).

No single strategy works all the time, but together, they provide the resilience necessary to withstand environments where my traditional equity portfolio will struggle.

Principles & Constraints

• I assume equity returns over the next decade will be lower than the last one.

• I assume macro shocks will be more frequent, not less (Maduro just got extracted from Venezuela last night, while I was writing this post).

• I assume I will change my mind slowly and publicly. The portfolio will change, too.

What I Avoid

• Private Equity: I avoid the illiquidity and the extreme performance gap between top-tier managers and the rest. Also I believe access is really limited to the best funds.

• Long-Duration Bonds: I avoid locking in capital for decades at low yields.

• Crypto: I prefer assets with productive cash flows or a multi-century history.

A Final Note

You may enjoy my weekly newsletter CIO Notes. I share a curated selection of what caught my eye in markets, what I read, or which podcasts I listened to. I also share insights from fund manager letters, industry research, and other sources currently influencing my decision-making as a capital allocator.

You can join the conversation by subscribing below.

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Full allocations, changes, and commentary are shared in the Monthly Portfolio Letters.

It’s the most wonderful time of the year - like Andy Williams sang correctly, I would just like to give you a few Christmas wishes this week.

Let’s forget about investing for the next few days. At least until after the New Year. Markets will still be there. Portfolios will still be there. But time with family and loved ones is not something we get to compound later.

When I think about family and health, I often think of Charlie Munger and Warren Buffett. Charlie lived a remarkably long life, and Warren continues to defy age. I’m sure part of the reason is not just luck (probably good genes, too), but deep curiosity, genuine interest in the world, and the fact that they truly love what they did.

I still remember the first Berkshire Hathaway meeting after Charlie’s passing. Warren was asked what he would do if he had one more day with him. His answer was simple and deeply revealing:

“In effect, we already did have one more day. We lived every day doing what we enjoyed doing. Charlie liked learning, he liked a wide variety of things, and we had a lot of fun doing anything together. If I’d had another day with him, we would’ve done the same things we’d always done, and we wouldn’t have wanted to know it was the last day.”

He added something that has stayed with me ever since:

“There’s a great advantage in not knowing the day you’re going to die.”

Here is the video of Warren’s very humorous and touching answer:

There’s something quietly profound in that.

I wish you and your families a wonderful holiday season filled with health, happiness, and a bit of perspective. May the new year bring calm minds, good decisions, and the kind of prosperity that extends beyond portfolios.

Best wishes,

The Tiny CIO

RIT Capital Partners sits in the Capital Allocators sleeve of The Tiny Family Office portfolio: This sleeve contains vehicles whose edge lies not in operating leverage but in long-term capital allocation across cycles. They deploy capital often better than I ever could.

Founded as the Rothschild family office and listed in 1988, RIT was designed to compound real wealth across generations.

Since inception, RIT has compounded NAV at an impressive rate of ~10.4% per annum. Over the last decade alone, NAV (not share price) has more than doubled. Yet today the shares trade at a ~25–30% discount to NAV, reflecting skepticism toward private assets, structural complexity, and the investment-trust format rather than underlying economics.

Recent evidence directly challenges that skepticism. Over the last ~18 months, RIT has realized roughly 25% of its private portfolio, with exits at or above carrying values, including notable realizations in AI and fintech. As of September 2025, NAV total return is ~10% year-to-date, with all three portfolio pillars contributing positively.

Management incentives are unusually well aligned: bonuses are capped, largely paid in shares with multi-year vesting, and subject to clawbacks. The Rothschild family remains a >20% shareholder, reinforcing generational stewardship.

At current prices, even conservative assumptions imply mid-single-digit returns; a partial narrowing of the discount lifts expected IRRs into the low-double-digit range.

Share Performance & The Tiny Family Office Portfolio

The performance of RIT must be viewed over decades and cycles. Taking just the last ten or twenty years (chart by Sharesight above) this certainly does not seem like a great investment, does it? It has underperformed the broad indices. Let’s see.

A portion of my portfolio is invested in Capital Allocators. This investment theme or portfolio sleeve exists for businesses whose primary skill is decision-making with capital.

There are a couple of good examples in Europe or the UK: RIT Capital, EXOR NV, Sofina SA, Investor AB. But also good capital allocators can be found in the U.S.. There is especially one: Berkshire Hathaway. Although Berkshire is an outlier because it is much more involved in actual operations of businesses.

Often these capital allocators have a family background which I like very much. They allocate capital across companies, geographies, and asset classes. They have access to investment vehicles and deals that I could never have as a private investor. In a crisis they are not hesitant to deploy capital or could even function as a lender of last resort (before the Fed) in the example of Berkshire Hathaway.

RIT fits naturally into my portfolio. It is neither a traditional equity fund nor a private-equity vehicle or a hedge fund. It is a permanent-capital allocator that combines all three, supported by a network built over decades and incentives designed for longevity. It is a publicly traded investment trust with permanent capital.

Portfolio & Performance Overview: Three Pillars, Three Behaviours

RIT’s portfolio is deliberately structured around three return engines, each designed to behave differently across market environments:

• Quoted Equities: liquid, diversified, mark-to-market compounding through direct investments and fund managers

• Private Investments: growth (important), and asymmetric upside

• Uncorrelated Strategies: absolute return, hedge funds, credit funds working as a volatility dampener and capital stabiliser

The key insight: these pillars are not meant to outperform simultaneously. They are meant to coexist, allowing the trust to compound through regimes rather than chase cycles. This is very similar to how I built the portfolio of The Tiny Family Office.

The above chart shows the performance contributions by portfolio pillar since 2015. Example: If you look at 2024 this means that Quoted Equities contributed 6.9 percentage points of performance to the NAV, Private Investments 1.8 %, Uncorrelated Strategies 1.3 % and Currencies -0.3 %, leading to a Total Investment Performance of 9.7% across the whole portfolio (unadjusted for borrowings) for 2024. I produced this chart to look particularly at Uncorrelated Strategies. The RIT management seems to be doing a very good job allocating capital there, because contributions to Total Performance were positive in every year (except 2022), exactly what I want to see in a portfolio containing alternatives.

The chart above shows how stable (or unstable) the allocations in the three pillars were as % of total NAV. After 2020 valuations for Private Investments were definitely over the top, which is reflected in the sudden rise as a % of NAV. These valuations have come down by now, and also RIT management has been reducing exposure to private assets taking advantage of valuations. In the next steps I will examine every pillar one by one to get you through the portfolio.

Pillar I: Quoted Equities

RIT’s quoted equity portfolio is best understood as a collection of high-conviction themes expressed through a mix of direct holdings and specialist managers, rather than a top-down geographic allocation.

The U.S. remains core but capital has increasingly flowed to Europe and Asia, also highlighted in recent interviews with the CEO Maggie Fanari. This reflects a belief that returns are broadening in a more multipolar world.

Rather than relying on broad indices, RIT partners with specialist managers who bring deep domain expertise. RIT also holds direct, high-conviction public equities, typically businesses with strong competitive positions, durable cash flows, and long reinvestment runways. As of July 2025 the split in the equities section was roughly 50/50 between direct investments and fund managers. The portfolio is centered around certain themes:

• China & Asia: specialist managers focusing on domestic champions, platform businesses, and mispriced cyclicals

• Quality: companies with high barriers to entry

• Japan: exploiting corporate-governance reform, balance-sheet optimisation, and shareholder-friendly capital allocation

• Healthcare & Biotech

• SMID: overlooked target segment outside mega-cap consensus trades

Below you will find an overview of individual stock holdings and also funds:

One question that naturally comes up: what would RIT’s results have looked like if the quoted equity sleeve had simply been a passive global index fund? In some years, especially during periods of U.S. megacap dominance, the answer is probably yes, returns would have looked better on a narrow, ex-post basis.

But that’s not the right test. RIT’s equity book is not built to win every momentum regime. It is built to diversify return sources, avoid single-factor dependence, and interact sensibly with the private and uncorrelated sleeves. Replacing it with a passive index would likely have increased correlation to global equities, amplified drawdowns, and changed the portfolio’s behaviour in precisely the environments where RIT is supposed to earn its keep.

Pillar II: Private Investments

Private investments are the most misunderstood, and (probably) most valuable hidden part of RIT.

They currently represent ~30% of NAV, down from over 40% in 2022 following substantial realizations. The reduction was intentional by management, and they have clearly stated that they will continue to keep the target range of 25 to 30% of NAV.

RIT either invests directly in private deals or partners with a small group of elite managers. These managers are often oversubscribed and selective in whom they allocate capacity to.

Key partners include:

• Thrive Capital: known for backing category-defining technology companies such as OpenAI; long-term, founder-aligned

• Greenoaks: disciplined growth investor (e.g. Scale AI, Coupang)

• Iconiq: late-stage growth with deep access to global tech founders

• Ribbit Capital: fintech specialist (Xapo, Stripe, Kraken)

• Founders Fund: contrarian technology investing

• BDT/MSD: long-duration family capital

These relationships give RIT something rare: both fund exposure and selective co-investment access.

Direct Private Holdings: Examples & Realisations

RIT’s direct private portfolio focuses on category leaders. Management stated they do not intend to make any speculative early-stage bets. A few examples:

Management has stated that ~99% of direct private holdings are either profitable or have >12 months of cash runway, which materially lowers downside risk (in theory).

“Investments are considered profitable on the basis of either EBITDA, FCF or Net Income.”

This is where accounting definitions deserve skepticism. EBITDA profitability, in particular, can be a very forgiving concept. It is useful for lenders, less so for owners. Charlie Munger would likely have dismissed the footnote in a single sentence.

That said, this statistic is not central to the investment case. What matters far more is the quality of the allocation decisions, the quality of the fund managers.

As visible in the chart(s) below, investments are diversified by position sizing, fund sizing and also by sector / industry.

Over the last ~18 months, RIT has realized roughly 25% of its private portfolio, including:

• £175m of realizations in 1H25 alone

• Exits historically averaging ~23% above carrying values

• Recent highlighted exits ~100% above carrying values

There is no guarantee that the remaining 30% of NAV can only be realized below carrying values.

Personally, I remain cautious towards private equity and valuations in this sector. The recent offering of products to retail investors in this sector is not a great thing, it is a warning sign.

RIT has an experienced management team, and access to the top-notch private equity funds and investments. If I want any exposure to this sector then most likely through these top funds and through RIT. I will avoid anything else. I am aware of the discount the market currently assigns to RIT, and I am certain that this is not totally wrong. However, as you will read later, I highly doubt that a 25% discount is justified.

Pillar III: Uncorrelated Strategies

The uncorrelated sleeve exists for one purpose: allowing RIT to stay invested elsewhere when markets dislocate.

This pillar includes:

• Absolute-return hedge funds

• Macro and market-neutral strategies

• Public credit (explicitly not private credit)

• Gold and select real assets

Management has been explicit in recent interviews about avoiding private credit, preferring liquidity and true diversification over yield illusion. I like that approach.

In early 2025 among market volatility due to tariffs, this sleeve delivered mid-single-digit positive returns, exactly as intended, and over time has usually had positive contributions to overall returns.

At The Tiny Family Office I also have between 20 and 30% of capital allocated to uncorrelated strategies. My own exposure is a bit lower to credit strategies compared to RIT, but also includes macro, multi-strategy, and equity market neutral funds, as well as gold.

Management, Incentives, and Alignment

RIT’s governance structure is very aligned for a listed vehicle.

• The bonus pool is capped at 0.75% of NAV

• In negative years bonuses are obviously lower

• High-water marks apply

• ~60% of variable pay in shares, multi-year vesting (3 years + 2 year lock-up)

• Clawback and malus provisions

The Rothschild family owns >20% of the trust, anchoring the shareholder base with permanent capital. I like this very much, it gives me a better feeling as an investor that my interests are aligned with other large shareholders.

The CEO: Maggie Fanari

Maggie Fanari spent nearly two decades at Ontario Teachers’ Pension Plan. She invested across public markets, venture, growth equity, and private assets globally and ran a high-conviction public equity portfolio. I do not expect RIT to suddenly employ a super successful concentrated investment strategy in equities such as TCI under Chris Hohn, but I believe that Maggie Fanari will certainly allocate capital across the various portfolio pillars in a prudent and rational way to ensure the investment goals are met.

Under her leadership, RIT has already made rational portfolio realizations in private markets, initiated buybacks (to close the discount to NAV), and increased investor engagement.

The Discount

RIT trades at a ~25–30% discount to NAV. Management has responded rationally with:

• ~10% of shares retired since 2023 (roughly £300m)

• YTD approximately £75.6m of shares adding an estimated accretion benefit of +76bps of NAV

The discount does not need to close for RIT to work. It merely provides upside optionality. Historically RIT even traded at a premium to NAV. Worth to keep in mind: During the time it traded at a premium (from 2015 to 2019) private assets were roughly 25% of NAV. I think management will reduce today’s numbers back to 25% again. The question is: Will that change anything in the discount? I do not know.

If realizations continue to work, however, the discount should close at some point or at least get closer to 0 than it is now.

Investment Thesis

At current prices, and assuming a 2% dividend is paid each year and reinvested I calculated some scenarios based on a ten year investment horizon:

• 4% NAV growth, discount unchanged → ~6% IRR

• 4% NAV growth, discount narrows to 10% within 10 years→ ~8% IRR

• 7% NAV growth, discount narrows to 15% → ~10–11% IRR

The issue with investment trusts is always that there is absolutely no guarantee that the discounts will close at some point.

Another prominent example: Exor NV. It is the holding company of the Agnelli family with many public investments in companies like Ferrari or Philips. The discount is closer to 50%, and management has also been addressing this issue by selling off (an in my opinion) overvalued holding like Ferrari to buy back shares. RIT Capital, however, is materially more diversified than Exor, so I would not want to compare these two directly.

RIT Capital Partners is not a free lunch, and I do not want to treat the current discount as something that must close. Besides the fact that the discount may continue to persists there are more risks.

Private asset returns may normalize. If exit multiples compress, IPO windows close intermittently, and realizations slow.

Markets could remain narrowly concentrated. If equity returns continue to be driven by a small group of large U.S. technology companies, RIT’s diversified, global, manager-driven approach may lag simple beta for extended periods.

The correct way to think about RIT is not as a “discount-closing trade”. At the current valuation I basically get the private investment portfolio for free while the equity and absolute return section should provide satisfactory returns alone over the next years to come. If the discount narrows, returns accelerate. If it does not, I will still earn NAV growth driven by disciplined capital allocation, private realizations, and crisis resilience.

Summary

RIT Capital Partners is for investors seeking durable compounding, access, and resilience, run by people who think in decades.

Looking at investor outcomes since 2010, RIT’s performance appears underwhelming, particularly for non-GBP investors. From a EUR perspective, total returns compounded at roughly 5.41% p.a. over the last 15 years. This is based on the share price (not NAV). A passive global equity index would have performed materially better over this period.

This underperformance reflects a decade dominated by U.S. megacap equities, a narrowing opportunity set, and limited reward for diversification. RIT’s structure paid a real opportunity cost during this regime. The investment case today therefore does not rest on what worked from 2010–2025, but on whether the next decade will resemble the last decades.

The market currently penalizes RIT for complexity and its exposure to private assets. I do not believe that this is justified in the long run. If it is because private assets are overvalued then the equity market as a whole also will have problems with valuations. Keeping in mind the recent realizations, the capital allocation discipline, aligned executive incentives and the overall long term returns I find the penalty excessive. I currently hold RIT since more than a year at 1.5% of my portfolio, a deliberately cautious allocation. I am comfortable with this position and view it as a long-term holding.

This is not investment advice. Please read the disclaimer.

I really like to read the T. Rowe Price Weekly Reviews. Here is a summary of what they saw: Global markets ended the week mixed, reflecting a familiar late-cycle tension between easing policy and valuation concerns. In the U.S., equities initially pushed to new highs after the Fed delivered its third consecutive rate cut of the year, but gains faded as technology stocks sold off on renewed doubts about AI-related capital spending paying off. Longer-dated Treasury yields moved higher, underscoring that easing policy does not automatically translate into lower long-term borrowing costs.

In Europe, equity markets were broadly flat, with policymakers signaling a prolonged pause rather than further rate cuts, while economic data continued to point to sluggish growth. Japan stood out modestly on expectations of a Bank of Japan rate hike, reflecting stronger wage and inflation dynamics, while China’s markets drifted lower amid persistent deflationary pressures and only incremental progress on reflation efforts. Overall, the picture remains one of policy support at the short end, but rising selectivity and skepticism at the long end of markets.

Source: T. Rowe Price

Merrill Lynch: affordability and markets in 2026

A section of Merrill Lynch’s Capital Market Outlook that stood out to me focuses on affordability, and how it may shape financial markets in 2026:

“On the economic front, the risk is that consumer spending comes in weaker than expected next year, as higher prices for goods and services crimp the budgets of both lower- and higher-income households. The fact that affordability is impacting higher-income consumers is evident from the fact that Dollar Tree, after reporting that 3 million additional households shopped in their stores in Q3, noted that, of those, 60% had incomes over $100,000.”

The core message is: higher prices and higher interest rates are colliding. The consumer is not doing well. Housing affordability remains stretched, corporate refinancing costs are structurally higher than in the last cycle, and governments are running persistent fiscal deficits (and will continue to do so). Even if central banks continue to cut policy rates, affordability constraints may limit how much demand can respond. Also let us keep in mind that yields on the long end of the curve are rising reflecting caution in the bond markets.

For markets, this implies a less forgiving environment:

• asset prices will likely need to justify themselves with cash flow, pricing power, and balance-sheet resilience,

• businesses with large amounts of debt may see re-ratings

• and valuation dispersion could remain elevated.
  
  Have a look at the chart below:

A few personal notes on housing affordability, but also housing as an investment here in Europe: I can only speak for the German city I live in. Prices remain elevated, owners simply refuse to lower them and my gut feeling is that housing markets are stagnating. Over time one will have to give in, either the buyer or the seller. As an investment overall cap rates are not very attractive here. Gross yields are roughly at 2-3% for large cities like Munich or Hamburg. It is hard to find investments in rental apartments that will have a yield greater than 4 or 5% on invested capital using leverage. Add to that rent controls by the government and you scare every international housing investor away from your domestic housing markets.

Tiger Value Fund: themes they are watching for 2026

Although I am not invested, I continue to read the Tiger Value Fund letters with interest. The Fund holds a portfolio of long and short positions focused on European equities.

Key themes they highlight in their November 25 fund update for 2026:

• Rotation away from crowded AI momentum toward value, defensives, and under-owned small- and mid-caps

• SMID recovery potential driven by stabilizing fund flows, attractive valuations, and rate cuts

• Infrastructure and capex-linked spending, including Germany’s €500bn investment program

• Defense and security upcycle, with global spending expected to rise materially into 2030

• Digital infrastructure, IT services, and automation, benefiting from AI adoption without paying peak AI multiples

• Energy transition and power infrastructure, particularly grids, storage, and efficiency solutions

• On the short side: companies structurally challenged by AI, weak governance, aggressive accounting, or consumer pressure

I wish you a wonderful week!