High quality companies that can compound for many years acquired at a significant discount to our assessment of their intrinsic value
Returns are reported net of all fees. We believe transparency and context matter as much as the numbers themselves.
FY2026 was a difficult year for quality investing. As capital rushed toward AI-exposed narratives, the rolling 12-month relative return for quality compounders fell into the bottom 1% of observations since 1995. The businesses we own were not immune, and our unit price declined accordingly.
Throughout, our view was that this reflected sentiment rather than a deterioration in the underlying businesses, which continued to grow revenues, expand margins and retain customers. History supports that distinction: Microsoft, Visa, Rightmove and Intuit all endured sharp de-ratings of a similar nature, then went on to compound strongly once sentiment normalised. We stayed invested and added to our holdings during the drawdown.
Early FY2027 has begun to bear this out, with performance recovering as the market's focus broadens beyond a narrow set of themes. We remain focused, as always, on owning durable businesses through the cycle.
5AM Capital Global Equity Fund, net of all fees (Australian financial year, 1 July – 30 June)
| Performance | FY2023 | FY2024 | FY2025 | FY2026 | FY2027 YTD |
|---|---|---|---|---|---|
| 5AM Capital Global Return | +17.6% | +15.5% | +23.8% | (26.4%) | +6.9% * |
Returns shown by Australian financial year (1 July – 30 June). * FY2027 year-to-date as at 24 August 2026 and includes an estimated, unaudited August month-to-date figure; subject to change.
Portfolio companies continue to report growing revenues, expanding margins, and strong customer retention.
Our disciplined approach to identifying monopolistic businesses with durable moats remains unchanged.
We are personally invested alongside clients and have added to our holdings during this period.
We continue to prioritize compounding capital over 5–10 years rather than quarterly performance.
Sharp de-ratings in high-quality businesses have historically created attractive long-term entry points. Each time, fundamentals remained intact while sentiment temporarily deteriorated.
| Period & Narrative | Example Business | Drawdown | Subsequent Outcome |
|---|---|---|---|
| 1999–2000: Dot-com mania | Microsoft | ~50% | Compounded >15% p.a. over following 20 years |
| 2007–2009: GFC | Visa | ~45% | Returned >800% in the decade following |
| 2015–2016: UK housing downturn | Rightmove | ~30% | Doubled within 3 years as UK housing normalised |
| 2022: Rate shock | Intuit | ~45% | Recovered fully and hit new highs by mid-2024 |
| Period | Unit Price | Quarter |
|---|
Past performance is not indicative of future results. Returns are net of all fees including management fees and performance fees. This information is for illustrative purposes only and does not constitute financial advice. The 5AM Capital Global Equity Fund is only available to wholesale investors.
Finalist – Best Fund Manager (Equities)
Australian Wealth Management Awards 2025
