So it's been a while since I last wrote anything - primarily because it's been a busy time reorganising the portfolio. Midway through the summer last year I felt I was offside and wanted to reset the portfolio somewhat and went mostly to cash. I felt 2024 was a 'fallow year' in our public market investments, most themes we had researched and invested heavily into during 2020-2023 had matured and we had exited many, with only small positions remaining in some. I didn't want to chase any new ideas without sufficient research and I didn't see a reasonable risk/reward profile in many existing investments, so I took the opportunity to go to cash and reset somewhat. I have also been busy looking at some private investments and wanted the space and time to consider those appropriately.
Our performance to year end in public markets was broadly flat to up slightly for 2024 giving a total return since inception of c10x across five years. Our private market investments however continued to outperform and have beaten expectations we held at the start of 2024. Given these mostly comprise small illiquid UK private co's it's hard to 'mark to market' but suffice to say each company has grown it's net assets year on year and thrown off a little cash as well.
This reset meant that I missed much of the post Trump run up (or run down depending which sector you're looking at) but I took the sell off in Dec to recommence some positions.
Our public market investments since have been largely refocused using a barbell strategy - with one end being investments in mid-large caps with lots of liquidity that offer limited downside, plus reasonable upside alongside a healthy dividend, paired with some very high risk investments (typically in junior explorers) that could each easily 10x or go to zero. The current weighting is perhaps 75% low risk and 10-15% high risk, with the remainder in cash waiting to be deployed to high risk options when they become available. I would say this is a somewhat defensive strategy going into 2025 as I don't like what the outlook looks like (MSTR trading at 3.5x underlying BTC holdings says we're in silly town again). I've tried to find the high risk investments that still have some downside protection although this isn't always possible. Examples of current holdings in this space include Sitka Gold (perhaps less risky now than in January 2024), Sintana Energy (again perhaps less risky by the day), Awale Resources (somewhat downside protected), Infini Resources (super high risk), Kobrea Exploration (ditto), Electrum Discovery (ditto), Challenger Energy (ditto). I generally deploy 1-3% of the portfolio to these, and let them run, only trimming if the story starts maturing (otherwise it defeats the point of the barbell). There are a couple of other explorers I'm following that may be included at full size if the opportunity arises and a couple of starter positions.
On the other end of the barbell are stalwarts in the CI portfolio like YCA, SFL, GCP, CTM and SVM, and newer entrants like the CAC40, IWM, NKE, and VTY, and of course cash. Each of these is 5-10% of the overall portfolio value. I do trade these around depending on if they spike/sell off or if the thesis to each changes, but aim to limit individual exposure to each to 10% at most.
Outside of public markets, as mentioned we've been active in finding private opportunities to generate cash flow and/or provide upside on any exit event. Whilst we are yet to achieve an exit on any of these they are all generating cash flow and growing net assets at a reasonable rate without requiring too much attention. We are eagerly working on a few ideas focused in natural resources which we hope will get off the ground in H1 2025.
So all in all 2024 was a year to reset and review strategy. I feel like a lot of heavy lifting was done Aug-Dec 24 and the portfolio is now well positioned for a solid 2025 with limited downside and tons of upside. It has also been positioned to hopefully not require too much intervention which allows me to focus on new avenues.
Here's to a good 2025 for everyone reading!
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