Tycho Arete Macro Fund

Overview

Tycho Arete Macro Fund aims to deliver competitive risk-adjusted returns while maintaining a low correlation with all major asset classes. It strives to construct and update macro-analytical frameworks that incorporate the rapidly changing macroeconomic conditions around the world, as well as the significant idiosyncrasies of large global actors such as China and Japan.

Strategy & Manager

Performance

Commentary

Investment Manager’s Commentary – April 2026

April Review

In our March letter, we described the investment landscape as a collision between two opposing supply shocks: a short-term negative shock from energy markets and a long-term positive shock from AI. One month later, the tension between these forces—and which narrative markets choose to prioritize—remains the dominant theme.

April delivered two contrasting stories. Energy, rates, and FX markets issued a clear note of caution. Brent crude held above $100, and the 30-year US Treasury yield tested 5% as the US-Iran standoff dragged on, with diplomatic deadlines repeatedly extended. Even as talks inch toward de-escalation, the prolonged uncertainty has embedded a persistent risk premium in energy prices. This keeps secondary risks— inflation and demand destruction—firmly in play.

Equity markets told a far more bullish tale. The Nasdaq surged over 14% in its strongest monthly gain since 2020, as capital rotated decisively into the AI monetization narrative. The key catalyst was a robust 1Q earnings season: hyperscalers not only reaffirmed but, in several cases, increased their capital expenditure plans. Critically, this occurred against a backdrop of improving monetization clarity. Anthropic’s ARR, for example, reached $30 billion in April— up from roughly $1 billion in January 2025. The market’s verdict was unambiguous: the long-term positive supply shock from AI is not only intact but accelerating rapidly across every layer of the technology stack.

At its core, this divergence reflects the perennial tension between growth investors (concentrated in tech) and value investors (more attuned to energy supply risks and cyclical pressures). Reconciling these narratives is difficult—but that tension also creates opportunity.

Our portfolios posted solid gains in April. Performance was driven by equity holdings with a clear “growthy” AI bias, complemented by a cautious macro overlay. The largest contributors were:

1.AI hardware positions spanning the full supply chain—semiconductors, memory, PCBs, and optical components—across the US, Asia, and China;

2.Chinese financials, particularly insurers and banks, which benefited from stronger 1Q results, stabilizing net interest margins, and tailwinds from household wealth reallocation toward equities.

These equity gains were reinforced by our short exposure in US Treasuries and gold. The month illustrated that these are not contradictory bets, but two coherent expressions of the same nuanced macro environment.

Current Outlook

What stands out in today’s macro landscape is that its two seemingly contradictory forces point to the same destination. Whether viewed through the optimistic lens of AI-driven productivity and infrastructure demand, or the cautious lens of energy disruption and geopolitical fragility, the conclusion is identical: the global economy requires substantially more investment, across more sectors and geographies, than the capital allocation patterns of the past decade can support.

The AI story is gaining clarity and momentum. The rise of AI agents—systems capable of handling complex, multi-step workflows with increasing autonomy—dramatically expands the addressable market for compute and inference. Equally important is the emergence of tokenized, metered usage models. These innovations help resolve the long-standing capex-versus-ROI debate by converting upstream infrastructure spend into visible, recurring cash flows. The result is sharper demand visibility across the supply chain, extending planning horizons and intensifying capacity constraints in semiconductors, high-bandwidth memory, advanced substrates, optical interconnects, and power infrastructure.

Energy markets are on a parallel but distinct path. Renewables are transitioning from policy preference to critical factor of production. Their importance is reinforced from two directions: as the essential power source for AI data centers and as a strategic hedge against the geopolitical fragility of hydrocarbon supply chains. The Middle East conflict has made this risk tangible. In response, major economies are accelerating deployment of renewables across generation, storage, and transmission. The investment thesis has shifted from pure economics to energy security—with security concerns now reinforcing the underlying economics.
Though these forces differ in their near-term market signals— buoyant equities versus elevated commodities and rates— they converge structurally in three key ways:

1. Structurally higher cost of capital. Simultaneous demand surges from AI infrastructure, renewable build-out, defence spending, and supply chain reconfiguration are colliding with constrained savings. Long-duration yields reflect this reality. We view 30-year US Treasury yields above 5% as closer to a new equilibrium than a temporary spike. In this environment, gold faces gradual pressure as central banks and investors rotate from passive reserves toward higher-returning productive assets. In a capital-scarce world, the least productive stores of value become natural sellers.

2. HALO assets (Hard Assets, Low Obsolescence) are positioned for structural outperformance. In AI, this includes leading-edge semiconductors, high-bandwidth memory, advanced substrates, optical interconnects, and supporting power/data center infrastructure. In energy transition, it covers utility-scale solar/wind, grid storage, high-voltage transmission, and critical materials. Asia and China possess deep competitive advantages across both supply chains through manufacturing scale, materials access, and policy support.

3. China’s “stability premium” is becoming more visible and investable. Energy shocks that pressure dollar-based importers leave RMB-settled renewable supply chains relatively insulated. China’s manufacturing base has demonstrated resilience, supported by domestic energy advantages and vertical integration. Notably, the RMB has strengthened amid oil price volatility, behaving more like a safe haven. As global procurement diversification accelerates, China’s role as a stable, competitive supplier is increasingly reflected in asset prices.

These convictions drive four core positions:

1. Short long-end US Treasuries — reflecting structurally higher real yields amid sustained investment demand

2. Short gold — as capital rotates toward productive assets in a rationed environment

3. Long HALO assets across AI and renewable supply chains in the US, Asia, and China, where earnings visibility and capacity constraints are improving

4. Long RMB and Chinese A-shares — capturing the re-rating driven by China’s stability premium

We believe this framework positions portfolios to navigate— and capitalize on—the multi-year investment supercycle unfolding at the intersection of technology and energy.

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