Tycho CapeView European Long Short Fund

Overview

Tycho CapeView European Long Short Fund seeks to deliver consistent, risk-adjusted returns by taking long and short positions in European equities. The fund combines fundamental, bottom-up stock selection with disciplined portfolio construction and active risk management to generate positive alpha, while maintaining low net market exposure.

Strategy & Manager

Performance

Commentary

Investment Manager’s Commentary – August 2026

The Tycho CapeView European Long Short Fund returned +0.24% (Class F USD, net) in August with gains driven primarily by the long side of the book. Kingspan was the top contributor as they reported robust results, beating earnings expectations for H1 and upgrading full year guidance. This was driven mainly by servicing the build out of data centres where it supplies cooling equipment and insulation for the building envelope. On top of the better performance from the data centre part, the rest of the group has shown green shoots of recovery in most of its geographies, most notably Continental Europe. Later in the month the company announced a bolt on deal in data centres which should add further to the positive earnings momentum. We expect this positive earnings momentum to continue as the pace of data centre build out accelerates.
 
In thinking about the outlook for the rest of the year, markets have many complicated dynamics to digest. Bond yields gradually continue to grind higher; central bankers continue to send mixed signals on the short term path of rates; geopolitical dynamics continues to be complicated; the AI boom continues to polarise opinions. We have also seen intervention in the currency markets and in the US bond markets by the US treasury, suggesting that higher yields are something that the US government wishes to avoid. This is unsurprising although somewhat reassuring at least in the short term that a) the market has digested all of this without material weakness and b) the US treasury is now stepping into the Fed’s ‘market risk’ police shoes. This doesn’t mean, however, that the treasury will have enough bullets if a more severe test emerges in the future. With the quantum of debt issuance in private and public markets, as well as at the sovereign level, we can see how this problem might more severely test policy makers in the future.
 
Our focus of course remains on companies and what dynamics they are seeing. There has been very little change in this respect over the past 6 months and yet share price multiples have moved both up and down quite significantly during that period. We believe that ultimately earnings delivery between now and year end will reassert their influence over share prices in the coming months as ultimately that will either reassure (or not) that the AI boom has legs and/or that the perceived AI winners and losers are indeed so. This makes for an interesting environment especially now that so much rotation has taken place. Equally there are plenty of ideas outside of this realm of debate to examine. We will be very busy in September meeting companies and adding risk accordingly, both to existing and new positions. We expect the gross exposure to go back to the pre-summer levels, with the net exposure dependent on the bottom up.  

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