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 – May 2026

The Tycho CapeView European Long Short Fund returned +0.8% (Class F USD, NET) in May as markets continued to rebound from their March sell off.
 
The fund had some good idiosyncratic wins on both sides of the book. On the long side, there were three winners of note. Firstly, IG Group, the UK based online trading provider, which upgraded both current year and mid term organic growth expectations in the 1Q trading statement. Secondly, Schaeffler which continues to gain increased investor attention through its exposure to structural growth themes including humanoid robotics, defence, and space. And thirdly Umicore which raised its 2026 group EBITDA guidance, driven by a strong first quarter in the recycling and specialty materials business. On the short side, a position in a large re-insurance company generated a positive return as the re-insurance cycle, which started turning down last year, has accelerated lower.
 
Detractors included our long position in CRH Plc, the building materials company, as it became apparent that the successor to the IIJA (Infrastructure Investment and Jobs Act) bill will be less generous than expected. We expect that the final amount to be spent on roads and bridges will go up before the bill goes to President Trump for authorization, but we thought it was prudent to exit the investment for now. A short in a Nordic design software company also detracted as it traded higher after a long period of decline. However, we maintained our position as we continue to believe the business is structurally threatened, is ex-growth and that some accounting metrics, such as annual recurring revenues, have been inflated.
 
The rally continues to be narrowly focused around AI themes, leaving the rest of the market behind. Like last year, we are seeing a number of companies that have de-rated without being AI exposed per se that continue to prosper. There is effectively geopolitical discount in the price of such shares which appears unwarranted in our view and which we expect to unwind over the balance of the year, thus providing an opportunity for us. We largely exited, on a tactical basis, our mining and steel longs which have performed well and no doubt have seen some tangential benefit from perceived AI build exposure. We increased exposure to banks and added to a few high conviction longs which have lagged the market despite delivering earning upgrades and thus implicitly derated meaningfully. Gross exposure is largely unchanged but is expected to trend up from here, with net expected to stay at similar levels as we continue to find compelling shorts also.

Documents