Dear Partners,
I hope you and your families had a great end to the year.
In the fourth quarter, our partnership returned (4.2%), bringing full-year 2025 performance to 34.0%. Over the same period, the S&P 500 Total Return Index gained 2.7% in the quarter and finished the year up 17.9%. While we monitor benchmark comparisons, periods of variability from those benchmarks are to be anticipated when pursuing differentiated long-term, risk-adjusted returns.
We're pleased with the 2025 result, and more importantly, we're pleased with how it was earned: our portfolio companies executed extremely well, and the market began to recognize that progress.
What we did in Q4
Q4 was mostly about keeping the portfolio in good shape after substantial price increases in some shares. We trimmed Inter & Co., Mader Group, and Puuilo. All three businesses continue to execute well. The trims were simply about not letting a few winners become too large in the portfolio. We also realized tax losses in Goodfood Market, with the intention to repurchase shares in early 2026.
Top contributors in 2025
Most of our contributors this year were long-term holdings. We've had the time to see how these businesses behave under stress, operationally, culturally, and financially. That familiarity helps us stay patient when it matters, and it also lets management focus on improving the business without feeling pressured to manage for the next quarter.
ASA International
delivered what we want from a lender: growth with discipline. The company improved profitability meaningfully, reporting H1 2025 net profit of $26.8m vs $13.5m in H1 2024, while keeping credit quality tight with PAR>30 at 2.0%.
Mader Group
was a standout example of operational execution translating into shareholder returns. In its FY25 reporting, Mader posted record revenue of A$872.2m (+13%) and EBITDA of A$109.5m (+10%), while continuing to scale a model built around uptime and responsiveness for customers where downtime is expensive.
Inter & Co
reported R$336m in net income (+39% YoY) and expanded ROE to 14.2%. Beneath the headline numbers, the platform effect is becoming visible: Inter added 1.2 million new active clients in the quarter (reaching ~24m active clients), reinforcing engagement and cross-sell that should keep pushing profitability higher as the ecosystem matures.
Top detractors in 2025
On the detractor side, two businesses were in the middle of a transition, so we expected a few bumps along the way. The market is taking longer to get comfortable with the changes underway, but we've spent meaningful time with both management teams and are confident about the actions now in motion as we head into 2026.
Ashtead Technology Holdings
reported strong profitability (HY25 adjusted EBITA margin of 27.3%) and revenue growth (£99.1m, +23.2%), but revenues came in below expectations due to market disruption, geopolitics, and FX headwinds.
Goodfood Market
improved some underlying metrics, but revenue continued to decline. In FY2025 it reported net sales of $121m and adjusted EBITDA of $6m, alongside a net loss. We also supported a leadership transition that we feel good about heading into 2026.
A quick note on what we own
As shareholders, we own a portfolio of operating businesses with unique business models that can grow profitably. They are also public, which means regulated reporting, governance standards, established track records, and daily liquidity.
One of our priorities in 2026 is to accelerate the deployment of Phoenician Intelligence™, our AI proprietary research platform, and use it to move faster from idea to due diligence without lowering our standards. Over the last quarter, we enhanced the platform with screening tools that expand coverage with comparative work, so we can spend more of our time on what matters most: business quality, competitive dynamics, management incentives, and valuation. Importantly, Phoenician Intelligence™ supports judgment; it doesn't replace it.
In 2026, we expect this to help us generate new investments faster, reducing reliance on any single holding while preserving the upside that comes from disciplined, valuation-aware investing.
Strategy
Although our strategy does not exclude large-cap investments by design, we currently find a more compelling balance of valuation and growth prospects outside of the most crowded areas of the market. Our focus remains on owning durable businesses with capable management teams and resilient balance sheets, purchased at prices that offer a margin of safety. We believe this approach provides a differentiated and sustainable source of long-term global returns.
Looking into 2026
We're entering 2026 with momentum: a portfolio of businesses we like, a pipeline we're excited about, and improved tools that help us cover more ground without compromising standards.
Our approach remains the same:
- own high-quality businesses,
- pay sensible prices, and
- keep our interests aligned with yours.
As always, thank you for your continued trust. If you ever want to talk through anything we own or anything we sold, I'm easy to reach.
Cordially,
John G. Khabbaz