Letter to our co-investors 2Q23

Dear co-investor,

These are good times for Horos because, at this moment, almost all of our more than 3,000 clients have positive returns with their investments in our funds and pension plan. A milestone that shows that our investment process continues to bear fruit, as is also reflected in the 236% and 185% total returns that this management team has delivered since 2012, or in annualized terms, 11.5% in the international strategy and 10.2% in the Iberian strategy, outperforming their benchmark indexes in both cases. However, our satisfaction is even greater given that the upside potential of our portfolios remain at historically very high levels. In other words, if our analysis has been correct, the returns we can expect as investors in our vehicles in the coming years will also be very attractive.

The year 2023 is being characterized by a generalized rise in global equity markets. In this favorable environment, our funds have also performed well, up 8.5% in the case of Horos Value Internacional (versus 11.5% of its benchmark index) and 8.9% for Horos Value Iberia (versus 15.8%) in the first six months of the year. However, these gains in 2023 are particularly strong for the NASDAQ-100 technology index, with a return of around 45% and, more worryingly, driven by a very significant multiple expansion. We believe that these higher valuations are being caused, to a large extent, by the expectations that the investment community has placed on the future deployment of artificial intelligence. We will therefore devote this letter to explaining what is happening and what risks we see ahead for the sector and this market