Letter to our co-investors 4Q22

Dear co-investor,

The fourth quarter of the year was a relief for most markets, reducing part of the significant losses accumulated over the previous nine months. Our portfolios were not immune to this positive change. Horos Value Internacional fund gained 13.7% in the last three months of the year, bringing the 2022 return to 4.9%, compared to a 0.8% gain of its benchmark in the quarter and a decline of -13.0% over the calendar year. Horos Value Iberia, on the other hand, was up 12.1% over the quarter, for a return of -5.2% in 2022, compared to a gain of 11.9% in its benchmark over the quarter and a rise of 2.0% for the year.

As usual, I would like to take this opportunity to update our longer-term performance. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 26.5%, below the 39.6% gain of its benchmark, while Horos Value Iberia has returned 4.5%, outperforming the 2.4% return of its index. Moreover, since 2012, the returns of this management team stand at 209% for the international strategy and 162% for the Iberian strategy, compared to 188% and 72% of their benchmark indices, respectively.

Despite the last quarter’s bounce, many indices closed the year with sharp declines. Although many causes may be behind this setback, we are convinced that the tightening of central banks’ monetary policies played a key role. In this letter, I would like to highlight the role that interest rates have played in the evolution of the markets, before and after their major shift to the upside. I will also update on the positive outlook of our portfolios.