Blood Oath Capital Quarterly Insights - Q3 2023

We trust this letter finds you well and thriving. As we delve into the details of the third quarter of 2023, we aim to provide you with insights, the prevailing macroeconomic landscape, and some thoughts into some of our investments: Kimball Royalty Partners (KRP), V2X Inc, and Equinox Gold.

Macroeconomic Context:

Geopolitical Landscape: The geopolitical landscape in Q3 unfolded against a backdrop of heightened global tensions and significant political developments. Emerging market dynamics and geopolitical shifts have introduced an additional layer of complexity to investment decisions. Our commitment to your investments includes a continuous monitoring of these geopolitical factors and their potential repercussions on global financial markets.

Monetary Policy and Interest Rates: Central banks across the globe have signaled a move towards more restrictive monetary policies, primarily in response to mounting inflationary pressures. The prospect of rising interest rates introduces a set of challenges and opportunities across various asset classes. To navigate this landscape adeptly, we are actively reassessing our portfolio’s sensitivity to these changes. Our focus is on maintaining a well-balanced mix of assets that can not only withstand but potentially benefit from fluctuations in interest rates.

Technology and Innovation: Technological innovation remains a significant driver of global economic growth. From breakthroughs in renewable energy to advancements in artificial intelligence, the pace of change is unprecedented. Our investment strategy includes a keen interest in companies at the forefront of these transformative technologies, ensuring we capture the potential for sustained growth while diligently managing associated risks.

Portfolio Highlights:

Kimball Royalty Partners (KRP): KRP has consistently proven to be a cornerstone in our portfolio strategy. Amidst the dynamic energy sector, KRP’s focused approach on oil and gas royalties provides a stable income stream. The volatility in commodity markets notwithstanding, KRP’s resilient performance, strategic decision-making by the management team, and a well-diversified royalty portfolio continue to position it favorably. We maintain a positive outlook on KRP, given its potential for delivering steady returns in the ever-evolving energy landscape.

V2X Inc: Our investment in V2X Inc underscores our commitment to harnessing innovation for sustained growth. As a growing leader in security infrastructure and defense solutions, V2X is at the forefront of transformative technological developments. The global shift towards national security aligns seamlessly with V2X’s strategic positioning. We continuously monitor the company’s technological advancements and market adoption, ensuring our investment thesis remains robust and aligned with the company’s growth trajectory.

Equinox Gold: In times of economic uncertainties, our investment in Equinox Gold serves as a strategic hedge against market volatility. The historical role of gold as a safe-haven asset positions Equinox Gold for potential gains during periods of economic turbulence. As a well-managed mining company, Equinox Gold’s operations and growth trajectory align with our long-term investment objectives in the precious metals sector.

Outlook and Strategy:

Looking ahead, our outlook remains one of cautious optimism. Recognizing the imperative for adaptability in the face of evolving market conditions, we are unwavering in our commitment to a strategy grounded in fundamental research, rigorous risk management, and the pursuit of attractive risk-adjusted returns. The maintenance of a diversified portfolio allows us to navigate uncertainties while remaining agile enough to capitalize on emerging opportunities.

In conclusion, we extend our sincere gratitude for your continued trust. The challenges presented by the current macroeconomic environment demand a nuanced and strategic approach. We believe our disciplined investment strategy, coupled with thorough research and risk management practices, positions us well for continued success. We highly value your partnership and eagerly anticipate navigating the opportunities and challenges that lie ahead together. This is our oath.