2024 August CAD

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2.36% MTD
5.17% YTD

Caravel Capital August 2024 Partner Letter  

Dear Partners, 

For the month of August, Caravel returned 2.36% compared to 1.82% for the benchmark (2.43% for the S&P 500 & 1.22% for the SPTSX).1 This brings year to date total net return to 5.17% for the fund and 16.66% for the benchmark, respectively. 

August was a turbulent month for risk assets, with major stock indices suffering drawdowns of 5-10% in the first week before broadly shaking off the nerves and finishing the month mostly higher. Our perpetual hedge book and fixed-income securities helped dampen the intra-month volatility such that we were able to add to some core positions that came for sale early in the month before participating in the broader rebound. Gross performance attribution was balanced again in August, with non-resource long/short (+140bps), event-driven (+45bps), oil & gas (+65bps), precious metals (+150bps), and fixed income (+25bps) all contributing positively to returns. Our uranium basket (-100bps) and hedges (-20bps) were drags in August. We remain constructive on the uranium thematic despite stalled momentum in the trade at present, with spot prices coming off the boil after peaking north of $100/pound earlier this year. Despite the pullback, market fundamentals remain incredibly attractive for producers and developers exposed to this commodity. 

One standout in August on the positive side was Osisko Mining (OSK). OSK owns a 50% stake in the Windfall gold property in central Quebec. In August, it was announced that OSK would be purchased at a ~67% premium by its JV partner (Goldfields; GFI) in a friendly all-cash deal. Caravel had a ~3% weight in OSK as part of our precious metals portfolio, and sold our shares after the deal was announced for a win of about 200bps in the month. While we don’t buy things on the premise that they will get taken out in the future, we can’t say we were surprised by this outcome. There is a scarcity of large-scale mining assets that are 1) in top tier jurisdictions, 2) are advanced to the point of permitting/development, and 3) exhibit robust project economics in a wide range of possible future commodity price environments. I dare say we own similar names and might be writing similar notes in the future.  

We hope everyone had a great summer. We remain busy with our ongoing campaign of capital raising for the fund. If you know anyone who you think might be a good fit, we’d love to hear from you. 

If you have any questions about our fund, strategies, or just want to catch up, we are available via phone or email to our partners at any time. 

We thank you for your continued support, 

Jack and Glen 

Managing Partners, Caravel Capital 

Monthly Performance (net of all fees)

JanFebMarAprMayJunJulAugSepOctNovDec YTD
20241.74-1.70-1.260.930.240.262.572.365.17%
2023-3.42-.95-0.11-0.07-3.192.221.57-0.222.06-0.762.211.180.32%
20221.151.02.93.10-1.61.82-1.61-0.33-8.490.06-.090.68-7.5%
20213.403.993.751.271.301.540.221.514.893.700.501.2030.78%
20200.41-.20-1.91.741.662.251.263.131.100.572.043.1515.02%
20191.721.793.131.151.35-0.75-1.54-1.340.04-1.45-2.571.392.76%
20186.364.810.950.71-0.85-1.072.501.693.530.670.02-0.1820.58%
20170.270.050.350.251.391.451.770.123.273.6113.961.9631.51%
20161.593.301.53-0.825.67%

Risk vs. Return Comparisons Across Indexes

Month Return YTD Return Volatility Sharpe Sortino Beta Best Month Worst Month Annualized
Caravel2.36%5.17%8.3%1.041.451.0013.96%-8.49%12.3%
S&P 5002.4258%19.52%16.13%0.791.190.0912.82%-12.35%14.68%
S&P/TSX1.2158%13.65%13.43%0.40.470.0910.79%-17.38%9.36%

Growth of $1000 since inception

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